BYD Earnings Drop 89% as China’s Electric-Car Market Goes Sour

(Bloomberg) -- BYD Co., China’s biggest maker of new energy vehicles, reported a 89% slump in quarterly net income as slowing demand in the world’s largest car market continues to erode its bottom line.

• The Shenzhen-based automaker posted a 9.1% decline in revenue for the three months through September, the company said in a statement to the stock exchange. Net income was 119.7 million yuan ($16.9 million).

Key Insights

• Sales of all-electric, fuel-cell, and plugin hybrid vehicles have been falling for three consecutive months after the government scaled back subsidies. Sales of such vehicles dropped by 34% last month, according to the China Association of Automobile Manufacturers. BYD’s September car sales fell 15%.
• To counter sluggish demand and broaden its revenue sources, the carmaker backed by Warren Buffett is seeking to expand sales of its batteries. It is also considering an initial public offering for a unit that makes a power-management device that is produced by just a handful of companies globally, people familiar with the plan said last month.
• BYD said earlier this month that the company is entitled to 3.16 billion yuan of government subsidies for new energy vehicle sales that occurred in 2017.

Market Reaction

• BYD has lost 21% this year in Hong Kong compared with a 3.6% gain by the Hang Seng Index.

Get More

• BYD Third Quarter Net Income Growth -89%

--With assistance from Rebecca Choong Wilkins.

To contact the reporter on this story: Tian Ying in Beijing at ytian@bloomberg.net

To contact the editors responsible for this story: Young-Sam Cho at ycho2@bloomberg.net, Gregory Turk, Will Davies

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