Chart of the Day: Price War Takes Toll on BYD’s Profits
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China’s aggressive price war has finally taken a toll on BYD Co. Ltd., as the country’s top electric-car firm reported its first quarterly profit decline in more than three years.
The Shenzhen-based carmaker reported a net profit of 6.36 billion yuan ($891 million) for the June quarter, down nearly 30% from a year earlier, according to data compiled by financial information provider iFinD. In the same period, revenue grew 14% to 200.92 billion yuan.
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- BYD’s Q2 2024 net profit fell nearly 30% to 6.36 billion yuan amid China’s EV price war, despite 14% revenue growth.
- Domestic vehicle sales dropped for three consecutive months, but overseas sales surged 133% to 545,000 units in the first seven months.
- Gross profit margin shrank to 16.3%, and operating profit margin hit a five-year low of 1.4%, with higher costs due to adding self-driving tech to cheaper models.
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Who’s Who
- BYD Co. Ltd.
- BYD Co. Ltd., China's top electric-car firm, reported its first quarterly profit decline in over three years, with net profit down nearly 30% to 6.36 billion yuan. This "aggressive" price war and the inclusion of limited self-driving capabilities in affordable models contributed to the decline. Despite this, its overseas sales surged, and future improvements in technology could cement its dominant position.
- Sinolink Securities Co. Ltd.
- Sinolink Securities Co. Ltd. is a financial firm whose analysts commented on BYD Co. Ltd.'s financial performance. They attributed BYD's quarterly profit drop to the inclusion of limited self-driving capabilities in more affordable models, which increased costs. However, they also suggested that improvements in battery and self-driving technology could help BYD maintain its market dominance.
- Nomura Holdings Inc.
- Analysts at Nomura Holdings Inc. stated that public concerns over smart car technology, fueled by a series of traffic accidents, have undermined BYD's strategy of expanding access to smart driving tech. They also projected that while BYD's sales should recover, the government's push to curb the price war would restrict BYD's pricing advantage.
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What Happened When
- Third quarter of 2022：
- BYD's gross profit margin was at its previous lowest level before hitting a new low in June 2025.
- 2023：
- BYD actively participated in the price war by cutting prices.
- Early 2025：
- BYD decided to include limited self-driving capabilities in more affordable models, increasing costs.
- May 2025：
- BYD cut prices, offering up to 53,000 yuan discounts on 22 models equipped with assisted driving systems.
- May 2025 to July 2025：
- BYD's domestic vehicle sales declined for three consecutive months, from 293,429 vehicles in May to 263,559 in July.
- June 2025：
- BYD and several other major carmakers pledged to pay all suppliers within 60 days to support supply chain stability.
- First half of 2025：
- BYD reported a 50.5% increase in overseas revenue to 135.36 billion yuan.
- June quarter of 2025：
- BYD reported a net profit decline (6.36 billion yuan), the first quarterly profit drop in over three years.
- First seven months of 2025：
- BYD achieved 45% of its global 2025 sales target and sold about 545,000 vehicles abroad.
AI generated, for reference only
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