Amidst a relentless pricing war in its domestic electric vehicle (EV) market, BYD defied expectations and saw a dramatic increase in earnings during the spring season. Contrary to predictions, the Chinese automaker's profits skyrocketed by a whopping 33%, reaching an impressive 9.1 billion yuan (equivalent to 1.15 billion euros), according to their own reports. This marked the largest profit surge since the end of 2023. Furthermore, revenue surged by 25%, climbing from 176.2 billion yuan in the second quarter.
BYD managed to claim a larger slice of the Chinese market during this period, overtaking Volkswagen to clinch the title of the leading automaker. Despite the intense competition, BYD has successfully preserved its market position. The company's tactical approach includes vertical integration, where essential components such as batteries are manufactured in-house.
BYD sets its sights on a remarkable 20% yearly revenue growth and provides substantial discounts on its popular Dynasty and Ocean series. The company aims to reinforce its position as the dominant player with a share of more than one-third of new energy vehicles (NEVs) in China. This broad category encompasses not only electric vehicles but also hybrid models.
In the second quarter, BYD delivered 426,039 fully electric vehicles, representing a 21% increase compared to the previous year. Although Tesla posted 443,956 unit sales, BYD momentarily outpaced Tesla in deliveries during the fourth quarter. In Germany, BYD saw a surge in demand, delivering 1,432 vehicles and registering 4,317 units during the initial stages of the year.
In response to the fierce domestic competition and soaring tariffs, BYD, along with other Chinese EV manufacturers, is venturing into international territories. Europe, specifically, serves as an appealing target, with BYD planning to initiate operations in Hungary and other nations.
BYD's substantial profit growth, reaching an impressive 9.1 billion yuan, is evident in the quarterly figures. Going forward, the company intends to sustain this momentum, aiming for a 20% annual revenue growth.
Additional Insights:
- BYD's profit boost is due to several strategic initiatives, such as an aggressive expansion strategy, vertical integration, lower battery costs, and higher sales volumes[3].
- Government subsidies and manufacturer discounts also contribute to the competitiveness of BYD's vehicles[2].
