HONG KONG – BYD reported another stellar quarter of earnings on the back of booming electric-vehicle (EV) sales that has propelled the company past Volkswagen to become China’s top-selling car brand.
Net income in the three months through March surged 411 per cent from a year earlier to 4.13 billion yuan (S$798 million), the Shenzhen-based company said on Thursday. Operating revenue rose 80 per cent to 120.2 billion yuan, while its gross margin was 17.9 per cent, up about 5.5 percentage points.
Sales of BYD’s passenger electric vehicles almost doubled to 550,000 globally in the quarter. While the company has been intensifying its push overseas, prioritising Europe, Latin America and Asia, about 440,000 of its sales in the period were in China, amounting to roughly 40 per cent of all EV sales in the world’s biggest auto market.
Volkswagen was the bestselling brand among automakers in China since at least 2008, when data from the China Automotive Technology and Research Centre became available. The German firm sold 427,247 vehicles under its brand in the country in the first quarter, with EVs accounting for only 6 per cent.
BYD’s shares rose 1.1 per cent in Hong Kong on Friday morning, taking their advance this year to 24 per cent.
BYD’s margins should continue to grow in 2023, helped by its Denza and U8 models, Citigroup analysts said. Morgan Stanley said the results showed resilience amid industry headwinds.
BYD, whose biggest investor is Mr Warren Buffett’s Berkshire Hathaway, aims to deliver three million to 3.7 million EVs this year, according to Bloomberg Intelligence, having sold 1.86 million in 2022, more than the previous four years combined.
Growth is likely to stem from a range of new models that BYD unveiled at this month’s Shanghai auto show, covering both ends of the price spectrum – from the 73,800 yuan Seagull hatchback to the 1.1 million yuan Yangwang U8 luxury sports utility vehicle.
Despite rising raw material costs and spending on factories and research and development, as well as being the seasonally slowest quarter, BYD posted its third-highest net income on record, said Mr Jack Shea, founder and chief financial officer of fund Snow Bull Capital. It has a stake in the EV maker. BLOOMBERG
