Elon Musk Reacts as BYD Faces Its Sharpest Sales Collapse in Six Years
The battle for EV supremacy has taken a dramatic turn. After overtaking Tesla as the world’s top electric car seller in 2025, Chinese giant BYD is now facing a brutal reality check. In February 2026, the company reported its steepest monthly sales decline since the 2020 pandemic—a collapse so rapid that even Elon Musk couldn’t help but weigh in on the “mega pain” ahead.
Table of Contents
- The 41% Plunge: BYD’s February Setback
- Elon Musk Weighs In: The “Tough Sledding” Verdict
- Geely Overtakes: A New Leader in China?
- Capacity Crisis: Why Under 50% Is “Mega Pain”
- The Silver Lining: Overseas Growth
The 41% Plunge: BYD’s February Setback
On March 1, 2026, BYD sent shockwaves through the market by reporting a 41.1% year-over-year drop in vehicle sales. The company sold just 190,190 units in February, including both battery electric vehicles (BEVs) and plug-in hybrids (PHEVs).
While the 2026 Lunar New Year holiday (which lasted nine days in February) accounted for some of the slump, the decline represents the sixth consecutive month of contraction. For the first time in years, the “invincible” BYD domestic growth machine appears to be sputtering.
Elon Musk Weighs In: The “Tough Sledding” Verdict
Tesla CEO Elon Musk didn’t miss the opportunity to comment on his rival’s struggle. Responding to a chart on X (formerly Twitter) showing BYD’s rapid sales decline, Musk described the situation as “tough sledding.”
Musk highlighted the brutal economics of the auto industry, noting that factories suffer immensely when production volume drops. He pointed out that while factories run efficiently above 80% capacity, anything below 50% represents a catastrophic financial burden.
Geely Overtakes: A New Leader in China?
The most surprising twist in 2026 is the rise of Geely Automobile. For the second consecutive month, Geely has outsold BYD in the Chinese domestic market.
| Metric (Feb 2026) | BYD | Geely |
| Total Sales | 190,190 | 206,160 |
| Export Growth | +50% | +138% |
| Market Position | 2nd Place | 1st Place |
Geely’s aggressive export strategy and fresh model lineup (including the high-performing Galaxy and Zeekr brands) have allowed it to seize the crown while BYD retools its domestic strategy.
Capacity Crisis: Why Under 50% Is “Mega Pain”
Industry analysts report that BYD is currently operating at below 50% of its total production capacity. As Musk noted, this is where the “mega pain” begins.
When a factory sits idle, fixed costs—such as machinery depreciation, property taxes, and salaried labor—are spread over fewer vehicles. This erodes profit margins, forcing companies into desperate “price wars” or heavy financing schemes to move inventory. To combat this, BYD has introduced a new 7-year low-interest financing plan to entice cautious buyers.
The Silver Lining: Overseas Growth
Despite the domestic “ice age,” BYD’s international expansion remains a bright spot. In February, the company exported over 100,000 units—the fourth month in a row crossing that threshold.
- Europe: Sales surged by 165% compared to last year.
- Brazil: The new local plant is ramping up production for the Latin American market.
- Tech Teaser: Investors remain optimistic due to a “disruptive technology” launch scheduled for March 5, where BYD is expected to unveil Blade Battery 2.0.
“Factories do great above 80% capacity, marginal at 60% and mega pain below 50%.” — Elon Musk on BYD’s production slump.