BYD’s Past Plug-In Sales Means It Has 290,000 Credits, Worth $440 Million

1 month ago by Mark Kane 7

BYD Song EV300

BYD is a big winner with the upcoming New Energy Vehicle (AKA plug-in vehicle) quota and credit system in China, while at the same time, will hit many foreign manufacturers with low EV sales already operating in the region hard.

BYD plug-in electric car sales in China (estimated) – through August 2017

The Chinese company has well outsold any other manufacturers (96,000 last year according to Nikkei), and has already amassed more than 290,000 credits worth $440 million (at more than $1,500 a pop).

Those credits will be especially valuable to BYD when the quota system is first enforced in 2019 – with requirements to have credits covering 10% of light vehicle sales (olug-ins can range from one to several credits depending on their abilities).

As with the ZEV system in California, for those automakers who are unable to sell enough plug-ins, and thus secure required credits, will need to look to those other OEMs with excess inventory – enter BYD one suspects.

As a  result, BYD’s stock prices have surged as the company continues to sell 5-digits worth of EVs each month in China, and in three years time, those credits could add billions of dollars of additional revenues – most of which goes straight to the bottom line.

“BYD’s stock rose to HK$83.7 on Oct. 9 from around HK$50 in the earlier half of September. It currently hovers around the upper HK$70s level, making U.S. investor Warren Buffett’s 2008 bet on the relatively unknown company look like a stroke of genius.”

On the flip-side, it’s not so much good news for most manufacturers from Europe, U.S., Japan and South Korea, because their competitiveness will again decrease.   Although anyone who has been watching the market, knew this day was coming, and that China was going to be ground-zero for volume plug-in vehicle sales; so it might also be a case of ‘you snooze…you lose’ at the same time.

Via Nikkei:

“Beijing has enabled Chinese automakers to dominate the domestic market for green cars by shutting out foreign manufacturers and providing subsidies to support domestic producers. The government’s sudden announcement of the strict regulations drew protests from foreign automakers.

The decision has failed to give non-Chinese makers enough time to prepare, such as building new plants and designing new models, effectively ensuring fines or forcing them to buy high-priced credits from Chinese manufacturers once the regulations go into effect.”

source: Nikkei

Tags: , , , ,

7 responses to "BYD’s Past Plug-In Sales Means It Has 290,000 Credits, Worth $440 Million"

  1. ffbj says:

    Seems likely. Tesla is the one foreign manufacturer that is getting a sweetheart deal in China.
    I guess people will complain that their selling of credits is the reason for their success in China, and they won’t be entirely wrong.

  2. Courtney vegan says:

    I would like to see a minimum range for car companies to get the money. If you can do a good range,then no money.compare plug in hybrid vs other plug in hybrid. If one can get 53 miles,then don’t give money to another that gets 20 miles.

    1. Mikael says:

      There is a 50 km minimum limit. And you get much more credits for BEVs.

      1. Dan says:

        Smaller ranges actually are the sweet spot in china. People fly or take their excellent trains for long distances. They should cap it at 100 miles. Otherwise, luxury cars whose extra battery capacity is just sitting idle on someone’s driveway will grab the credits.

  3. Ev blogger says:

    35 EV Models are sold in US, but u can seem them in dealerships only in California, except handfull in other states.
    U have to force them sell , by law.china proved it again.
    I hope govt come up min range in electric foe each car sold from 10% of total range to 25% gradually increasing over period of time.

  4. Just_Chris says:

    Seems perfectly reasonable to me those poor disadvantaged western car companies could have just as easily build ev s as ice s for China. There is a big part of me that thinks car companies that sell gas guzzlers to wealthy businessmen in polluted developing world cities diserve everything they get.

    1. ItsNotAboutTheMoney says:

      China has both significant import tariffs and subsidies for domestic manufacturers.

      So, in order to be competitive when selling their PEVs, manufacturers have to make them in China.

      That combination is a serious problem.

Leave a Reply