BYD’s Net Income Jumps More Than 400% as EV Shift Takes Hold

(Bloomberg) — BYD Co.’s profit more than quintupled last year after the Chinese automaker sold a record number of electric vehicles and stepped up its battle with Tesla Inc. for market share.

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Net income soared 446% to 16.6 billion yuan ($2.4 billion), the company said Tuesday, in line with the 16 billion to 17 billion yuan preliminary profit it reported on Jan. 30. Analysts had projected 16 billion yuan, according to data compiled by Bloomberg.

BYD sold 1.86 million electric and plug-in hybrids in 2022, more than the previous four years combined and accounting for about 30% of all new-energy vehicle sales in China. Half of them were battery-only EVs. In comparison, Tesla delivered 1.31 million EVs. BYD stopped producing cars powered entirely by fossil fuels last year.

China’s new-energy vehicle market has entered a “full-expansion phase,” founder Wang Chuanfu declared at a post-earnings event in Hong Kong on Wednesday. BYD was able to post good results despite immense challenges such as chip shortages, slowing sales and weaker demand, he added.

Morgan Stanley analysts Tim Hsiao and Cindy Huang attributed the gains to record EV sales and improvement in BYD’s business of supplying batteries for smartphones, along with “well-contained costs.”

New luxury EV launches will help BYD broaden its offerings this year and should help fuel further earnings growth. But margins are likely to be squeezed by an ongoing price war in China that was sparked by Tesla with cuts on its locally-made models.

Warren Buffett-backed BYD is stepping up its push overseas, including into Norway, Denmark, the UK, Thailand and Australia.

BYD shares rose as much as 2.4% in Hong Kong. Before the results, they were down almost 20% since the start of February, when the price war intensified and data showed Chinese car sales plunged in January as purchases slowed during the Lunar New Year holiday.

(Updates with Wang’s comment in fourth paragraph.)