BYD’s third-quarter revenue totaled 201 billion yuan (about 26 billion euros), surpassing the 25.2 billion dollars (23.2 billion euros) in sales that Tesla reported last week.
The Chinese car maker sold a record 1.1 million cars between July and September, boosted by new subsidies granted by the Chinese government for the purchase of electric vehicles.
The 24% increase in sales was, however, achieved at the expense of a drop in BYD’s gross margins, from 22.1% last year to 21.9% in the third quarter. Net profit was 11.6 billion yuan (1.5 billion euros), an increase of 11.5% year-on-year.
Rather than offering discounts directly, BYD has in recent months launched higher-end models equipped with more advanced features at lower prices than older versions.
This strategy helped BYD consolidate its leadership in the market, at a time of fierce competition, but brought down the group’s net profit per vehicle, according to analysts.
The price war in the world’s biggest car market is hurting the profit margins of Chinese brands and foreign car makers.
Due to a high level of vertical integration, including control over the production of batteries and semiconductor chips, BYD’s gross margin of 21.9% is still far ahead of Tesla’s 17% and Chinese rivals Zeekr’s 14%. .2%, and Xpeng, with 6.4%.
Analysts have argued that overseas expansion will be key to BYD’s future growth, in a context of growing Western protectionism.
On Tuesday, the European Union (EU) decided to impose additional customs duties of 17% on BYD’s electric vehicle imports, on top of the existing 10% duties.
Although BYD recently opened a factory in Thailand – its first production base outside of China – overseas sales accounted for just 7.9% of total monthly sales in September, up from 9.8% a year earlier.
*With Lusa
