BYD profit jumps as aggressive overseas push bolsters sales

BYD, now the world’s largest EV maker, sold a total of 2.15 million vehicles

BYD Co.’s profit jumped 14% in the first half on robust demand for its electric vehicles and an aggressive expansion into international markets as it seeks to shake off headwinds at home.

Net income totaled 15.5 billion yuan ($2.2 billion) in the six months ended June 30, the carmaker said in a filing on Friday. Revenue climbed 23% to 371.3 billion yuan, it said.

BYD’s strong start to the year now gives way to a more challenging second half. The carmaker’s deep discounting in late May put it at the center of an industry reckoning as Beijing seeks to stamp out the relentless price cuts they fear will undermine brand value and put financial pressure on even well-capitalized firms.

So far, the campaign has seen limited effect, with top auto brands, including BYD, keeping discounts intact, deepening them, or only slightly reducing them in July. But it’s put the sector on notice and left carmakers trying to hit their annual sales target without one of the most potent weapons in their arsenal.

BYD, now the world’s largest EV maker, sold a total of 2.15 million vehicles — including both battery-electric models and plug-in hybrids — in the first half, up 33% from a year earlier. That’s less than half of its annual target of 5.5 million units.

The carmaker also saw a notable shift in the domestic market in the second quarter. While battery EVs continued to show strong growth, sales of hybrids contracted from a year earlier. That’s made BYD’s international push increasingly important. The company’s Thai unit exported EVs to Europe for the first time, including to the UK, Germany and Belgium, according to Xinhua.

Despite BYD’s challenges, analysts are bullish on the company’s outlook.

Softer sales numbers in July were due to weaker domestic demand in the summer low season, BYD’s prioritizing the normalization of channel inventories, as well as stricter pricing discipline, HSBC analysts led by Yuqian Ding wrote in a note. These actions, while putting temporary pressure on sales volumes, are expected to have long-term benefits and support more sustainable margin expansion ahead, they wrote.