Chinese EV giant BYD reported the kind of yearly results most firms dream about on Monday.
What does this mean?
BYD bid farewell to combustion-engine vehicles last April, and shifted gears to focus solely on fully electric and plug-in hybrids – a move that’s paid off handsomely for the auto behemoth. The firm’s in-house production of key components, like chips and batteries, let it cruise past the supply chain disruptions and Covid-induced issues that plagued competitors, selling nearly 2 million cars in 2022 – over four times more than the previous four years combined. No wonder the firm’s finances look so healthy: net profit's expected to come in as high as $2.5 billion, up a staggering 458% from the previous year. And it looks like the good times are set to roll on too: the company’s eyeing up a move into the luxury car market, where profit margins tend to be much higher.
Why should I care?
Zooming in: Supply-chain superstar.
Tesla might have a 400,000-car lead in the fully-electric car market, but BYD’s top-selling models are heating up at home – while Tesla’s Model 3 saw a chilling dip. What’s more, the Chinese EV giant’s making a bold push into overseas markets, and has ordered a fleet of car carriers to ensure delivery and take further control of its own supply chain. And on top of its own products, the firm might even offer to transport other manufacturers' vehicles too.
The bigger picture: The throne’s secure.
Sure, BYD's impressive, but it’s got some catching up to do to beat Toyota. The Japanese car giant held onto its title as the world's biggest automaker for the third year in a row in 2022, selling a show-stopping 10.5 million cars. Granted, that was down 0.1% from the previous year, but it's still way better than its closest competitor Volkswagen – which had its lowest sales in over ten years.
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