BYD earnings fall as EV demand slows

LOOKING at the sales success of newcomer BYD Down Under and you could be forgiven for thinking the Chinese electric vehicle manufacturer is on a roll.

Locally, BYD sold 1310 units in January compared with  1107 from Tesla.

The Chinese importer registered 589 examples of its Seal sedan, 465 Atto 3 SUVs and 256 Dolphin hatch models against US-based Tesla’s 723 Model 3 sedans and 384 Model Y SUVs.

Yet, despite outselling Tesla in Australia over January, the manufacturer is reported to be falling well short of its earnings estimates globally, down 2.5 billion yuan ($A540m) in its latest stock exchange filing as demand for battery electric vehicles softens.

While BYD’s preliminary 2023 net income rose 75 per cent on the previous year – to between 29 and 31 billion yuan ($A6.3 and $A6.7b) – the numbers are reported to be short of  analyst’s average  estimates.

Further, BYD shares have fallen by an average of 4.0 per cent, extending losses over the past 12 months to approximately 37 per cent.

Globally, and in the final quarter of 2023, BYD sold 526,409 battery electric vehicles, surpassing Tesla for the first time as the largest seller of BEVs. It is a spike driven mainly by a broader range offering, particularly of cheaper models like the e6 and Dolphin.

BYD has been in something of a price war both in its home market and others as it pushes to gain market share. Heavy discounting of its models aims to keep it abreast of annual sales targets but come at the cost of overall earnings.

It is also reported that geopolitical tensions are taking a toll on the Chinese manufacturer.

According to Automotive News China, BYD is one of three manufacturers selected for further scrutiny in the European Commission’s anti-subsidy investigation to determine whether state support from the Chinese government has given the manufacturers an unfair advantage.

In its home market, BYD overtook Volkswagen Group as China’s best-selling car brand in 2023.

BYD registrations in China rose to 2.4 million last year, data from the China Automotive Technology and Research Centre showing it now holds an 11.0 per cent overall market share, a year-on-year increase of 3.2 per cent.

Overall battery electric and hybrid vehicle sales in China are expected to increase by as much as 25 per cent (to 11 million units) over the coming 12 months, giving BYD a more fortuitous outlook in the year ahead.

Analysts predict BYD will become a top 10 manufacturer on the global stage by this time next year, assuming it exceeds the more than three million vehicles it produced in 2023.

Locally, the all-electric BYD range includes the e6 (from $39,999 plus on-road costs), Dolphin (from $38,890 + ORC), Seal (from $49,888 + ORC), and Atto 3 (from $48,011 + ORC).