BYD net profit soar 446% in 2022 on robust electric vehicle sales

Powered by robust sales of its electric vehicles, BYD posted a record profit of RMB 16.6 billion ($2.4 billion) in 2022, more than five times higher than the previous year.

The Warren Buffett-backed automaker saw revenue of RMB 424 billion, up nearly 100% from RMB 216 billion in 2021, as it controlled about a third of the Chinese electric passenger car market.

The gross profit margin for cars and related products, which made up 77% of BYD’s revenue in 2022, rose to 20.4%, a significant improvement from the 3.7% margin in the previous year.

Sales growth of more than 80% is still anticipated for the first quarter, according to BYD, a significant rival of Tesla (TSLA) in China. BYD managed to achieve the growth despite a heated EV price war that has been going on since January.

“The pricing war is unavoidable at this point as there are more EVs on the market than the demand, according to Wang Chuanfu, founder, chairman, and president of the Chinese automaker. He said that this has happened in the past in other sectors like mobile phones and electric appliances. Some players will be eliminated, while others will increase their market share.

BYD accounted for 41% of so-called new energy car sales in China for the first two months of the year. Tesla, by contrast, had an 8% share.

Most BYD vehicles cost less than 200,000 yuan (US$29,054), as opposed to so-called smart EVs, which cost roughly 300,000 yuan. Sales of its all-electric and plug-in hybrid vehicles began to increase in the second quarter of last year as more middle-class Chinese consumers turned away from more expensive models made by Tesla and its mainland Chinese competitors like Xpeng, Li Auto, and Nio.