BYD First-Quarter Income Jumps on Demand for Electric Vehicles
BYD First-Quarter Income Jumps on Demand for Electric Vehicles
(Bloomberg) -- BYD Co., the Chinese electric vehicle and battery maker backed by Warren Buffett, said first-quarter profit surged, buoyed by demand for battery-powered cars as it weathered supply chain kinks from an ongoing semiconductor chip shortage to more expensive raw materials.
Net income rose 241% to 808.4 million yuan ($123 million) in the three months ended March 31 from a year earlier, the Shenzhen-based company said in a statement Wednesday. That was at the higher end of the 650 million to 950 million yuan preliminary profit announced last week. Sales increased 63% to 66.8 billion yuan.
“The sales volume of new energy vehicles of the Group also reached a record high, with market share continuing to increase, achieving rapid year-on-year growth, which led to a significant improvement in profitability and, to a certain extent, offset the profitability pressure brought by the rise in upstream raw material prices,” the company said in its preliminary first quarter earnings filing on April 19.
BYD’s diverse range of businesses has allowed it to weather a series of obstacles, from the chip shortage that has plagued the global auto industry, to Covid-19 outbreaks that have locked down several Chinese cities, and surging commodity prices. BYD raised car prices twice in the first quarter, citing the rising cost of raw materials.
BYD also ranks as the fourth-biggest EV battery maker, predominately producing cells for its own cars, but increasingly looking outward to snatch share from market leader Contemporary Amperex Technology Co. Ltd.
That breadth has helped BYD come through the supply-chain disruptions better than its peers, with monthly sales hitting new records, Bloomberg Intelligence analysts Steve Man and Joanna Chen noted prior to Wednesday’s numbers.
“BYD could snag a higher share of China’s burgeoning new-energy vehicle market as its refreshed battery-electric and hybrid lineups woo consumers with safer, cheaper blade batteries,” they said, referring to the slimmer cells BYD produces.
Founded in 1995, BYD has grown into one of China’s largest EV and battery producers, making early bets on the demand for cleaner-energy vehicles stimulated by government plans to reduce carbon emissions. The company’s share of new-energy vehicle sales reached 17.1% in 2021, according to China Association of Automobile Manufacturers data.
Last year, around 3 million new-energy vehicles, which includes plug-in hybrids, were sold in China and that’s expected to rise to 5.7 million units this year, according to BloombergNEF.
BYD earlier this month said it has stopped producing cars entirely powered by fossil fuels.
©2022 Bloomberg L.P.
