Update: 11:48 AM ET: para. 1 & 2 – updated to reflect mathematical accuracy
BYD has apparently been unfazed by Tesla’s dramatic price cut at the beginning of the year, as it has reported an 11-fold profit increase in Q4 year over year.
Tesla is the clear EV leader in the western world, but that isn’t the case in the east. Domestic Chinese brand BYD has quickly eclipsed Tesla in EV sales and is now challenging long-time leader Volkswagen for overall regional dominance. This morning, the company reported that it has gotten closer than ever to achieving that dominance, as it reported an 11-fold increase in net profit during Q4, year over year.
According to BYD’s report from this morning, the Chinese auto brand, which receives just over three-quarters of its revenue from its auto business, saw a dramatic boom during Q4 2022, taking its net profit to stratospheric levels. BYD earned a net profit of $1.06 billion during Q4, up from just $87.4 million during Q4 the year prior, an increase of 1,112.62%.
BYD auto sales were the most significant success of the Chinese conglomerate. Over the past four months, it has surpassed the previous market leader Volkswagen in terms of overall sales. During the first two months of this year, its EV sales have represented 41% of China’s EV market, or the “new energy vehicle” market.
On top of its incredible sales boom, BYD earned a record profit margin of 20.4%, which was a substantial growth since 2021.
Besides its auto sales, BYD had massive success with its LFP Blade Battery, which now represents 17.6% of the global LFP battery market.
These results come as a shock to many western investors who have seen the EV price war erupt in China, with many assuming that Tesla had done substantial damage to the Chinese hegemon; that is clearly not the case. Moving forward, BYD plans to double down on its auto business and introduce more EV models to help compete against growing competition from domestic competitors, NIO and Xpeng.
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