Updated March 26th, 2024 at 18:59 IST

BYD reports slower quarterly profit growth amid EV market challenges

According to BYD's stock market filing, net profit for the last quarter totalled 8.67 billion yuan ($1.20 billion), with revenue up 15.1 per cent at 180.04 bill

Reported by: Business Desk
BYD's EV sedan will go on sale during the latter half of 2024 in China. | Image: BYD
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BYD earnings: Chinese electric vehicle (EV) giant BYD posted an 18.6 per cent increase in fourth-quarter profit on Tuesday, marking its slowest quarterly profit growth since the first quarter of 2022. This comes as EV sales faced headwinds in the world's largest auto market due to a fierce price war.

According to BYD's stock market filing, net profit for the last quarter totalled 8.67 billion yuan ($1.20 billion), with revenue up 15.1 per cent at 180.04 billion yuan. For the entire year of 2023, net profit surged by 80.7 per cent to reach 30.04 billion yuan.

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Despite surpassing Tesla as the world's top EV seller in the fourth quarter, BYD has intensified its competitive stance this year, resorting to aggressive pricing strategies. The automaker recently launched a new version of its Seal electric sedan with a starting price 5.3 per cent lower than its predecessor, marking the 16th model introduced this year with a facelift and reduced pricing.

Last year, BYD implemented price cuts averaging 17 per cent across 13 models, which accounted for 93 per cent of its total sales in China. While several other automakers, including Tesla and Geely Auto, have also joined the price war this year, BYD's discounts have been notably deeper and more extensive.

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However, analysts caution that BYD's aggressive discounting may erode its domestic profit margins. John Zeng, head of market forecast for China at GlobalData, acknowledges that the latest round of price cuts will likely impact margins but suggests that strong cost control and growing higher-priced exports could mitigate these effects. Zeng forecasts BYD's exports to reach 300,000-400,000 units this year, building upon the 240,000 cars exported in 2023, which accounted for about 8 per cent of its global sales.

In addition to unveiling the Yuan Up subcompact electric SUV, BYD showcased its Dynasty series based on the EV architecture e-Platform 3.0. This platform incorporates blade batteries and enables ranges of over 1,000 km (621.37 miles).

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Despite challenges in the EV market, including a slowdown in sales growth and increasing competition, China continues to incentivize EV adoption through measures such as auto trade-ins and lower down payments on car loans.

(With Reuters inputs)
 

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Published March 26th, 2024 at 18:59 IST