BYD making biggest profit ever further stokes up Chinese price war

With the comfortable certainty of 30 billion yuan (€3,83 billion) profit made in 2023, the top Chinese EV maker BYD can afford to fuel further the price war it initiated to prove electric cars can be sold even cheaper than their ICE siblings.

Next in a long row, seeing its price lowered by 5%, is BYD’s answer to the Tesla Model 3, the Seal sedan. The Glory Edition is offered in five variants with starting prices of 179,800 yuan (€23,066) up to 249,800 yuan (€32,046), respectively. In Belgium, the BYD Seal starts at €47,740.

Keeping up the pace

The Chinese market for electric cars has ‘exploded’ since the government started a campaign in 2014 to boost EV production and sales as one measure to cope with the growing problems of air pollution in big cities. But in December 2022, EV premiums for buyers were scrapped, leading to a cooldown of EV uptake.

To keep sales going at the same pace, dozens of local EV makers launched a price war in the world’s biggest car market, causing many startups to balance on the edge of bankruptcy. But that hardly affected BYD, which became the world’s biggest EV manufacturer in late December, beating Tesla for the first time.

Size matters

In 2023, BYD still realized a profit of 30,04 billion yuan compared to 16,6 billion yuan (€2.05 billion) the year before. That’s an 80,7% increase in one year, even +445,8% compared to the year before that. Also, the turnover soared by +42% to 602,3 billion yuan (€76,8 billion). Those are figures many competitors can only dream of. Xpeng announced just last week a 1.3 billion euro loss.

BYD’s main advantage is its mass-production size and the fact that it masters the whole supply chain for building EVs. It produces batteries and related components such as electric motors and electronic controls, except tires and windows, and claims everything is made in-house. Today, it delivers EV batteries for Tesla, BMW, Mercedes, and Audi, among others.

Selling five million NEVs

‘Build Your Dreams’ started as a bus, truck, and battery maker and diversified to building cars in 2003. Today, it sells hybrid and fully electric vehicles in some sixty countries worldwide, including Europe, where it has just started.

Last year, BYD sold 3 million cars, a +67,8% increase in one year. It became the first car manufacturer to sell an accumulated total of 5 million NEVs, or New Energy Vehicles, which are hybrids and battery-electric vehicles.

Price cuts for all models

After announcing new price cuts nearly every day starting in February for a whole lineup of models, BYD announced a 12% price reduction for its best-selling compact SUV, the Yuan Plus, better known in Europe as the Atto 3, at the beginning of March. In China, the Yuan Plus Glory Edition has a starting price of 119,800 yuan (€15,338).

In Belgium, for instance, the basic Atto 3, with its 60.48 kWh BYD-made blade battery offering a range of 420 km (WLTP), starts at €38,740. It is eligible for the €5,000 Flemish EV premium, but it is still 120% more than in China. But, the Chinese base version has a smaller 49.92 kWh FinDreams battery.

Now, BYD has cut the price of the Seal sedan by 10 to 30,000 yuan or 1,280 to 3,850 euros. The cheapest version in China now retails for 179,800 yuan (€23,066), but it isn’t available in Europe (yet?) and features a smaller 61.4 kWh battery and a CLTC range of 550 kilometers—that’s rather 410 km WLTP range.

The highest-priced variant (249,800 yuan or €32,046) is a dual-motor model with a blade battery capacity of 82.5 kWh and a CLTC range of 650 kilometers. That one is on sale in Belgium as the Excellence version, with a 520 km WLTP range at €51,990—so far, there is no word of prices in Europe to follow the downward trend any soon.