China’s top EV maker, BYD, saw profits surge 145% in the second quarter, aided by record deliveries. The staggering growth comes amid China’s EV price war that’s limiting margin growth in the region.
After passing Volkswagen as China’s bestselling car brand earlier this year, BYD maintained its lead through the first half of the year.
In the second quarter, BYD delivered a record 703,00 new energy vehicles (EV and PHEV), up 98% from last year. The growth helped push the automaker’s revenue up 67% to over 156 billion yuan ($21.4 billion).
Meanwhile, BYD watched its profits surge, more than doubling in Q2 to 6.8 billion yuan ($933 million). It was enough for BYD’s second-highest quarterly profit following the fourth quarter of 2022 with 7.3 billion yuan ($1 billion).
Net income for the first half of the year climbed 204.7% as BYD extended its lead in China’s EV market. The company hit a new monthly sales record in July (for the third straight month), aided by growth in its Dynasty and Ocean brands, up 54% YOY.
BYD profit surge despite China’s EV price war
The profit growth comes amid a fierce EV price war in China led by Tesla’s price cuts earlier this year that are eating into other EV maker’s margins.
According to Reuters calculations, BYD has launched new editions for eight bestselling models at 4% to 25% lower prices than the previous versions. Despite this, the automaker’s second-quarter margins were still 18.7%.
Jack Shea, chief financial officer at Snow Bull Capital, commented on the automaker’s success (via Automotive News Europe), saying:
Since BYD has offerings across almost all segments and price-points, BYD as a whole has been net-impervious to price cuts.
Citigroup’s Jeff Chung said BYD’s performance was “exceptional” despite the ongoing pricing pressure in China.
BYD is known for its cheaper electric cars, typically priced below 200,000 yuan (or around 30%) below premium competitors like Tesla and NIO. For example, BYD released its most affordable EV in Europe, the Dolphin, starting at 30,000 euros ($33,000) earlier this year.
Meanwhile, the auto giant launched two new luxury brands, Yangwang and Fang Cheng Bao, which will be priced at around 1.1 million yuan ($150,000).
Electrek’s Take
While BYD continues gobbling up market share, rivals like NIO and XPeng are seemingly looking to counter.
A new NIO model from its new “Alps” mass market EV brand was spotted last week, designed as a competitor to Toyota, VW, and BYD. Meanwhile, XPeng revealed Monday that it was buying Didi’s smart EV assets to launch its mass-market EV brand next year, with a starting price of around 150,000 RMB ($20,500).
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