BYD reported an increase in net profit for the last quarter of 2023, overtaking Elon Musk’s Tesla as the world’s largest quarterly electric vehicle seller. The Shenzhen-based car manufacturer increased its net profit by 19%, reaching 1.20 billion dollars.
BYD dethrones Elon Musk’s Tesla: Becomes the world’s largest electric vehicle manufacturer
The revenue rose by 15% to 24.9 billion dollars. BYD’s net profit for the whole year increased by 81%, amounting to 4.2 billion dollars, and gross profit margins rose from 17% last year to 20%. BYD’s fourth-quarter sales volume increased by 38%; the company sold more than 526 thousand electric vehicles, outperforming Tesla by 80 thousand units.
Backed by Warren Buffett, BYD manufactured more vehicles for the second consecutive year, producing 3 million new energy vehicles (NEV) which include both hybrids and battery-electric vehicles. Most of BYD’s vehicles are sold at a lower price range than Tesla’s and are available as either hybrid vehicles or purely electric cars.
Although Elon Musk had previously openly ridiculed BYD’s vehicles, he recently acknowledged BYD’s growing threat in the electric vehicle market. In January, Musk said, “If trade barriers are not erected, they are going to crush almost every other car company in the world.” However, BYD’s fourth-quarter profit fell to 1.44 billion dollars compared to the previous three-month period.
BYD initiated and intensified the price war in China by repeatedly cutting prices and introducing new vehicles. Last year, the company added many models to global markets. In March last year, BYD launched three pure electric models in Mexico. China’s car industry reported an average profit margin of 5% last year.
BYD sold its products in over 50 countries last year and said it ranked “first in many countries” in NEV sales. The company exported more than 242 thousand units last year. BYD plans to build a new factory in Hungary and has already delivered to its first group of electric car customers there.
Furthermore, BYD is planning to invest 620 million dollars in reviving a former Ford Motor Co. production center in Brazil to boost its profile in South America. BYD, continuing its global expansion, said China’s NEV market is expected to grow strongly in 2024.
The company stated it will continue its multi-brand strategy and global expansion efforts. BYD’s success is backed by generous subsidies from Beijing. What are your thoughts on this rapid rise? Write your opinions in the comments section below.
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