BYD posts 11-fold jump in Q4 profit -filing

© Reuters. FILE PHOTO: A BYD Seal electric vehicle (EV) is displayed at a car dealership in Shanghai, China, February 3, 2023. REUTERS/Aly Song

SHANGHAI/BEIJING (Reuters) -Chinese electric vehicle giant BYD Co (OTC:) Ltd reported an 11-fold increase in fourth-quarter profit as it extended its lead in the domestic market with a wide range of products.    Net profit for October-December came in at 7.3 billion yuan ($1.06 billion) versus 602 million yuan a year earlier.    For the whole of 2022, net profit increased 446% to 16.6 billion yuan, said the company, which is 12% owned by Warren Buffett’s Berkshire Hathaway (NYSE:).

The gross profit margin for automobiles and their related products, which accounted for 77% of BYD’s total revenue in 2022, increased to 20.4%, largely improved from 3.7% in 2021.

Bolstered by its Dynasty and Ocean series of plug-in hybrids and pure electric cars, BYD appears set to overtake Volkswagen (ETR:), which was the best-selling passenger car brand in China last year. BYD, however, took that crown in February for the second month in four.

BYD has also surged past Tesla (NASDAQ:) Inc in China EV sales, accounting for 41% of so-called new energy car sales in the world’s biggest auto market for the first two months of the year. Tesla, by contrast, accounted for 8%.

Amid weakening demand, BYD also offered discounts for its Song Plus and Seal EVs in March, joining many other domestic Chinese automakers in a price war that Tesla started.

Despite challenges of shrinking demand in 2023, BYD said in the annual report that it expects new energy vehicle sales to continue strong growth momentum and its penetration rate to largely increase.

The company will introduce more competitive products and further improve delivery capability to meet market demand, it said.

But the Chinese EV giant has been slowing output since the start of the year when industry-wide sales began to slow and China ended a national subsidy programme for EVs and plug-in electric vehicles.

It has reduced shifts at two auto assembly plants in Shenzhen and Xian in China making its top-selling models including the Song and Qin EVs, Reuters reported last week.

BYD’s EVs are powered by its self-developed and manufactured lithium batteries known as Blade Battery, which use less expensive but more stable iron phosphate than nickel and cobalt-based batteries. Its battery installation volume ranked the second globally in Janaury with 17.6% market share, exceeding LG Energy Solutions, according to SNE Research.

($1 = 6.8756 renminbi)