BYD Expects To Be Hit By China’s EV Subsidy Cut In First Half, But Future Still Bright

6 months ago by Mark Kane 1

BYD’s New Energy Vehicles

BYD’s first quarter profits fell within the forecasted range of 24-35%28.8%,  after plug-in vehicles sales fluctuated fairly wildly in the first three months in China; both with a 20% reduction in  subsidies and the gradual build up of new list of approved plug-ins to receive that subsidy.

BYD plug-in electric car sales in China – March 2017

Net profits are expected to fall by 20.3-31.4% (1.55 billion to 1.8 billion yuan / $261.10 million) in the first half, which would be the biggest drop since 2012 according to Reuters.

“BYD’s weakening net profits are a marked shift from massive profit growth over the last two years, annual net income increased more than 10-fold from 2014 to 2016, as demand for green cars boomed thanks to aggressive government support.”

Ultimately calming the situation going forward will be the normalization of subsidies, but even more so, several new plug-in offerings in BYD’s pipeline should bring growth back later this year, as well as new all-time records.

Among new upcoming BYD EVs are the Song (both in BEV and PHEV versions), a smaller compact SUV – the Yuan (PHEV), and new version of its larger SUV – the Tang 100 (with up to 100 km/62 miles of all-electric range). Next year a plug-in hybrid Song 7 (7-seat MPV) is also planned.

Update. According to Bloomberg, BYD’s net income in the first quarter amounted to $88 million.

Source: Reuters, Bloomberg

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One response to "BYD Expects To Be Hit By China’s EV Subsidy Cut In First Half, But Future Still Bright"

  1. Nada says:

    As much as I like BYD I think they have missed the mark on several auto fronts and most likely will permantly lose the China EV race to BAIC and others…

    They are focusing on plug in hybrids when China sales are predomaintly BEVs and have been moving that way more and more… Too much money and engineering time spent on making ICE, plugin hybrid (the day and reasoning for plugin hybrids has largely passed with cheaper batteries), and BEVs of the same model…

    Too much emphisis on speed and more luxury when China consumers for BEVs are voting with their wallets for cheaper BEVs that dont put up performance numbers…

    Only one high range BEV option for China consumers who are voting with their wallets for lower priced and lower range competior products…

    What happened to BYDs partnership with Mercedes and the Deneza brand and their sales that are pathetic? Did they miss the targeted audiences design and price mark that bad or did they piss off Mercedes who is just waiting out the end of the joint venture contract?

    That said BYD will still sell alot but I think they will be number 2 for now and might fall more as BEV competion ramps up…