Well, Well, Well - BYD Co. Proves Mortal After All (And Why Crypto Doesn’t Have This Problem)

BYD's stumble reveals the fragility of traditional manufacturing empires—meanwhile, decentralized networks keep humming.

When Titans Falter

Even automotive giants face operational realities that blockchain protocols simply don't. No smart contract ever missed a production quota.

The Infrastructure Gap

Traditional companies require physical infrastructure, supply chains, and human capital—all vulnerability points. Decentralized systems? They run on code and consensus.

Finance's Favorite Irony

Wall Street still bets billions on factories that can break down while dismissing unstoppable digital infrastructure that runs 24/7/365. Typical.

Maybe it's time to question which assets are truly 'mortal'—and which are built to outlast us all.

What have you done for me lately?

BYD's total deliveries totaled 373,626 during August, essentially flat growth from one year ago. That makes two straight months that the Chinese EV maker's sales have stagnated due to intensifying competition from a slew of aggressive Chinese automakers. The domestic market is so intensely competitive that China has enormous overproduction capacity and a brutal price war that's eroding margins across the industry.

Here's another way to look at how brutal the domestic competition is. BYD's overseas sales spiked 146% year over year to 80,464 vehicles during August. Meanwhile, its deliveries in China declined for the fourth straight month.

If you thought that was the bad news, there's a little bit more. Not only is BYD stagnating in China at the moment, but one of its primary competitors is thriving.(GELYY 2.23%) saw its global deliveries in August jump 38% to a monthly high of 250,167 vehicles. That total was driven by an extremely strong performance in China, where the numbers increased 58% to 214,090 during August, while its overseas deliveries dropped 22% to 36,077 -- basically the opposite of BYD last month.

The silver lining

Despite its current struggles in a difficult domestic market, the silver lining is that the globe is BYD's future; it's thriving internationally. But how does it accomplish this, and will it continue?

BYD's international footprint revolves around three Core concepts: controlling its supply chain, localizing production, and adapting brands to different international markets. What separates BYD from the competition is that it doesn't just produce its vehicles, it makes almost all the parts in-house. It designs and manufactures batteries, semiconductors, and more; you name it and it's likely covered in the company's impressive vertical integration. That gives BYD an edge in speed, production, and cost, and it's part of why the company is what it is today.

Image source: BYD Co.

To successfully expand and dominate overseas, BYD can't simply build vehicles in China and export -- at least not entirely. In order to thoroughly attempt an invasion of overseas markets, the company needs to build where it sells. Over the past two years alone, BYD has announced factories in countries including Thailand, Brazil, and Turkey, with more to follow. The strategy will help reduce tariff pain and shipping costs, as well as improve intangibles such as goodwill with local governments.

BYD also makes sure it covers all important segments of any market using a multibrand strategy, which is common within the automotive industry. It offers aggressive pricing via its main flagship brand, then offers its Denza brand for premium segments and Yangwang for ultra performance and luxury (thinkfor the latter).

What it all means

Sure, BYD's recent data shows that it's mortal after all -- but also brings to light just how demanding and competitive China's market is. The silver lining is that BYD's growth is going to come internationally, and it's thriving overseas right now. And thanks to its competitive advantages, the company is likely to continue succeeding abroad while the Chinese market works through overcapacity and becomes healthier over time.

BYD is a juggernaut -- don't expect that to change. It should remain on your watch list to investigate further and perhaps start a small position.