Chinese electric vehicle (EV) maker BYD posted its weakest quarterly profit growth since 2022 on Monday while its revenue growth slowed to the lowest level in nearly four years, hit by slowing EV demand and a bruising price war in the world’s largest auto market.
First–quarter net profit was up 10.6% at 4.57 billion yuan ($631.08 million) while revenue grew by 4% to 124.94 billion yuan, BYD said in a stock market filing.
The quarterly results suggest BYD still pulled ahead of Tesla which reported its first quarterly revenue fall since 2020 when the COVID-19 pandemic hampered production and deliveries.
The biggest Chinese rival to Tesla handed back the world’s top EV seller title to the U.S. giant in the first quarter after winning it last year.
With a brand portfolio at different price points, BYD has ramped up efforts to move upmarket while doubling down on discounts to vie for cautious consumers amid a sputtering economic recovery.
BYD unveiled the U7, its third ultra-luxury model under the Yangwang brand at the Beijing auto show from Thursday where BYD‘s premium brand Denza also showcased its first sedan.
The push to sell to higher-end segments came alongside a protracted and intensified price war in China that has pulled in more than 40 brands and seen BYD slashing prices since February on the latest versions of its lineup by 5%-20% from earlier iterations.
In a recent research note, Goldman Sachs forecast lower new energy vehicle unit profit in China this year compared with 2023 and said it was possible the industry’s profitability could turn negative if there are further price cuts.
Targeting a 20% jump in annual sales in 2024 from its record-breaking sales last year, BYD is under pressure from local EV upstarts betting big on an all-electric future.
In a much-talked-about interaction, BYD founder Wang Chuanfu and Xiaomi founder Lei Jun visited each other’s booths at the Beijing auto show. Lei, having created an online sensation with the launch of the smartphone maker’s first car SU7, vowed to step up cooperation with BYD.
($1 = 7.2416 Chinese yuan renminbi)