BYD Shows Big Money To Be Made Making EVs – Profit Up 400%

AUG 31 2016 BY MARK KANE 35

BYD Qin

BYD Qin

Leading EV manufacturer of plug-in vehicles for China…and the world, BYD (it isn’t even a close race at home or globally) is now collecting the first fruits of its mass production strategy to bet heavy on electric vehicles.

In the first half of 2016, sales of conventional BYD cars decreased by over 8%.   But that didn’t stop the company from achieving its highest growth of revenues among independent carmakers in China – thanks to a more than 100% gain in plug-in sales over the same time.

Net profit increased 384% to 2.3 billion yuan ($344 million) out of 23.4 billion yuan revenues ($3.5 billion) – up 38%.

World’s Top 10 Plug-In Car Manufacturers – 2016 January-July (data source: EV Sales Blog)

No one builds EVs like BYD. Also of note: BYD’s  EV sales are currently up 100% this year…so no one will be catching them any time soon either.

Interesting is that the most revenue now comes via the sale of plug-in vehicles – 15.3 billion yuan’s worth ($2.3 billion). In the first half, BYD sold some 46,000 NEVs (plug-in vehicles), including about 43,000 cars.

The high profit margin BYD has discovered in NEVs soon could put BYD on the top of the pile for earnings amongst all automakers everywhere.

“Although BYD’s sales volume ranks bottom among the five self-independent brand giants, its profit ranks third among them. Following the current growth, we can predict that in the next four or five years, BYD will make the most money among self-independent auto companies.”

Now, who was it that said there was no profit to be found in electric vehicles?

source: ccfa.fr, Gasgoo

Categories: BYD, China

Tags:

Leave a Reply

35 Comments on "BYD Shows Big Money To Be Made Making EVs – Profit Up 400%"

newest oldest most voted

Make sure Bob Lutz (GM) and Sergio Marchionne (Fiat-Chrysler) reads this!

“Make sure Bob Lutz (GM)”

Bob Lutz hasn’t worked for GM for almost a decade now…

Get your info updated.

No, but he has made comments on the profitability of EVs.

Yes, and he was talking about mostly US market which is still true. As far as BYD goes, their profits are mostly from the Chinese government incentives. Selling Chinese Cars with Chinese cost at US price will provide a lot of profit in short term until the incentives goes away because people aren’t willing to pay US price in China for Chinese cars without those incentives. Now, do the math, 43,000 car x $8K each is exactly $344 million. how much do you think Chinese government incentives are for typical PEV in China? Easily more than $8K per car. So, that is your answer right there. Now, I am not critical of the EV incentives. I support them and think of them as a good thing. But I am just saying that BYD cars without those incentives wouldn’t be sold at those prices which means that they won’t be profitable because they would have to be sold at lower price or at lower volume. Both impact the profit margin. Now, maybe we would understand why GM build CT6 PHEV in China first. 1. it is cheaper. 2. It gets some incentives in China before it runs out.

An article I read on BYD mentioned a $35k EV with a $15k subsidy. Plus the buyer gets license plates immediately, with a gascar there’s a month (or more) wait.

MMF said:

“Bob Lutz hasn’t worked for GM for almost a decade now…”

Yeah, he’s currently Chairman for Via Motors.

But he’s certainly talking as if he’s still working for GM!

And it get’s better.

Two more electric BYD later this year.

“The BYD Song EV isn’t the only all electric SUV coming from BYD, the BYD Yuan EV with a 250 km range, will also arrive later this year.”

BYD is shifting from PHEV to BEVs.

There are a couple of BYD plug-ins that sound like they are better than their most similar counterparts being sold in the US today. So their sales success isn’t surprising.

Would like to read more about that, preferably from a neutral source… i.e., one not subject to Chinese censorship.

What’s been reported about the build quality of the BYD e6 is shockingly bad, and completely unacceptable for any first-world market.

The BYD e6? They sell those mostly for taxi’s now. Those are pretty old technology, and a tiny fraction of their total sales, and nearly none of their actual consumer sales. Their consumer cars have nothing in common with the old e6.

I thought BYD’s cars were overpriced for what they offered. I guess they’re priced at what the local market will bear, and helping to pay for future developments with their success.

Yes, those vehicles are sold at US market price and while their cost to make is with Chinese labor rate and Chinese corporate overhead… of course, profit is there.

Will BYD be the first auto maker to ditch convential powertrains and go full BEV??

They are a potential monster with the backing of their goverment especialy if they get their hands on some better battery tech…

No, that was tesla – if you’re talking about highway capable cars.

Will they, are they, the first to truly mass produce a bev?

I don’t think they need new battery tech just a bit better finish on their products and an export license.

I have bad wording…

Meant to say will they be the first maker of ICE powertrains to go full BEV…

At first (1995) BYD was a battery producer. They began making cars in 2005.

Yes but they made gas cars virst…

Facts don’t matter to RexxSee. He only loves speculation and conspiracy theory.

BYD was a battery maker and then joined in the explosive growth of Chinese automarket to make cars. But it wasn’t competitive at all. So, it decided to go after EV market which it has some advantages over other local ICE makers.

It is forced to do so in order to survive. Over time, it has gained some experience and are leading EV production in China due to its battery advantages over other EV makers.

BYD cars aren’t terrible but they aren’t good enough to compete against Geely or Cherry or other foreign car companies. So, it carved out a small niche in terms of EVs inside Chinese market. It will be decades before it can enter US and EU market. But it doesn’t need to since Chinese market is large enough for it to grow.

Warren Buffet isn’t stupid. That is why it dropped few hundreds of millions in BYD for a reason.

“Now, who was it that said there was no profit to be found in electric vehicles?”

—–

Pretty much every commenter here ,… because they believe the BS the established OEMs tell them.

LOOK AT THE TEAR DOWNS ON BEVs!
There is just not much there. No where near the complication that petrol vehicles have.

Common sense will tell you that a Chevy Bolt ought to be cheaper than a comparably equipped Chevy Trax.

That is the case if you don’t include R&D cost.

In the case of BYD or most Chinese maker, R&D is pretty much free since they are just rebadging of other designs..

Yes, that is why they can make a small profit.

Like I said, that is done on the back of Steep government incentives in China which pretty much paid for the profits.

43,000 cars at $10K each is $430 Millions. That is slightly more than what BYD made, no?

$10K each is about how much Chinese government put in each BYD sold if Not more.

So, take that away and I am not so sure BYD would be “profitable”.

A few years back I worked with a lot of ex-Toyota guys they total me that a regular car factory like the plant in Derby UK has a typical pay back of between 20 to 25 years and that it takes about 5 years and a $1 billion USD to get a new car model from concept to production. Clearly these are just rules of thumb but I think they are fairly realistic. The auto-industry is high volume, high capital and low margin. Now you don’t need a new factory to build an EV, nor even a new model but BYD has done both multiple times so the fact that they have turned a profit so early should really raise a lot of eyebrows. The whole incentives aspect is also a straw-man argument. Any auto-maker pretty much anywhere in the world would receive incentives in one form or other to build a new factory or even just for continuing to build cars in any given place. Lets face it greater and greater efficiency in pretty much every industry has lead to the world being increasingly short of jobs and governments increasingly desperate to fund projects that will lead to employment… Read more »

“A few years back I worked with a lot of ex-Toyota guys they total me that a regular car factory like the plant in Derby UK has a typical pay back of between 20 to 25 years and that it takes about 5 years and a $1 billion USD to get a new car model from concept to production.”

Yes, that is easily the case in the EU and US. Those plants are capable of cranking out 200K to 400K cars per year.

But the BYD plants are much smaller thus less capital intensive to start. Also, they use more labor than expensive robots due to cheaper Chinese labor.

Like I said, the profit per car is less than the incentives given per car, thus the profit is incentive dependent.

So smaller plants take less time to payoff? and are more profitable? Right?

None of your post makes a lot of sense. GM, tesla, Nissan, ford, fiat, etc. all recieve subsidies as do, I assume, many other Chinese car companies but right now BYD make more electric cars and make more money doing it than anyone else. That is impressive and, IMO, means byd have earned their place at the table.

“None of your post makes a lot of sense. GM, tesla, Nissan, ford, fiat, etc. all recieve subsidies as do, I assume”

But none of them sell volume of EVs in China.

None of them sell volumes of EVs in China at US price but with Chiense cost.

None of them sell volumes with low cost and high selling price with incentives included. in the Chinese market.

The fact remains that the profit that BYD generates almost match exactly what the incentives are per car.

Don’t be ridiculous. Bolt battery pack alone costs GM as much as a Trax.

60 kWh * 125$ = 7 500$….

That is a lot of cash, but it displace whole engine+gearbox.

So the actual difference is much less.

* For Telsa that would already be less then 6 000$, and they seam to aim at less then 60kWh for Model 3.

Bolt cell cost is $145/kWh for the next couple years. That’s straight from a corporate presentation. 60 * 145 = 8700, just in cells. The pack structure, cooling, wiring, etc. adds a couple grand so you’re at $11k total. Gascar manufacturing cost is ~50% of MSRP at GM, so a base Trax costs $11k to build.

Tesla recently said their pack cost is $190/kWh. Where do you get $125?

Carcus said:

“Common sense will tell you that a Chevy Bolt ought to be cheaper than a comparably equipped Chevy Trax.”

Common sense will tell you that makers of gasmobiles have had over a century to figure out how to produce them inexpensively. Contrariwise, the development of the modern EV started in 1990, with the Impact concept car, and its revolutionary inverter invented by Alan Cocconi.

When EVs using modern AC motors and inverters have been around a century or more, I’m sure they’ll be even more affordable than today’s gasmobiles.

“When EVs using modern AC motors and inverters have been around a century or more”

ah, the word modern is the key here.

AC motors and its controllers have been around for a century or more. Just like ICE.

But the fact you put a “modern” condition around requires it to be “recent”. Same applies to ICE which are “modern design”.

Low labor costs No taxes Etc: cheaper to build anything in China… But is the Quality there?

Most auto assemblies these days are so automated or at least tight process controlled that quality of build shouldn’t be an issue.

The question is that is the design and testing up to the same standard…

Build quality is certainly a big issue. Someone (Nix?) recently posted a comment suggesting newer BYD vehicles have improved quite a bit in quality. But here’s a comment about a BYD e6, from BYD’s test marketing of the car here in the USA just a few years ago: ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Vexar [post to InsideEVs] April 3, 2016 at 11:30 am I’ve driven the BYD electric sports utility vehicle (the e6) on a test track in the USA. It is roomy, the dashboard layout was extremely confusing, it had problems going 40mph, the sensor read-out was flickering with the numbers and on the far side of the car from me all the way over by the mirror, the drive mode control was non-intuitive (the park button was completely occluded by the directional lever and not marked), the stitching on the leather seats was loose enough to have wrinkles and quirks, and the exterior had an unexplained structural pipe about 8? long in the front left wheel well that nobody understood. The charge port was an unpolished cut-out in the plastic body panel, held on by a loop of flexible plastic and a friction clip. I am quite sure that it was not… Read more »

Yes, that was me.

The e6 is old news for BYD, and aren’t really relevant to their consumer sales anymore. E6’s were only about 10% of their sales out of the 61,722 plug-ins they sold last year. And those were mostly for taxi’s and ride sharing programs, not consumer sales. Here is what Green Car Reports said about them:

BYD continues to make both battery-electric vehicles (including the E6 hatchbacks used as taxis) and a variety of plug-in hybrids, including the newer Qin compact sedan and Tang compact SUV.

According to year-end figures released by the company, it delivered 31,898 Qins and 18,375 Tangs, along with 7,029 of the older e6, during 2015.”

http://www.greencarreports.com/news/1101883_who-sold-the-most-plug-in-electric-cars-in-2015-its-not-tesla-or-nissan

Bravo BYD. Please tell this news to every automaker.

“Now, who was it that said there was no profit to be found in electric vehicles?”

Um, Toyota… Volkswagen, not so long ago… recently Fiat, as I recall… Spyker…

Lots of them, really.

…what? Rhetorical question? Oh.

[Miss Emily Litella voice:] Nevermind! 😉