Chinese EV maker BYD posted record third-quarter earnings, its highest ever for any quarter, as the electric vehicle giant preserved its domestic market leadership despite weaker demand and stiff competition, according to the latest Reuters report.
Net profit for the third quarter reached 10.41 billion yuan ($1.42 billion), an 82.2% increase from a year earlier, on a 38.5% rise in revenue to 162.2 billion yuan, BYD said in a market filing.
Last year, BYD dethroned Tesla as the world’s biggest seller of electric vehicles, counting both full-electric and plug-in hybrid vehicles. Now, however, BYD is neck and neck with Elon Musk’s company for the number of fully electric vehicles (EVs) sold as the Chinese company ramps up both production and sales. In the third quarter ending in September, BYD sold over 431,000 full-electric cars, just a few thousand behind Tesla’s 435,000.
BYD is also catching up to its American rival not only in terms of sales volume but also in terms of how much profit each company makes per vehicle sold. In the third quarter of this year, BYD sold over 2.08 million NEVs (which includes both full-electric and plug-in hybrids). Dividing BYD’s net profit for the same period by its sales indicates that the company made about 10,300 yuan ($1,730) per vehicle sold. That’s a notable increase from the third quarter of 2022 when BYD averaged under $1,470 of profit per car sold.
While BYD has increased its profit margin on each vehicle delivered to customers, Tesla’s profit per vehicle is decreasing. Dividing its third-quarter sales by its net profit over the same period, Tesla averaged around $4,260 in profit per car sold. That’s 55% down from over $9,500 in the third quarter of 2022.
To be sure, Tesla still earns more money per car sold than any other global competitor, in fact, 8 times as much profit on each car compared to Toyota. But BYD is gathering strong momentum thanks to its record quarterly profits. The key advantage BYD has over other automakers is that it has very little dependency on other suppliers to provide them with parts.
The automaker develops everything from batteries to semiconductors, and other key components on its own. And since the company continues developing its vertically integrated supply chain from the mining of minerals to even the shipping of vehicles, it will be looking to lower its production costs and raise its profit margins even more.
A computer animation professional with over 23 years of industry experience having served in leading organizations, TV channels & production facilities in Pakistan. An avid car enthusiast and petrolhead with an affection to deliver quality content to help shape opinions. Formerly written for PakWheels as well as major publications including Dawn. Founder of CarSpiritPK.com