The Chinese are coming: BYD , successful in China, is targeting foreign markets

The BYD Seal, recently launched in the UK, starts at £40,000 and is aimed to compete with BMW and Tesla

 

 

BYD (a Chinese EV manufacturer) has reported a more than 200 per cent jump in first-half earnings as Tesla’s main Chinese rival shrugged off an intense price war that has battered foreign groups and smaller start-ups in the world’s biggest car market.

BYD said on Monday that net income rose 205 per cent to Rmb10.95bn ($1.5bn) in the six months to the end of June as the Warren Buffett-backed group cemented its dominance over the market for plug-in hybrid and battery-powered electric vehicles in China.

Revenue was up 73 per cent to Rmb260.1bn.

The result, which was published after markets closed in China on Monday, follows a 400 per cent jump in annual net profit in 2022. It comes despite a price war that has squeezed both smaller companies and larger auto groups in China. And it signals the latest warning to automakers around the world as BYD sharpens its focus on exporting its low-cost EVs to foreign markets.

China is forecast this year to become the biggest exporter of cars, overtaking Japan.

BYD, which is also one of the world’s biggest EV battery producers, is spearheading a wave of Chinese EV exports to Europe, among other regions. Backed by a low-cost supply chain in China, the company, led by billionaire founder Wang Chuanfu, is expected to challenge legacy groups such as Volkswagen, which have been slower to take up the move to EVs.

BYD took about a 37 per cent market share of China’s EV sales in the first seven months of 2022, reflecting year-on-year sales growth of 75 per cent, according to data from Shanghai consultancy Automobility.

Among the 10 bestselling EV models in China — including plug-in hybrids — seven are made by BYD. Elon Musk’s Tesla is ranked second in China with just under 9 per cent of the EV market, including plug-in hybrids, following year-on-year sales growth of 58 per cent so far this year.

Automobility founder Bill Russo pointed out that EV sales in China had become increasingly concentrated with 10 groups commanding 80 per cent of the market and hundreds of companies fighting for the remaining 20 per cent.

“A much larger number of [electric vehicle] companies are finding it very difficult to compete with the likes of BYD and its vertically integrated supply chain and cost structure,” he said.

Russo added that while BYD had sold 1.39mn vehicles in China this year, which is 1mn more cars than Tesla, sales dipped from June to July, its first monthly drop for several years.

Toby Doyle
Author: Toby Doyle

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