BYD overcomes China’s price war on electric vehicles with record sales in the second quarter

Despite aggressive discounts on its electric cars in China, BYD’s profit nearly doubled in the second quarter compared to the first quarter of 2024. BYD attributed the increase in second-quarter profit to the recovery in vehicle sales, which hit a new record.

BYD: Record vehicle sales lead to higher Q2 profits

BYD said its second-quarter net profit reached RMB 9.06 billion, or about US$1.27 billion, up 33% year-on-year.

The electric vehicle leader reported second-quarter revenue of RMB 176 billion (US$24.7 billion), up 41% from the first quarter, and nearly surpassing its record revenue of RMB 180 billion (US$25.3 billion) from the fourth quarter of 2023.

Despite drastic price cuts and the launch of more affordable electric vehicles, BYD’s profit nearly doubled (+98%) in the first three months of 2023. It was also the highest net profit after the RMB 10.41 billion (USD 1.46 billion) achieved in the third quarter of 2023.

BYD’s second-quarter profit increase was largely due to the company’s record 986,720 alternative fuel vehicles (NEVs), including electric and hybrid vehicles, sold, up 57% from the 626,263 vehicles sold in the first quarter.

Despite profit growth, BYD’s gross margins fell 3% to 18.69% from the first quarter (21.88%) amid intensifying price wars for electric vehicles in China.

Meanwhile, gross margins for the first half of 2024 reached 20%, up from about 18% a year earlier. BYD reported revenue of RMB 301.1 billion (USD 42.2 billion) for the first half of 2024, up 15% year-on-year.

BYD’s net profit also rose 24% to RMB 13.36 billion (US$1.9 billion) in the first half due to higher vehicle sales.

Low-cost electric vehicles and expansion abroad drive growth

BYD’s car sales (and related sales) accounted for 76% of revenue, generating RMB228.3 billion (US$32 billion). Mobile phones and other businesses generated RMB72.78 billion (US$10.2 billion).

Although BYD still generates the majority of its revenue in China, the company is rapidly expanding overseas. To accelerate this progress, BYD is opening several factories overseas for local development.

BYD opened its first plant in Thailand last month, a major automotive hub and growing market for electric vehicles. The company also plans to open plants in Mexico, Hungary, Brazil, Turkey and Pakistan.

Despite Canada’s decision to impose 100 percent tariffs on Chinese electric car imports, BYD has considered selling Chinese vehicles and has already met with government officials and dealers.

BYD is already one of the leading electric car brands in Mexico. Entering the Canadian market could dramatically shake up the North American car market. American automakers like Ford and GM keep delaying their plans for electric cars, which could put them even further behind.

With record sales of NEVs in the second quarter, BYD overtook Nissan and Honda to become the world’s seventh-largest automaker. Will it surpass Ford and GM?

Electrek’s opinion

BYD continues to gain market share with its affordable electric vehicles such as Dolphin, Atto 3 and Seal. The cheapest model, the BYD Seagull EV, is available in China starting at just $9,700 (69,800 yuan).

Ford is rapidly shifting its focus to smaller, more profitable electric vehicles to keep up in the global auto race. Ford CEO Jim Farley warned that sales and global market share are at risk if automakers fail to keep up with Chinese OEMs.

We are already seeing this: BYD overtook Honda and Nissan in the second quarter. BYD is quickly catching up with Ford and the three big American companies and is taking the lead in important overseas markets.

BYD is also investing heavily in autonomous and intelligent driving technology. The company has signed a deal with technology giant Huawei to use its new driver assistance technology in new “hardcore” electric vehicles.

The new 2025 Seal EV, BYD’s answer to the Tesla Model 3, now features roof-mounted LiDAR for additional smart driving features. With a starting price of 175,800 yuan, or around $24,500, BYD’s Seal is around $8,000 cheaper in China than the Model 3 (231,900 yuan).

Although BYD is best known for its affordable electric cars, the company is expanding its market with new pickup trucks, midsize smart SUVs and electric supercars. The company is also developing new smart driving technologies to drive future profits as buyers seek the latest features.

Source: CnEVPost, BYD