BYD, China's foremost electric vehicle (EV) producer, has reported a staggering 145% surge in profits during the second quarter, propelled by an impressive volume of deliveries. This remarkable growth comes at a time when an EV price war is sweeping through China, exerting pressure on profit margins across the sector.
Having already overtaken Volkswagen to become China's top-selling car brand earlier this year, BYD has successfully upheld its market leadership throughout the first half of the year.
In the second quarter alone, BYD achieved a record-breaking feat by delivering an astounding 703,000 new energy vehicles (comprising both EVs and plug-in hybrid electric vehicles, or PHEVs). This figure represents a notable 98% increase from the previous year. The surge in deliveries contributed to a substantial 67% uptick in the automaker's revenue, reaching over 156 billion yuan ($21.4 billion).
Simultaneously, BYD witnessed an impressive surge in profits, more than doubling its figures in Q2 to reach 6.8 billion yuan ($933 million). This achievement marks BYD's second-highest quarterly profit, following closely behind the record set in the fourth quarter of 2022, with 7.3 billion yuan ($1 billion).
For the first half of the year, net income soared by an impressive 204.7%, firmly cementing BYD's dominant position in China's burgeoning EV market. The company's unrelenting success was underlined by the establishment of a new monthly sales record in July, marking the third consecutive month of growth. This upward trajectory was fueled in part by the popularity of BYD's Dynasty and Ocean brands, both of which experienced a remarkable 54% year-on-year increase.
This remarkable profit growth occurs in the midst of a fierce EV price war in China, initiated by Tesla's substantial price reductions earlier this year. These reductions have directly impacted the profit margins of other EV manufacturers in the market.
Notably, BYD responded by introducing updated versions of eight of its best-selling models, priced at 4% to 25% lower than their predecessors. Despite these adjustments, the automaker's second-quarter profit margins remained relatively resilient at 18.7%.
Jack Shea, Chief Financial Officer at Snow Bull Capital, highlighted BYD's resilience, stating, “Since BYD has offerings across almost all segments and price-points, BYD as a whole has been net-impervious to price cuts.”
Jeff Chung of Citigroup commended BYD's remarkable performance in the face of ongoing pricing pressure within China's EV landscape, describing it as “exceptional.”
Renowned for producing more affordable electric cars, often priced up to 30% lower than premium competitors such as Tesla and NIO, BYD continues to make its mark. The Dolphin, BYD's most budget-friendly EV offering in Europe, was introduced earlier this year with a starting price of 30,000 euros ($33,000).
In a strategic move, BYD also launched two new luxury brands, Yangwang and Fang Cheng Bao, positioned at an estimated price point of 1.1 million yuan ($150,000).
BYD's formidable growth and unwavering position within the competitive EV sector further solidify its prominence in the global automotive industry.