Even The Chinese EV Powerhouse BYD Had To Slow Down A Bit

On Tuesday, BYD Company Limited BYDDY reported its fourth quarter results that included its slowest quarterly profit growth in two years. Even the Tesla Inc TSLA rival who grew from being a battery maker to an EV juggernaut who dethroned Tesla during the last three months of 2023 as the top EV maker, is feeling the blow from the lost momentum of EV sales and a brutal price war. But, BYD is aggressively pushing forward as it unveiled its latest addition to the Dynasty series, a subcompact electric SUV, the Yuan Up.

Fourth Quarter And 2023 Highlights

According to the stock market filing, BYD reported revenue rose 15.1% to 180.04 billion yuan during the last three months of 2023. During the quarter, BYD earned a net income of 8.67 billion yuan, which amounts to about $1.20 billion. 

As for the full year 2023, BYD reported net profit skyrocketed 80.7% to 30.04 billion yuan. Throughout last year, BYD joined the price war Tesla ignited with combative discounting, with the latest rounds starting to thin out its domestic profit margins, but BYD navigated the challenging backdrop with exemplary cost control and its growing higher-priced exports.

During 2023, cars and related products made about 80% of BYD's operating revenue, with the segment recording a gross profit margin of 23.02%, improving 2.63 percentage points from 2022.

Long gone are the days when Tesla enjoyed its dominance on the EV front.

Despite the efforts of startups like XPeng Inc XPEV, Nio Inc NIO and Li Auto LI as well as of legacy automakers like General Motors G, Ford Motor F and Volkswagen VWAGY, BYD stands apart, leading the way with Tesla. It even ended 2023 by seizing Tesla’s crown during the last quarter as Tesla failed to fuel a big demand boost with its revamped Model 3 . Moreover, it kicked off the year even more aggressively, but Tesla also continued to cut prices in 2024, although it announced the increase of Model Y prices. Tesla is also being criticized for its electric pickups, with the battery range being lower than advertised and the futuristic stainless-steel design already developing rust, corrosion and blemishes.

Affordable EV is BYD’s specialty. But BYD is also going for the premium market and the world.

Tesla also teased that a next-generation affordable EV is due to enter production next year at its Austin facility in the U.S. Affordable EVs are BYD’s forte. Moreover, BYD is ramping up both EV and battery production, while it continues to build its facility in Thailand that is set to start production by the end of April.  BYD is also aiming for Hungary, Indonesia while also setting its eyes on Brazil. Production at the Brazilian facility should kick off as early as next year. But along with expanding globally, BYD is also expanding its premium portfolio, so Tesla is undoubtedly watching its back.

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