The brutal price war on the Chinese market is eating into the electric car manufacturer’s sales and profit growth BYD. In the fourth quarter, sales grew “only” by 15 percent to 180.04 billion yuan (23 billion euros), and net profit grew by 19 percent to 8.67 billion yuan, BYD announced on Tuesday. That was the smallest quarterly profit increase in almost two years.
For the full year 2023, profit of 30.04 billion yuan was 81 percent above the previous year’s level. Sales for the year as a whole were 602.3 billion yuan – 42 percent higher than the previous year.
With high discounts in the Chinese market – last year, according to Reuters calculations, an average of 17 percent for the 13 newly introduced models – BYD Tesla took the crown as the world’s best-selling electric car manufacturer in the fall. Although this eats into returns, the Chinese are continuing their strategy this year with even more aggressive price discounts. The revised Seal electric sedan, which came onto the market on Monday, costs 5.3 percent less than the previous model. It is the 16th vehicle since the beginning of the year for which BYD has reduced the price after a facelift.
BYD continues to heat up the price war
BYD is reacting to the fact that the market for Electric cars in China doesn’t grow nearly as much anymore. Last year, sales figures only increased by 21 percent – after 74 percent in 2022. Competitors like Tesla, Geely, GAC Aion, Leapmotor and Xpeng are getting involved in the price war with BYD, but are not offering anywhere near such high discounts.
China-focused market researcher John Zeng of GlobalData in London said BYD could make up for the price reductions with growing demand and increasing exports, which are subject to higher prices. Last year, the 240,000 vehicles exported accounted for 8 percent of production, and Zeng expects 300,000 to 400,000 export cars for 2024.