BYD, one of China’s leading electric vehicle manufacturers, saw its Hong Kong-listed shares tumble nearly 8% on Monday after reporting a significant decline in second-quarter profit amid an escalating price war in the domestic EV market.
According to data from LSEG, the Tesla rival posted a net profit of 6.36 billion yuan (around $891 million) for the April-June quarter, marking a 30% decrease compared to the same period last year. Despite this, the company’s revenue rose 14% year-over-year to approximately 201 billion yuan, supported by growing international sales.
In its mid-year earnings report, BYD warned that “increased price competition and frequent excessive marketing” within China’s EV sector have negatively impacted the industry’s development.
Industry data from Autohome Research Institute, cited by Nomura, shows that retail car prices in China have dropped about 19% over the past two years, falling to an average of 165,000 yuan (around $22,900). Concerned about market distortions, Chinese authorities warned in May that automakers could face penalties for aggressive price-cutting practices.
Despite weaker quarterly profits, BYD’s net profit for the first half of the year rose nearly 14% to 15.5 billion yuan. First-half revenue climbed 23% to 371.3 billion yuan, driven by record-breaking sales of new energy vehicles.
To counter fierce domestic competition, Chinese automakers, led by BYD, have accelerated their global expansion strategy. BYD has opened showrooms across Europe and launched competitively priced models over the past two years. In July, the company recorded more than 13,000 new registrations in Europe, representing a 225% year-on-year increase, according to the European Automobile Manufacturers Association.
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