Tesla’s main China competitor BYD has weathered supply disruptions as well as domestic and foreign rivals to achieve 350% year-over-year earnings growth, underscoring its rapid rise of one of China’s most formidable industrial conglomerates.
The Warren Buffett-backed group’s Q3 net profit of Rmb 5.7 billion ($786 million) broke the previous record of Rmb 2.8 billion set in the second quarter of this year. Results come like BYD mounts a campaign to reach European car manufacturers on their home turf.
Biggest three-month sales in the world tram manufacturers hit Rs 1.17.1 billion, up 116% year-on-year, a filing on the Hong Kong stock exchange showed on Friday.
Discount By BYD “New energy” passenger vehicles, which include hybrids, pure batteries and hydrogen-powered models, also hit a record high of 538,704 units in the July-September quarter, up 194% from a year. before. Last month, the Chinese homegrown brand announced that it would start selling three new models in Europe later this year.
BYD started operations in the mid-1990s, with the founder Wang Chuanfu successfully scored made batteries for early cell phones. The former professor ventured into the auto business two decades ago after buying a failing state-owned auto corporation and rocket maker. His electric car ambitions have drawn Buffett’s Berkshire Hathaway as a major investor.
BYD is now among Chinese companies posing an existential challenge to electric vehicle industry leader Tesla and incumbent auto giants as the world transitions to electric vehicles. The Shenzhen-based company is very self-sufficient, controlling the local supply chain of minerals and batteries as well as computer chips and other electronics. Rival Tesla is one of its battery customers.
While many Chinese businesses face uncertainty stemming from Xi Jinping’s Reaffirmation of Communist Party control, BYD is seen as aligned with national security priorities of energy and technology independence.
According to the China Association of Automobile Manufacturers, China’s sales of new energy cars increased 94 percent year-on-year to 708,000 units in September. BYD dominated the market with a 30 percent share in sales. year to September, 21 percentage points ahead of its next competitor, SAIC-GM-Wuling.
Neil Beveridge, a Bernstein analyst in Hong Kong, said China accounts for about 7 in every 10 electric vehicles sold globally. Beijing has set a target of EVs accounting for 25% of new car sales by 2025, but the country is on track to reach 35% next year and half of sales in three years.
Beveridge said growth was not only driven by affordable vehicles and deep government support, but also by China’s early rollout of low-cost electricity and charging infrastructure.
“While China is taking the lead, the question is whether the rest of the world can catch up,” he added.