Chinese electric vehicle giant BYD has reported a substantial increase in profits and sales for the second quarter of 2024, defying intense competition and price pressures in the global EV market. The company’s net profit surged by 32.8% to 9.1 billion yuan ($1.3 billion), while revenue grew by 25.9% to 176.2 billion yuan. This marks BYD’s fastest profit growth since the end of 2023, despite a general slowdown in high-value item spending in China, the world’s largest automotive market.BYD’s success is largely attributed to its vertical integration strategy and in-house production of key components, including batteries. This approach has allowed the company to maintain ‘absolute pricing power’ for vehicles priced under 150,000 yuan ($21,046) in China, according to Rosalie Chen, an analyst at Third Bridge. The company has leveraged this advantage to offer aggressive discounts on its best-selling Dynasty and Ocean series, consolidating its market leadership with over a third of China’s new energy vehicle market.Internationally, BYD is making significant strides. Executive Vice President Stella Li stated that ‘nearly half’ of the company’s sales will come from abroad in the future. BYD is currently on track to reach 500,000 overseas sales this year and has expanded to dozens of countries. The company is building factories in Turkey, Hungary, and Brazil, and has committed to constructing a facility in Indonesia. However, BYD faces challenges in Europe, where it is subject to a 17% additional tariff on EV exports from China to EU countries.Looking ahead, BYD aims to boost profitability through increased sales of its three premium brands: Denza, Fangchengbao, and Yangwang, which together accounted for 5% of its total sales in the first half of 2024. The company is also intensifying efforts to develop advanced intelligent functions, such as autonomous driving systems, investing significantly in hiring thousands of engineers for this initiative.As BYD continues its rapid growth and international expansion, it is poised to challenge established global automakers. Counterpoint Research predicts that BYD could surpass Tesla to become the world’s largest seller of electric vehicles in 2024, with a market share estimated at 17.7%, compared to Tesla’s 17.2%. This development signals a shifting landscape in the global EV market, with Chinese manufacturers increasingly taking center stage.
Key points
- BYD reported a 32.
- The company aims to have nearly half of its sales from overseas markets in the future.
- BYD is expanding globally but faces challenges such as EU tariffs on Chinese EV exports.
- Analysts predict BYD could surpass Tesla as the world’s largest EV seller in 2024.
8% increase in net profit to 9.
1 billion yuan ($1.
3 billion) in Q2 2024.
Contradictions👾While BYD reports strong growth and expansion plans, some sources highlight challenges such as EU tariffs and potential market saturation.
The impact of these factors on BYD’s long-term growth prospects remains unclear.
