Despite the slowdown in July, BYD remains at its lead in China’s competitive EV market.
Anna Barclay | Getty Images News | Getty Images
Hong Kong’s listed stocks slid nearly 8% on Monday after Chinese electric car makers reported a sharp decline in quarterly profit amid an aggressive price war across the domestic industry.
Tesla’s rival on Friday reported net profit of 6.36 billion yuan ($891 million) for the April-June quarter, according to LSEG data.
The result was due to increased overseas sales, which led to the company’s revenues increasing by 14% year-on-year to approximately 20 billion yuan.
BYD’s profitability was harmed by yet another discount war breakout in China last quarter.
The company said that “increased price competition and frequent occurrences of excessive marketing” in China’s EV space “had a negative impact on the development of the industry” and “increased price competition and frequent occurrences of excessive marketing” have been submitted.
Citing industry data from the Autohome Research Institute, a recent Nomura report shows that retail car prices in China have fallen by about 19% over the past two years, to around 165,000 yuan ($22,900), according to a recent Nomura report.
In May, tired of unfair competition, Chinese authorities warned carmakers would punish them for promoting price cuts.
BYD’s net profit in the first half reached 15.5 billion yuan, up nearly 14%. The company’s first half revenue rose from around 23% to 371.3 billion yuan, with sales of new energy vehicles reaching record highs.
Chinese automakers, including BYD, are expanding into new markets worldwide amidst fierce domestic competition. BYD led its charging, opening a showroom in Europe and launching cars at competitive prices over the past two years.
According to the European Association of Auto Manufacturers, BYD recorded more than 13,000 new registrations on the continent, up 225% per year in July.
