The Chinese EV market is a battlefield, and as we know, the battle is to the strong. While Tesla dodges not to be knocked out of the stride, its number-one rival runs a victory lap. Chinese carmaker BYD is pulling ahead in the race, posting a 204.68% surge in profit in the first half of the year. Lost for words! Just kidding – we won’t leave you without a comprehensive overview. How could you possibly think so?
Trading in Hong Kong, shares of Chinese automaker BYD witnessed a nearly 4% increase on Tuesday, a day after posting a standout surge in first-half profit.
Thanks to record deliveries, the net profit of this Chinese electric car manufacturer skyrocketed by a staggering 207%. Between January and June, net earnings soared to 10.95 billion yuan ($1.50 billion), a significant leap from the 3.6 billion yuan reported the previous year. Additionally, revenue experienced a notable increase, marking a 72.7% rise to 260.12 billion yuan ($35.6 billion) over the span of six months. These figures represent the company's most impressive quarterly sales results to date.
According to the company's reports, sales of passenger new energy vehicles in the second quarter reached 700,244 units, marking a 98% year-on-year increase. By comparison, Tesla (NASDAQ:TSLA) reported global deliveries of 466,140 vehicles during the same quarter.
China holds the title of the world's largest auto market in terms of both sales and production. It is also the biggest EV market in the world, where an intense price war is breaking out. In an attempt to secure a larger market share amid escalating competition in China, Elon Musk's EV enterprise substantially lowered its prices in August. Likewise, earlier this year, domestic rivals of BYD, including Nio and Xpeng, also slashed their prices. This strategy aimed at squeezing out the weaker players certainly adds a layer of pressure.
These price adjustments align with consumer caution stemming from the weaker-than-expected economic recovery in China after strict Covid restrictions were lifted. Given the current situation, it seems like a sensible move, doesn't it?
In addition to its automobile ventures, BYD is diversifying its portfolio beyond the automotive sector. BYD Electronics, a manufacturer of various products ranging from smartphones and tablet PCs to new-energy vehicles, robots, and communication equipment, has announced its acquisition of a U.S.-based electronics manufacturing business for an estimated $2.2 billion.
All that’s been said earlier indeed holds promise. However, that’s always a catch. While the analysts' opinions and some pieces of economic news are informal, they should not serve as a solar basis when it comes to decision-making. It's crucial to conduct your own analysis before stepping into a trade.
