China's automaker BYD returned to growth in the third quarter on a surge in overseas sales. But weak demand in China's domestic market, rising inventory and shrinking cash-like assets are adding to the burden of an export-led growth strategy.

Electrek reported on Oct. 29 that BYD's third-quarter revenue rose 13.6 percent from a year earlier to 221.49 billion yuan, ending four straight quarters of declining revenue. Net profit attributable to controlling shareholders rose 28.1 percent to 10.02 billion yuan. The figure missed market expectations of 11.4 billion to 12.95 billion yuan.

Exports drove the improvement. Global sales in the third quarter rose 18.7 percent to 1,323,065 vehicles, and export volume surged 137 percent to 550,704 vehicles. About 42 percent of total sales came from exports. Sales focused on China's domestic market fell about 12 percent to roughly 770,000 vehicles.

On a year-to-date basis, the recovery was limited. Revenue for January to September was 566.3 billion yuan, virtually flat, while net profit fell 4.2 percent to 22.34 billion yuan. Over the same period, financial costs reached 7.37 billion yuan due to foreign exchange losses, and research and development spending fell 17 percent.

The expansion of overseas operations was also reflected in the balance sheet. Inventory stood at 221.58 billion yuan at end-September, up 60 percent from end-2025, and accounts receivable rose 53 percent. Cash and short-term financial assets fell 45 percent to 71.72 billion yuan. BYD explained that inventory and receivables rose as it expanded its overseas auto business.

Notes payable surged 251 percent to 78.86 billion yuan, indicating a change in how it settles payments to suppliers. Contract liabilities, which reflect customer prepayments, rose 81 percent to 92.95 billion yuan. Cash used for plants and equipment fell 24 percent to 87.38 billion yuan.

Operating cash flow for January to September rose 33 percent to 54.47 billion yuan, providing another positive signal. With price competition in China intensifying, whether expanding exports translates into actual cash collection and stable profit has emerged as a key factor for future results.