BYD, the world’s largest electric-vehicle maker, reported a 145% jump in second-quarter profit, buoyed by record deliveries in the face of a heightened price war in China that also ate into its margins. The Shenzhen-based company’s net profit for the three months ended June rose to CNY6.8 billion, in line with market expectations, according to a filing to the Hong Kong stock exchange. It was BYD’s second-highest quarterly profit after the CNY7.3 billion in the fourth quarter of 2022. Revenue rose 67% year-on-year to about CNY140 billion. The carmaker posted a net profit of CNY10.95 billion in the first half, up 205% year-on-year. “Rising sales volume drove BYD’s earnings in the first half and consolidated its position as China’s top EV builder,” Huang Chengbao, Analyst at Guolian Securities, said in a research note. “Escalating competition and a potential rise in material costs carry risks for BYD’s further growth.” BYD delivered a record 703,561 pure electric and plug-in hybrid vehicles in the second quarter, up 98% year-on-year. In the first six months the company sold a total 1.26 million units, up 96% from the same period in 2022.
Since February, BYD has launched new editions of eight of its bestselling models at prices 4% to 25% lower than the previous versions. Its gross profit margin in the second quarter stood at 18.7%, 4.1 percentage points lower than in the last three months of 2022. BYD has historically been better known for cheaper electric cars priced below CNY200,000, about 30% below premium models from Tesla and Chinese competitors such as Nio and Xpeng. The carmaker dethroned Tesla as the world’s largest EV maker last year as its mass-market brands, including Dynasty and Ocean, attracted thousands of middle-class drivers in mainland China. It is looking to move up the value chain with the launch of three premium and luxury brands to appeal to wealthy consumers, the South China Morning Post reports.
BYD ranked among the top 10 auto companies globally for the first time, with vehicle sales in the first six months this year exceeding those of Mercedes-Benz and BMW. BYD ranked 16th in sales in 2022 and did not even make the top 20 in 2021. BYD's market share in the domestic NEV market stood at 33.5% as of the end of June.
Chinese electric vehicle startup Xpeng has inked a deal with Didi to purchase its smart EV unit, which would, among other things, give the nine-year-old EV maker access to the vast ride-hailing market. As part of the deal, the startup will launch a new brand, currently developed under the project name MONA, in 2024, whose models will be priced around CNY150,000, lower than those under the carmaker’s namesake Xpeng marque. Didi will provide support for the MONA project with “access to its nationwide shared mobility market”, said the two companies in a joint statement. The deal will see Didi acquire about 3.25% of the Hong Kong-listed automaker’s equity, which could increase depending on whether production and sales targets are fulfilled. The first model, a compact EV, will hit the market in 2024. He Xiaopeng, Chairman and CEO of Xpeng, told reporters that he is optimistic about the segment, expecting the model’s annual sales to hit at least 100,000 units.
The deal with Didi is Xpeng’s second major agreement in around a month. On July 26, the startup announced that Germany's Volkswagen would acquire 4.99% of its equity for around USD700 million. Xpeng is facing increasing competition in the Chinese EV market. Its sales in July totaled 11,008 units, down 4.5% year-on-year, despite a booming domestic EV segment. Its sales in the first seven months stood at 52,443 units, down 35% from the same period last year, the China Daily reports.
