It’s a boost for BYD: China, the world’s largest producer of greenhouse gases in absolute terms, is aiming for car sales in 2035 that will mainly consist of electric and hybrid vehicles. Generous purchase subsidies have allowed sales to take off in recent years, while many innovative local manufacturers have emerged to support this transition to the world’s largest automotive market. This context has been more than favorable to BYD, which dominates the sales of so-called “clean” vehicles in China.
The group posted a first-half net profit of 10.95 billion yuan (1.39 billion euros), up 204.6% year on year, he said in a statement. This result is in line with estimates made in July by BYD (between 10.5 and 11.7 billion yuan). Its half-yearly turnover is also up sharply over one year (72.7%), to 260.1 billion yuan (33.06 billion euros). “Brand power,” economies of scale, and “lower raw materials” drive the strong performance, according to BYD (Build Your Dreams).
Originally specializing in the design and manufacture of batteries, the firm diversified into the automotive sector from 2003. Many foreign manufacturers (Tesla, BMW, Mercedes, Audi, Toyota, Ford, etc.) now depend on BYD for their batteries. The group also became this month the first global manufacturer to cross the symbolic bar of 5 million electric vehicles produced. Based in Shenzhen (southern China), BYD ceased production of gasoline cars last year and now focuses only on hybrid and electric models.
Many local brands (SAIC-GM-Wuling, Geely, XPeng, Nio, etc.) compete in this niche in China with Tesla and other foreign manufacturers in a very competitive market. “In the first half of the year, Chinese automakers took advantage of the shift to electric, smart vehicles […] and established themselves as serious competitors,” BYD said. Its competitor XPeng, very prominent in this niche, announced on Monday the acquisition, for nearly 700 million euros, of the electric subsidiary of the “Chinese Uber”, Didi, and the joint launch of a new brand of vehicles.
Sales of hybrid and electric models nearly doubled in China in 2022 to account for more than a quarter of vehicles sold, according to the China Federation of Individual Car Manufacturers (CPCA). To keep up the pace, automakers have been waging a price war in recent months as the Chinese rein in consumer spending amid an economic slowdown. By July, however, BYD remained the biggest seller of electric vehicles in China with some 262,000 units sold, according to the company.
For comparison, Tesla, its main competitor, sold about 64,000 over this period, according to the CPCA. BYD, which markets its vehicles in around fifty countries, is present in Europe and is now eyeing France. The French Minister of the Economy, Bruno Le Maire, had met in China last month with the boss of BYD, in order to convince him to choose France for his future European factory.
