BYD said its fourth-quarter profit increased by 18.6%. This is the slowest increase in three months since the beginning of 2022. The decline in dynamics is due to a decline in sales of electric cars in the Chinese market caused by a brutal price war. Last quarter, BYD's net profit reached ¥8.67 billion, and revenue increased by 15.1% to ¥180.04 billion. The firm's annual net profit increased by 80.7% to ¥30.04 billion, LBLV analysts note.
Previously, BYD was able, through an aggressive discount campaign, to push Tesla out of the Chinese market. This year the company began to act even more actively in this area. At the beginning of this week, it set the initial price of the updated version of Seal 5.3% lower than that of its predecessor. The largest discount BYD has offered since the beginning of 2024 is 21.6%. Last year, the automaker lowered prices for 13 models, covering about 93% of total sales in China. The average discount was 17%.
This year, several new players have entered the price war. Among them were Geely Auto, GAC Aion, Leapmotor and Xpeng. So far, the discount programs of these companies are not able to compare with BYD's offers.
The growth rate of electric vehicle sales in China in 2023 has slowed significantly
Experts note that the latest series of price cuts will inevitably cause a reduction in profitability. This trend may be largely mitigated by BYD's strict cost controls and rising exports at higher rates. Analysts expect that the Chinese company will export 300-400 thousand cars this year. Last year, BYD sold more than 240 thousand cars abroad (8% of total sales).
Sales of machines and related products brought the company 80% of its operating revenue. Gross profit from these operations for 2023 amounted to 23.02% (2.63 percentage points higher than a year earlier). On March 26, the company unveiled the Yuan Up sub-compact electric car (the newest addition to the Dynasty lineup). Its initial cost is ¥96.8 thousand.
When developing the new model, the e-Platform 3.0 electric car architecture was used. It has a frame structure on which blade batteries are installed. This solution can provide a range of more than 1 thousand kilometers, reported on lblv.com.
Sales of electric cars in China in 2023 increased by 20.8%. In 2022, this figure rose by 74.2%. At the same time, the increase in sales of hybrid cars slowed from 160.5% to 82.5%. China is introducing stimulus measures, attracting cautious consumers. To achieve this, the country has introduced car exchange programs and reducing the down payment on car loans.
Ekaterina Matveeva, financial analyst at LBLV