BYD Reports A 632 Percent Jump In Q1 Profits Thanks To Increase Demand For EVs
The Shaanxi-based automotive company, BYD Auto Co, announced in its latest earnings call that its profits had jumped by more than 632 percent for the first quarter of the year. The Chinese company's massive net profit increase was reportedly due to the rapidly increasing demand for its fully-electric vehicles in its home country.
The electric vehicle manufacturing subsidiary of the BYD Company reported profits of around US$111.4 million for the first quarter of the year. This was a massive jump from the measly US$15.16 million it had generated a year ago. The company's poor performance last year was mainly due to the cuts to subsidies for electric vehicles during that time. According to the battery and electric vehicle manufacturer, it expects that it would generate at least US$220 million in half-year net profits, a sharp increase from the US$71 million it generated last year.
In its stock exchange filing, the company revealed that its new energy vehicles are selling quite well and it expects that trend to continue in the second quarter. The company also reiterated that it is continually seeing rapid growth in its electric vehicle sales, especially with the release of its new passenger and commercial electric vehicle models.
BYD has also gotten a big boost with its recent joint venture partnership with Germany's Daimler AG. The new brand, called Denza, was specifically established to produce luxury electric vehicles, which is still a largely untapped market in China. Apart from its electric vehicle lineup, BYD also produces electric bicycles, buses, rechargeable batteries, forklifts, and trucks. The company also has a wide range of plug-in hybrids and a number of petrol-powered passenger vehicles.
The company has continually been at the forefront of the emerging electric vehicle market in China, despite stiff competition and the country's continued subsidy cuts and regulatory action to improve standards and quality. China recently implemented stricter requirements for electric car manufacturers for them to qualify for government subsidies. These requirements have so far rooted out lesser companies, who have failed to meet the stricter standards.
In its report, the company revealed that it had sold 117,578 new vehicles in the first quarter of the year. Among the company's different models, its Tang-series electric vehicles are the most popular. BYD is hoping to sell around 650,000 vehicles before the year ends.
Demand for electric vehicles in China has been climbing at an unprecedented rate. Overall electric car sales in the country have so far jumped by 61.7 percent when compared to the previous year. According to China's Association of Automobile Manufacturers (CAAM), electric vehicle sales in the country will likely hit 1.6 million by the end of the year.