BYD reported an increase in net profit for the final quarter of 2023 as it dethroned Elon Musk’s Tesla to become the top quarterly seller of electric vehicles in the world.
The Shenzhen, China-based carmaker saw net profit increase 19% year-over-year during the last three months of the year, reaching 8.67 billion ($1.20 billion). Revenue grew 15% to 180.04 billion yuan ($24.9 billion). For the full year, BYD’s net profit climbed 81% to 30 billion yuan ($4.2 billion) and gross profit margins jumped to 20% from 17% compared to a year prior.
Sales volume for the forurth quarter grew 38%, as the company sold more than 526,000 EVs, nearly 80,000 more than Tesla.
Warren Buffett-backed BYD also made more cars than Tesla for the second year in a row, producing 3 million new energy vehicles to Tesla’s 1.84 million. Plus, most of BYD’s cars sell at a lower price range than Tesla’s and can be purchased as hybrid vehicles or fully electric vehicles.
Despite past mockery — including outright insulting BYD’s vehicles — Musk has recently acknowledged the growing threat of BYD in the EV market.
“Frankly, if there are not trade barriers established, they will pretty much demolish most other car companies in the world,” Musk said in January.
However, BYD’s profit in the fourth quarter slipped from from 10.41 billion yuan ($1.44 billion) in the previous three month period as competition hardened in the Chinese market. Competition has only grown fiercer in recent months, as EV makers restart last summer’s price war and offer greater incentives and slash price tags to lure customers.
China’s auto industry recorded an average profit margin of 5% last year, compared with 5.7% in 2022, according to data from the Chinese Passenger Car Association.
“We believe price competition will persist in 2024 and will spur [manufacturers] to expand their cost-cutting efforts [in China],” Morgan Stanley analyst Adam Jonas wrote in a note to investors earlier this month.