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China’s biggest electric vehicle maker reported an almost 33% increase in net profit Wednesday, although its margins lagged behind as competition in the world’s largest auto market remains tough.
BYD BYDDY+3.76% on Wednesday said it had net income of about $1.27 billion during its second quarter, its highest ever recorded, bar its showing in the third quarter of 2023, according to a new stock exchange filing. Revenue for the April to June quarter was up almost 26% year-over-year, at $24.7 billion.
BYD has thrived in the electric vehicle and plug-in hybrid vehicle sector of the auto industry thanks to its vertical integration strategy, reliance on in-house component production, and massive network.
The company delivered 426,039 fully electric vehicles in the second quarter, up 21% from a year earlier, and a record 986,720 new-energy vehicles overall, marking a 40% year-over-year increase. Tesla TSLA-0.55%, its biggest rival, sold 443,956 EVs last quarter, maintaining its spot as the biggest EV seller by quarter, a title it briefly lost to BYD last year.
BYD’s gross margin for the second quarter was 18.7%, about flat compared to a year earlier but down 3% from the prior three month period. The automaker has been offering aggressive discounts on some of its best-selling EVs, while some buyers have also benefitted from a new trade-in program and other opportunities.
BYD is also making major moves to expand overseas. Executive Vice President Stella Li on Tuesday told Bloomberg News that “nearly half” of sales will come from overseas in the future. The company is currently on track to reach 500,000 overseas sales this year.
BYD recently disclosed it had hired lobbyists to advise on entering the country’s market and met with Canadian dealers about setting up local dealerships, according to Automotive News. China’s biggest EV maker has expanded into dozens of countries in recent years and is building factories in Turkey, Hungary, and Brazil, and has committed to making a plant in Indonesia. It also has a factory in Thailand.
BYD’s general director of Mexico, Jorge Vallejo, told Reuters last week that the company has narrowed its list of possible locations for a Mexican factory to three states, each of which has offered “many benefits.” The company is already selling some cars in Mexico, although Li, who oversees BYD’s American operations, has said it has no plans to sell passenger EVs in the U.S.
The automaker is also working with Uber to put its drivers in some 100,000 new EVs. The firms will also work together on deploying vehicles capable of self-driving on Uber’s UBER+0.76% platform, noting that they are “well-positioned to bring autonomous vehicle technology” to a global audience.