BYD’s Net Profit Soars in First Half of the Year, Maintains Leading Position in New Energy Vehicle Market
July 16, 2023
Shenzhen-based automaker BYD Co. Ltd. showcased its dominance in the new energy vehicle (NEV) industry with phenomenal financial results for the first half of the year, despite a challenging market environment. The company’s net profit in the first six months experienced triple-digit growth, solidifying its leading position in the NEV market.
According to BYD’s semi-annual performance forecast for 2023, the company’s net profit attributable to shareholders of listed companies ranged from 10.5 billion to 11.7 billion yuan, representing a year-on-year increase of 192.05% to 225.43%. In the second quarter alone, BYD’s profit reached 6.37 billion to 7.57 billion yuan, increasing by 128.6% to 171.6% compared to the same period last year.
Wall Street Insights and Wisdom Research credits BYD’s strong sales growth, particularly in NEV products, for the increased profits. The company was able to maintain its market share and avoid excessive price cuts, positioning itself as a market leader amidst intense competition and a price war in the NEV industry.
In the first half of 2023, BYD sold 1.256 million NEVs, marking a remarkable year-on-year increase of 94.25%. The sales of plug-in hybrid models contributed significantly to this growth, with cumulative sales of 631,400 units, up 101% year-on-year. BYD’s impressive market share soared to 38% in the first half of the year.
Analysts emphasize that the growth rate of BYD’s net profit outpaced the sales growth rate of its NEVs, indicating the company’s effective pricing strategy and its ability to avoid profit decline experienced by other NEV manufacturers.
BYD’s success can also be attributed to lower costs resulting from a sharp drop in the price of raw material lithium carbonate. The average price of battery-grade lithium carbonate decreased by approximately 300,000 yuan over the course of six months, reducing the cost of Tesla’s NEV products by around 10,000 yuan.
Moreover, BYD’s expansion in the NEV market has simultaneously driven its growth in the power batteries sector. In the first half of 2023, BYD ranked second globally for power battery installed capacity, surpassing LG New Energy. In the domestic market, BYD claimed second place with a 90.9% year-on-year increase in power battery installed capacity and a market share of 29.85%.
BYD’s market share in the lithium iron phosphate battery segment is also worth noting. The company overtook CATL to become the leader with a power battery installed capacity of 45.4GWh and a market share of 43.68%.
While many NEV manufacturers experienced a decline in profits due to Tesla’s aggressive price war, BYD managed to weather the storm. The company’s resilient performance instills confidence, especially with the upcoming launch of high-end models and its expansion into overseas markets.
BYD’s future prospects appear promising, as it continues to make strides in the NEV market and power battery sector.
Disclaimer: The information in this article should not be regarded as personal investment advice. Users are advised to exercise caution and consider their own investment objectives, financial situation, and needs before making any investment decisions.