China’s best-selling EV brand BYD triples net profits in Q3

BYD Co Ltd (Build Your Dreams), China’s best-selling EV brand, has tripled its net profit for the third quarter with a 6.82 billion yuan total (€0,86 billion) or a 144.7% increase. That’s impressive again, thanks to record deliveries but less than the first quarter, where profits fivefolded.

BYD sold 612 425 battery-only EVs in the first half, and 10% were exported worldwide, according to data from the China Association of Automobile Manufacturers. To compare, Tesla sold 889 015 EVs globally in the same period, Reuters writes.

Spectacular growth

Over the first six months of this year, BYD’s profits jumped by 204.7% to 10.95 billion yuan (€1,38 billion). In its home country, BYD already outsold market leader Volkswagen for the first time in Q1 2023. In August, the Chinese car and battery maker unveiled that it had produced its fifth million ‘new energy vehicle’. That is, BEVs and PHEVs combined.

BYD produced its first NEV in 2008, but its exponential growth defies expectations. It took the brand thirteen years to pass the mark of one million NEVs but not more than one year to achieve the second million. The previous goal post, three million units, took BYD half that time.

Healthy operating margin

The record deliveries are one thing, but according to analysts, BYD’s gross margin in the first half of 2023 was even more impressive, being 18%, equalling Tesla’s. Both are under pressure from price competition in the Chinese market, where sales shrank for the second consecutive month in July.

Chinese consumers play a waiting game with the economy sputtering and government incentives decreasing. Still, BYD’s operating margin was a healthy 5%, while other players in the Chinese EV market even have negative gross margins, analysts say.

Six models for Europe

Meanwhile, BYD is bringing a sixth model to Europe. It is dubbed the Seal U and represents an SUV version of its compact sibling. The car must rival Europe’s best-selling EV, the Tesla Model Y, relying on cost-saving LFP batteries and an 800-volt onboard network for faster charging.

The public premiere for the Seal U is planned for the IAA Mobility Show in Münich (from 5 to 10 September), where an important delegation of Chinese car brands will put new models on display – a remarkable feat, as many Western brands decided not to show up at the German mobility fair.