China Electric Vehicle Leader BYD Reports 29% Drop In 1st Half Profit Amid Rising Costs

Net profit in the first six months of the year at BYD, China’s biggest maker of electric vehicles, fell by 29% to 1.17 billion yuan, or $180 million, amid rising material costs, the company reported in a filing Friday evening.  Revenue at the Warren Buffet-backed business increased by 53.6% to 89.1 billion yuan. (Click here for announcement.)

China electric vehicle makers have won the attention of global stock investors in the past three years in part through hugely successful U.S. IPOs by upstarts Nio, XPeng and Li Auto. They’ve all as much as doubled since listing owing to growth in China’s auto market, the world’s largest, amid growing industry chip shortages.

BYD outsells those younger rivals. Chairman Wang Chuanfu, worth $23.6 billion on the Forbes Real-Time Billionaires List today, has said he expects by 2030 new energy vehicle sales will account for 70% of the Chinese market.

China, the world’s No. 2 economy, accounted for nearly a third of all motor vehicles produced worldwide last year, up from just 13% in 2008, according to Statista.  It’s also the leader in electric vehicle sales that grew by 40% globally in 2020 to 3 million vehicles, compared with a 15% drop in overall sales amid the pandemic, according to the International Energy Agency. This year, auto purchases will fall to 69.8 million, down from their 2017 peak of 80 million, Statista says.

BYD’s Hong Kong-trade shares have soared 240% in the past 12 months.

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@rflannerychina