BYD Company (BYDDY) shares are trading in the green as the EV maker expects net profit for its third quarter to almost double due to record sales, despite consumer slowdowns in China’s EV market. This comes as General Motors (GM) announced it will be delaying the production expansion of its Chevrolet Silverado EV and GMC Sierra EV at its Orion Assembly plant by a year.
Yahoo Finance’s Akiko Fujita and Rachelle Akuffo discuss BYD’s results and the mixed EV picture. For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
Video Transcript
AKIKO FUJITA: Well, we are watching shares of Chinese EV maker BYD pop after the company said it expects its third quarter net profit to almost double, driven by record sales despite increased competition and a slowdown in the Chinese consumer. This news comes from BYD as GM announces it’s delaying the production of its electric trucks and a Michigan plant by at least one year, citing slow adoption rates. So we are seeing a mixed picture here from electric vehicle makers.
Rachelle, the BYD story is certainly a very interesting one. Impressive if, in fact, we do see those record sales in the quarter, given just how aggressive not just BYD but Tesla and other EV makers have been in the quarter in their pricing to try and attract more consumers at a time when we have seen a bit of a pullback among those consumers. You know, a company like BYD increasingly, yes, China is the largest EV market, but increasingly going to have to look outside. Europe is one they’ve really honed in on as they expand their footprint there to 15 countries.
RACHELLE AKUFFO: It’s true, because when you look at some of the price points for BYD, their cheapest EV starting at about $10,000, making it very competitive, but as you mentioned, not available in all markets. Their most expensive one, their higher end, one starting at about $150,000. But what BYD does have the edge in the ability to ramp up production. They’re opening even more plants, production plants, in China, and even regarding to the success, BYD credited this quarter’s success to, quote, “Leveraging on its improving brand influence, continuously expanding scale advantage, and strong industrial chain-wide cost control capacity, demonstrating strong resilience.”
And so when you have as many models as BYD already has, when you compare it to Tesla, these are the top two EV makers in the world. Tesla still ahead, but BYD has been closing that gap steadily. But they did get into that– sort of that tete a tete battle when Tesla started making those price cuts, which did also cut into BYD’s bottom line, but because they do have that range of products available, it did still put them in a very good position, and they’re looking very positive here. I mean, they’ve been trying to keep up with those price cuts. Tesla still leading, though, in EV sales globally, but, you know, BYD catching up slowly.
AKIKO FUJITA: Yeah. I mean, one of the big benefits for BYD is that vertical integration we talk about a lot. They do control their own supply chain, whether it’s the batteries or other parts, so that allows them to control the costs a little more. That’s not something that Tesla has, but we talk about GM as well. It is something they are trying to build out as well with their battery factories too, but certainly the company looking kind of in a different outlook here, at least among some of these EV trucks that they’ve talked about.
Higher price points for sure, and, Rachelle, you know, I keep wondering, this is the question that’s asked within the EV market, I realize we’re talking about a global market, but where is that next lever? Is it from sort of the sedans? Is it from the SUVs and the trucks that we have seen increasingly being pursued, at least in the North American market? Something still to be determined, I guess, because there’s still a lot of market there to capture when you consider, what is it, roughly 10% right now of the overall–
RACHELLE AKUFFO: It’s true.
AKIKO FUJITA: –auto market?
RACHELLE AKUFFO: And people– I think people still want a better price point. Not everyone can afford a Tesla. Even with these new price cuts that Tesla has, people still– you know, if they’re going to dip their toe in the EV market, they want the infrastructure there and they want the pricing to make sense.