China EV leader BYD reported a sharp drop in first-quarter profit as Beijing scaled back tax incentives and competition intensified, especially in the low-priced segment. The company said it plans to speed up overseas expansion to offset weaker sales at home.
According to BYD’s earnings report released on April 28, first-quarter net profit fell 55.4% from a year earlier to 4.085 billion yuan (about 881.9 billion won). The decline was steeper than the previous quarter’s 38.2% drop, extending a profit slide to a fourth straight quarter. Revenue fell 11.8% to 150.225 billion yuan.
China this year cut the electric-vehicle purchase-tax exemption in half, prompting many consumers to wait, while price competition intensified for EVs priced below 150,000 yuan. The China Association of Automobile Manufacturers said first-quarter sales of new energy vehicles fell 23.8%.
BYD’s first-quarter sales fell 30% from a year earlier to 700,000 vehicles. Overseas exports rose 56% over the same period but were not enough to prevent an overall decline. Monthly sales were down for a seventh straight month as of March. The China Passenger Car Association said BYD’s domestic EV market share in the first quarter slipped to 25.7% from 31.5% a year earlier, down about 6 percentage points.
With the domestic slowdown showing signs of lasting, BYD has moved to target overseas markets more aggressively. It recently raised its overseas sales target for this year to 1.5 million vehicles from 1.3 million set earlier. The company aims to increase exports of new energy vehicles by more than 40% from last year’s 1.04 million. Overseas sales now account for 46% of BYD’s total, it said. The company also cited rising global demand for EVs as international oil prices climb in the wake of the Iran war.
BYD is also emphasizing technology. It recently unveiled ultra-fast charging that it said can fully charge in nine minutes at room temperature and in 12 minutes at minus 30 degrees Celsius, aiming to reduce charging-time concerns and attract drivers of gasoline-powered vehicles.
The company is also pursuing the premium segment. At the Beijing auto show, it introduced an electric supercar, the U9X, and a flagship SUV, the Datang, under its luxury brand Yangwang, a move seen as laying groundwork to compete with European premium automakers.
Bill Russo, CEO of Shanghai-based consultancy Automobility, told the Nikkei that BYD is shifting away from volume-driven growth in China and focusing on a more balanced, globally diversified business with higher profitability. “Global markets are less overheated than China and have a more sustainable profitability structure,” he said.
* This article has been translated by AI.
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