On October 31, the tech and automotive industries were stunned by BYD Company Limited (002594.SZ), often dubbed the "cash cow," as its Q3 2025 report revealed a sharp decline in performance. Net profit and basic earnings per share (EPS) plummeted by over 36%, while quarterly revenue reached RMB 194.985 billion, down 3.05% year-on-year.
BYD attributed the slump to intensified industry competition, cost pressures, and surging R&D expenditures, alongside a shift from foreign exchange losses to gains. A key factor was the 31.3% YoY rise in R&D spending to RMB 43.748 billion for the first nine months of 2025. This pushed BYD’s cumulative R&D investment since 2024 past RMB 225 billion, averaging RMB 1.6 billion daily—primarily for researcher salaries and material costs.
The automaker’s R&D frenzy now eclipses even Tesla, which spent RMB 33.1 billion in 2024 versus BYD’s RMB 54.2 billion. Since 2011, BYD has sacrificed profits for technology for 15 consecutive years, with R&D ratios hitting 6.63%, far above the A-share average. The payoff? Dominance in global EV sales and technological leadership, "accelerating the worldwide NEV revolution."
**R&D Surge Amid Profit Decline** BYD’s Q3 revenue dipped to RMB 194.985 billion (-3.05% YoY), with net profit down 32.6% to RMB 7.823 billion. EPS fell 36.09% to RMB 0.85. For January–September, revenue grew 12.75% to RMB 566.266 billion, but net profit slid 7.55% to RMB 23.333 billion. R&D expenses soared to RMB 43.748 billion (+31.3% YoY), on track to hit RMB 58.3 billion annually—a new record after 2024’s RMB 54.2 billion (+36% YoY).
BYD’s R&D outlay has exceeded net profit for 13 straight years, dwarfing peers like China Construction and ZTE to become China’s top R&D spender.
**Breakthroughs in Core Technologies** The investment fueled 485 international patent filings (+96.36% YoY), adding to BYD’s 65,000+ global patent applications. With 120,000 R&D staff—the most among automakers—BYD focuses on battery tech, EV platforms, and autonomous driving.
- **Batteries**: The Blade Battery 2.0 achieves 180Wh/kg density and 60% higher volumetric efficiency via structural innovation, prioritizing safety over ternary lithium. - **EV Platforms**: The 1000V mega-flash-charging Super e-Platform enables 12-minute 10–80% charging, while the e-Bus 3.0 (world’s first 1000V architecture) cuts energy use by 18% and extends cold-weather range by 50–80 km. - **Autonomous Driving**: The "Xuanji" advanced driver-assist system debuted in 21 models, enabling hands-free highway driving.
**Market Dominance Through Innovation** BYD’s tech edge propelled sales: 3.26 million units (+19% YoY) from January–September, including 702,000 overseas (+132%). The "Xuanji" system alone powered 1.7 million vehicles, making it China’s top ADAS.
Analysts note BYD’s relentless R&D, integrated supply chain, and financial prudence position it for sustained growth. "We’re committed to leading the EV and smart-car era," said BYD’s board secretary Li Qian, framing the strategy as a "green innovation roadmap."