Boost for BYD: The Chinese automaker, a global leader in the electric (including plug-in hybrid) market, tripled its net profit in the first half, boosted by strong demand for clean vehicles in China.
Number one manufacturer in China
The Asian country, the world’s largest producer of greenhouse gases in absolute terms, targets car sales in 2035, made up mainly of electric and hybrid vehicles.
Generous purchase subsidies have allowed sales to take off in recent years, while many innovative local manufacturers have emerged to support this transition to the world’s largest automotive market.
This context was more than favorable for BYD, which dominates sales of so-called “clean” vehicles in China, ahead of Tesla.
Net profit tripled
The group posted net profit in the first half of 10.95 billion yuan (1.39 billion euros), a year-on-year increase of 204.6%, it said in a statement.
This result is in line with the estimates made in July by BYD (between 10.5 and 11.7 billion yuan).
Its semi-annual turnover has also increased considerably in one year (+72.7%), up to 260.1 billion yuan (33.06 billion euros).
“Brand power”, economies of scale and “fewer raw materials” are behind the strong performance, according to BYD (an acronym for “Build Your Dreams”).
“Serious Competitors”
Initially specialized in the design and manufacture of batteries, the company diversified into the automotive sector from 2003.
Many foreign manufacturers (Tesla, BMW, Mercedes, Audi, Toyota, Ford…) now depend on BYD for their batteries.
The group also became the first global manufacturer this month to cross the symbolic barrier of 5 million electric vehicles produced in its history.
Shenzhen-based BYD stopped producing gasoline cars last year and now focuses solely on hybrid and electric models.
Many local brands (SAIC-GM-Wuling, Geely, XPeng, Nio, etc.) compete in this niche in China with Tesla and other foreign manufacturers in a very competitive market.
“In the first half of the year, Chinese manufacturers took advantage of the trend towards electric and intelligent vehicles […] and consolidate themselves as serious competitors”, greeted BYD.
price war
Its competitor XPeng, very prominent in this niche, announced on Monday the acquisition for about 700 million euros of the electric subsidiary of the “Chinese Uber”, Didi, and the joint launch of a new brand of vehicles.
Sales of hybrid and electric models have nearly doubled in China by 2022 to account for more than a quarter of vehicles sold, according to the China Federation of Individual Automobile Manufacturers (CPCA).
To keep pace, automakers have been waging a price war in recent months as the Chinese rein in consumer spending amid an economic slowdown.
BYD in July remained the largest seller of electric vehicles in China with some 262,000 units sold, according to the company.
By comparison, Tesla, its main competitor, sold about 64,000 during this period, according to the CPCA.
BYD, which markets its vehicles in around fifty countries, is present in Europe and is now looking at France. After models with a fairly high-end positioning, the brand has just launched a small electric compact starting at 29,000 euros, the Dolphin.
French Economy Minister Bruno Le Maire met the BYD boss in China last month to convince him to choose France for his future European factory.
Source: BFM TV
