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BYD’s annual sales have topped $100bn for the first time, as China’s electric vehicle champion dominates its domestic market and presses ahead with an overseas expansion.
Shenzhen-based BYD said revenue rose 29 per cent to Rmb777bn ($107bn) last year, surpassing the Rmb766bn forecast by analysts, on the back of strong demand for plug-in hybrids. The group’s net income climbed 34 per cent to Rmb40bn from a year ago.
Unlike its US rival Tesla, which only sells fully electric vehicles and reported revenue of $98bn last year, BYD has benefited from resurgent demand in China for hybrid vehicles.
Following a years-long price war in China, the world’s largest EV market, BYD has also started to shift from an aggressive pricing strategy that was designed to win market share to one focused on trying to boost its profitability.
“Leading players in the market, including BYD, have moved away from a ‘price-for-volume’ approach”, said Serena Shen, an auto analyst at S&P Global Mobility. “Instead, they attempt to raise retail prices by innovating and updating their models.”
The results cap a remarkable 12 months for the Chinese group, which has this year sought to make its line-up more attractive by introducing several new technologies, including its so-called God’s Eye advanced driving system.
Founder Wang Chuanfu last week unveiled a battery charging system that the company said would allow customers to charge EVs in five minutes, helping send its shares to a record high.
The shares have eased back from last week’s high, but have gained 91 per cent over the past 12 months. They closed up 3 per cent at HK$403.40 on Monday.
By contrast, shares in Tesla, which has yet to hit the $100bn annual revenue milestone, have fallen 32 per cent this year after hitting a record high in December following Donald Trump’s election victory.
BYD is also pushing ahead with an aggressive expansion outside China, betting that it can undercut legacy carmakers such as Volkswagen and Toyota in markets from Europe to south-east Asia.
Last month, BYD, whose overseas sales passed 400,000 vehicles out of a total of more than 4mn, raised almost $6bn to fund its growth outside China. The group, which accounted for about 16 per cent of all the cars exported from China in January and February, opened factories in Thailand and Uzbekistan last July.
BYD is at the forefront of a boom in Chinese cleantech exports. In addition to cars, the company produces a range of energy-related technologies, including lithium batteries for large-scale energy storage and solar modules.
The company’s rise has sparked fears among western carmakers and governments about the advances China has made in battery technology. The EU last year imposed steep tariffs on Chinese electric vehicles, a move that followed an investigation by the bloc into Beijing allegedly providing unfair support to the industry.
BYD’s international ambitions have also raised questions over how it will handle tougher labour and environmental standards. Its $1bn development in Brazil was delayed in December when the authorities halted construction over workers being subject to “slavery”-like conditions.
BYD subsequently fired a Chinese contractor and said it had “zero tolerance” for disrespect of local laws and human dignity.
