Chinese BYD on bed of roses expecting 86.5% profit growth

BYD (Build Your Dreams), the Chinese car manufacturing giant that dethroned Tesla as the world’s biggest EV maker, expects to be on a bed of roses with a profit growth of 86.5%. That’s up to between 29 billion and 31 billion yuan (€3,98 billion) for 2023 compared to the previous year, driven by solid sales and rigid cost cuts.

The results were achieved thanks to factors including its ‘rapid growth’ of overseas sales, scale advantage, and cost control ability in the supply chain, the Shenzhen-based company said, according to the Reuters press agency. Still, this growth is not accelerating as spectacularly as in 2022, when BYD saw a 446% net profit surge to 16.6 billion yuan (€2,13 billion).

And while the expected figures are a record, they’re short of analyst estimates of 31.5 billion yuan. As a result of the announcement, the EV maker’s Hong Kong-listed shares decreased by 4% in early trading on Tuesday.

Fierce price war

According to the Bloomberg news agency calculations, the fourth quarter net income will be between 7.2 billion yuan and 9.2 billion yuan (€1,18 billion), down from the previous quarter’s 10.9 billion yuan (€1,40 billion).

Like other EV makers, Bloomberg says a price war has hit BYD in China, the world’s largest auto market, where it had to discount its Qin, Han, and Tang models, famous in its home country, by as much as 10,000 yuan (€1.286).

Target of 3 million vehicles

According to Chinese media, for the full year 2023, BYD sold 3,024,417 NEVs (New Energy Vehicles), reaching its target of 3 million units, up 62.3 percent year-on-year. Of these totals, 242,765 NEVs were sold overseas, up 493.51% year-on-year.

It leapfrogged Tesla for the first time as the biggest EV maker in the last quarter, delivering 526,409 vehicles, while Tesla delivered 484,507 cars. Tesla noted a 19.4% growth in net profit in 2023 to $15 billion (€13,85 billion).

“Despite more intense competition in the industry, BYD has demonstrated strong resilience by realizing a significant improvement in earnings with its improved brand power, rapid growth in overseas sales, continuously expanding scale advantage, and strong industrial chain cost control capability,” BYD said.

 

 

 

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