China EV Giant BYD Posts Higher First-Half Profit as Sales Rise Despite Slowing Demand — Update

By Jiahui Huang

BYD's first-half net profit rose due to higher electric-vehicle sales and a stronger handset-components and assembly business despite weak demand in the world's largest auto market.

The Chinese EV giant said Wednesday that its net profit climbed 24% to 13.63 billion yuan, equivalent to $1.91 billion, in the first half of 2024 from a year earlier.

Its revenue rose 16% to 301.13 billion yuan, driven by robust sales of its EV models despite slowing Chinese auto demand.

Both measures missed consensus estimates by data provider Visible Alpha. Analysts had expected the company to post net profit of 15.35 billion yuan on 331.03 billion yuan in revenue.

Revenue from the company's main automobile business rose 9.3% to 228.32 billion yuan, while revenue from handset components, assembly service and other products jumped 42% to 72.78 billion yuan.

BYD said its gross profit margin increased to 20.0% from 18.3% a year earlier, thanks to the stronger EV business. The company is one of the few Chinese EV makers that have reported double-digit gross margins. Li Auto reported a gross margin of 19.5% for the second quarter, while EV leader Tesla posted an automotive gross margin of 14.6%.

The company delivered 426,039 fully electric vehicles in the second quarter, up 21% from a year earlier. Rival Tesla sold 443,956 units during the period, maintaining its position as the world's top EV seller. The Chinese automaker briefly overtook Tesla in battery EV sales in the fourth quarter last year.

BYD and other major Chinese EV makers have been aggressively expanding overseas amid a continuing price war in a crowded home market and increased tariff pressure from major trade partners.

The company on Wednesday said it will accelerate localized manufacturing, after the European Union finalized additional tariffs on imported China-made EVs this month, with BYD facing extra duties of 17%, compared with 9% for Tesla.

At the same time, BYD has continued to boost its research-and-development investment to better compete with other Chinese automakers in the fast-growing field of autonomous driving. Its R&D expenses rose 42% to 19.62 billion yuan in the first half.

On Tuesday, the Shenzhen-based company said it will collaborate with Chinese tech titan Huawei on self-driving technology. Its premium brand, Fangchengbao, will use Huawei's advanced autonomous-driving system for the Bao 8 SUV, which is set to launch later this year.

Write to Jiahui Huang at jiahui.huang@wsj.com

(END) Dow Jones Newswires

August 28, 2024 08:22 ET (12:22 GMT)

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