BYD sees 32.6% profit slump as China's EV race intensifies
What's the story
China's electric vehicle (EV) leader, BYD, has reported a 32.6% drop in its third-quarter profit. The Shenzhen-based company said its net profit for the period stood at ¥7.8 billion ($1.1 billion), down from last year's figure of ¥11.6 billion. This marks the second consecutive quarterly decline for BYD and highlights the challenges it faces in China's competitive EV market.
Earnings report
BYD's Q3 earnings miss analyst expectations
BYD's third-quarter earnings also fell short of analyst expectations. A Bloomberg survey had estimated a profit of ¥9.6 billion for the period. The company's revenue for the quarter was also below market expectations, coming in at ¥195 billion, 9.7% lower than the average forecast of ¥215.9 billion from analysts surveyed by Bloomberg News.
Market dynamics
Sluggish domestic consumption, fierce competition in China's EV market
The decline in profit can be attributed to sluggish domestic consumption and fierce competition in China's EV market. To counter these challenges, BYD has been expanding its footprint overseas. However, despite strong sales abroad, it is not enough to offset the weak performance at home. "Its robust sales abroad are not enough to offset its weak domestic performance," said Ivan Li, a fund manager at Loyal Wealth Management in Shanghai.
Delivery details
BYD's vehicle deliveries and revenue for the 3rd quarter
In the third quarter, BYD delivered 1.11 million pure electric and plug-in hybrid vehicles. This was a slight decline of 1.8% from the same period last year and down by 2.7% compared to the previous quarter. The company's revenue for Q3 stood at ¥195 billion, marking a marginal decrease of 3% year-on-year (YoY) amid China's cutthroat domestic EV market that has affected profitability across several companies, including BYD itself.