BYD’s Ultimate Challenge: It Needs a Corolla of Its Own

With its leading technology portfolio and economies of scale in the global new-energy vehicle market, BYD is working hard to catch up with Toyota. Having established itself as China’s sales leader, BYD is now turning its attention to Europe—a critical market for enhancing its brand value and testing its ability to operate and manufacture locally.

At the 2026 Paris Motor Show, BYD Executive Vice President Stella Li announced plans to expand the company’s European workforce to more than 40,000 by 2030, marking a gradual shift from exporting finished vehicles to becoming a local manufacturer in Europe. BYD currently employs nearly 10,000 people in the region. Its first European passenger-vehicle plant, in Hungary, is scheduled to begin production in the fourth quarter of 2026, with an initial planned annual capacity of 150,000 vehicles.

Toyota, the world’s largest automaker by sales and Europe’s second-largest passenger-car manufacturer, employs more than 20,000 people across Europe and operates eight manufacturing plants in six countries, including the UK, France and Turkey. In 2025, Toyota sold 1.229 million vehicles in Europe, including Lexus. Its annual sales in the region have remained above the one-million mark since 2017. Three core model lines—the Yaris, Corolla and C-HR—account for nearly 60% of its total sales. The Yaris family alone led the lineup with 367,400 units.

Whether measured by its formidable profitability or its balanced global presence across North America, Europe and Japan, Toyota has become the ultimate benchmark for automakers worldwide. Yet companies such as Hyundai-Kia, General Motors and Stellantis have little prospect of becoming another Toyota. More importantly, they do not necessarily need to. Their goal is simply to establish strong positions in the markets and segments where they have a competitive advantage.

Volkswagen, the world’s second-largest automaker, is struggling with its electric-vehicle transition and facing a serious test in China, its largest market by sales. Perhaps the only automaker with the capabilities to mount a sustained challenge to Toyota on a global scale is BYD, which possesses one of the industry’s strongest combinations of new-energy vehicle technology, supply-chain capabilities and sales volume.

For BYD, however, winning the future may require more than becoming a larger company. It must learn from Toyota’s global model-building strategy—and ultimately find a way to surpass it.

Toyota maintains its position at the top of the global automotive market with annual sales exceeding 10 million vehicles. Behind that scale are two global bestsellers, the RAV4 and Corolla. The RAV4 alone sold 1.28 million units worldwide in 2025, retaining its position as the world’s best-selling vehicle.

BYD Leads China in Sales, but Its Model-Level Dominance Is Under Pressure

BYD set a new monthly sales record in September, delivering 463,500 vehicles. Its cumulative sales for the year reached 3.1315 million, keeping it firmly in first place in China’s automotive market. Yet its position is facing a more complicated test when measured by individual-model performance and profitability.

BYD still has an extensive product portfolio, but in China’s increasingly competitive market, some of its traditional bestsellers are losing their edge. More segment-leading positions are being taken by Geely, Tesla and other competitors.

From January through September 2026, the best-selling models in China’s sedan, SUV and MPV categories were the Geely E2/EX2, Tesla Model Y（参数丨图片） and GAC Toyota Sienna, respectively.

In the overall model rankings, BYD’s Fangchengbao Ti 7 placed third with 165,700 units, while the Yuan UP ranked sixth with 148,600. By contrast, the Han and Tang, two of BYD’s established premium nameplates, sold just 26,200 and 14,400 units, respectively. The more ambitious Han L and Tang L recorded only 4,987 and 4,487 units, with reports suggesting that production may already have been discontinued.

The market performance of several of BYD’s best-known models, including the Seagull, Song and Denza D9, has also been less impressive than expected, while its premium models have shown pronounced weakness.

The next-generation Seagull, the Datang and the Dahan will be crucial to BYD’s efforts to achieve a breakthrough in 2027. The Datang sold more than 10,000 units in September, while the Dahan has officially gone on sale.

As traditional automakers such as Geely and Chery accelerate their electrification strategies, and newer players such as Leapmotor and Xiaomi continue to increase sales, BYD can no longer rely on its overall volume leadership alone. It needs at least one indisputable blockbuster in a key market segment. Without that, its sales lead will become harder to defend over the long term, and the strength of its competitive position will face greater scrutiny.

To exceed its full-year 2025 sales of approximately 4.6 million vehicles, BYD would need to sell around 1.47 million vehicles in the fourth quarter of 2026—nearly 490,000 per month. That would require the company to keep setting new records.

The ramp-up of production capacity for its second-generation Blade Battery, combined with further overseas expansion, gives BYD the technology and resources to continue pushing toward new milestones.

Thanks to its in-house development of battery, electric-motor and semiconductor technologies, BYD has global expansion advantages that many other Chinese automakers lack. Overseas markets are becoming an increasingly important source of both sales and profits—and are central to BYD’s future.

According to BYD’s financial results, the company’s overall profitability came under pressure in the first half of 2026 from China’s domestic price war and foreign-exchange losses.

Group revenue totaled RMB 344.815 billion, down 7.13% year on year. Net profit excluding non-recurring items fell 9.02% to RMB 12.373 billion, while foreign-exchange losses reached RMB 4.7 billion. The overall net profit margin was 3.58%.

Overseas revenue, however, reached RMB 181.268 billion, up 33.92% year on year and accounting for 52.57% of total group revenue. For the first time, overseas business contributed more than half of BYD’s revenue, underscoring its growing importance to the company’s operating model.

BYD Has a Global Sales Base, but Does It Have a Global Icon?

BYD has already achieved substantial global sales volume. Compared with Toyota, however, it still has ground to make up in market coverage, product lifecycle management and global brand recognition.

More importantly, BYD has a broad product portfolio but has yet to establish a globally recognized flagship model with the same level of awareness as the Corolla or RAV4.

Toyota’s success with the Corolla comes from more than a single body style. Across sedans, SUVs, hatchbacks and station wagons, the Corolla nameplate has evolved into a global family of vehicles. It has become both one of the world’s best-selling model lines and a household name.

As FAW Toyota and GAC Toyota move toward closer coordination in sales, distribution and product planning, the scale advantages of global nameplates such as the Corolla and RAV4 could become even stronger.

In recent years, BYD has expanded its Dynasty lineup by introducing related models under the Ocean Network. It has also continued to add models under the Denza and Fangchengbao brands. Even the Tang nameplate now spans the Tang L and Datang, vehicles with substantially different design approaches and market positioning.

After years of almost unchecked expansion, BYD has reached a new stage in its development. It cannot afford to slow down, given the collective rise of Chinese competitors and the demands of global expansion. But it can no longer rely on its previous growth model unchanged, either.

Overseas Expansion Is Not Just About Selling More Cars

In September 2026, BYD exported 179,800 vehicles, with exports accounting for nearly 39% of its total sales. Export volume rose 153.9% year on year. From January through September, cumulative exports reached 1.3378 million vehicles, trailing Chery’s 1.55 million.

From April 1, 2027, China’s export VAT rebate rate for new-energy vehicles is scheduled to fall from 13% to 9%, creating another test for the overseas profitability of Chinese automakers.

Unlike Chery and Geely, which continue to develop ICE and new-energy vehicles in parallel, BYD has already abandoned conventional ICE vehicles. As a result, its profitability could be particularly exposed to changes in export economics and overseas market conditions.

Chery, meanwhile, has built up considerable experience in exporting ICE vehicles and operating in overseas markets, giving it a distinctive long-term advantage. The Tiggo family, for example, has established a degree of recognition in international markets. Chery is not only a leading Chinese exporter by vehicle volume; the Tiggo has also become one of the most recognizable representatives of Chinese automotive brands abroad.

Models such as the Yuan UP, Seagull and Song Plus are playing important roles in BYD’s overseas expansion. But its international portfolio remains relatively fragmented. The company still needs a global core model capable of sustaining high sales volumes across multiple markets, generating consistent profits and reinforcing brand recognition—much as the RAV4 and Corolla do for Toyota.

At the 2026 Paris Motor Show, BYD announced that it would introduce the Tang L to Europe in the first quarter of 2027, where it will be called the ATTO 8. The model will occupy the highest position in BYD’s European lineup.

BYD Wants to Become Toyota. Other Chinese Automakers Do Not Have To.

The intense competition triggered by China’s collective shift toward new-energy vehicles, combined with substantial untapped demand for EVs in global markets, is pushing Chinese automakers to invest more heavily overseas in pursuit of greater scale and profitability.

BYD’s global strategy is ultimately about becoming a company like Toyota—and then overtaking it. Other Chinese automakers neither need to follow the same path nor necessarily have the ability to do so. Recognizing this distinction will help the broader Chinese auto industry find room for differentiated growth as BYD pursues its ambitious global expansion.

Setting aside North America, where Chinese automakers face significant barriers to market entry, Toyota’s approach offers important lessons for BYD.

The Corolla and RAV4 have become synonymous with Toyota. Chery has its Tiggo family. But what is the model that defines BYD in the eyes of consumers around the world?

That is the question BYD must answer in the next stage of its development. And it is a question that cannot be answered simply by holding the number-one sales position in China.