Highlights;
- BYD leads China’s competitive EV market despite a July slowdown.
- Q2 net profit fell 30% year-over-year to $891 million amid a price war.
- Revenue grew 14% to $22.9 billion, driven by overseas expansion.
- China’s EV prices dropped 19% over two years due to intense competition.
- BYD’s H1 profit rose 14% to $2.15 billion, with record EV sales.
BYD Maintains Lead in China’s Competitive EV Market Despite July Slowdown
Hong Kong-listed shares of BYD, a leading Chinese electric vehicle (EV) manufacturer, dropped nearly 8% on Monday following the company’s report of a significant decline in quarterly profits. This downturn occurred amid an intense price war in the domestic EV industry. On Friday, BYD disclosed a net profit of 6.36 billion yuan ($891 million) for the April-June quarter, marking a 30% decrease compared to the same period last year, according to data from LSEG.
Despite this profit drop, BYD’s revenue rose 14% year-over-year to approximately 201 billion yuan, driven by strong overseas sales growth. However, the company’s profitability has been impacted by the ongoing price competition in China’s EV sector, which has become increasingly common. In its mid-year earnings report, BYD noted that “increased price competition and excessive marketing practices” in the domestic EV market have had a negative impact on the industry’s development.
According to a recent report by Nomura, citing data from the Autohome Research Institute, retail car prices in China have fallen by approximately 19% over the past two years, dropping to around 165,000 yuan ($22,900). This decline has been exacerbated by the aggressive discounting strategies employed by manufacturers. In an effort to address unfair competition, Chinese authorities issued a warning in May threatening penalties for automakers engaging in excessive price-cutting practices.
For the first half of the year, BYD’s net profit reached 15.5 billion yuan, reflecting a 14% increase, while its revenue climbed 23% to 371.3 billion yuan. The company’s new energy vehicle sales also hit a record high during this period. Amid the intense competition in the domestic market, Chinese automakers, including BYD, have been actively expanding into global markets. Over the past two years, BYD has opened showrooms across Europe and introduced its vehicles at competitive prices, solidifying its position as a key player in the international EV market.
In July alone, BYD recorded over 13,000 new registrations in Europe, a staggering 225% increase compared to the same month last year, according to data from the European Automobile Manufacturers Association. This highlights the company’s successful efforts to gain traction in overseas markets despite challenges at home.
