Its electric car sales fell 7.5 percent… The explanation is in the COVID-19 pandemic.
Although it sold 7.5 percent fewer cars in 2020 due to the COVID-19 pandemic, BYD increased its profits in the same year by 162.7 percent, according to Reuters. If you are wondering how that is even possible, the explanation also lies in the pandemic and how BYD decided to tackle it: by making masks.
The Chinese electric car company has gained a reputation for excellent masks, and they sold incredibly well. This is what has helped BYD go from an RMB1.6 billion net profit in 2019 to RMB4.23 billion in the following year. All that with a 22.6 percent decrease in revenue, which represented RMB156.6 billion in 2020.
Backed by Warren Buffett, BYD managed to achieve the amazing financial result in times in which most automakers are struggling to sell more cars or trying to get microchips to deliver the ones they manage to trade.
Yet, the company lost 7.5 percent of its car sales when the Chinese market retracted 1.9 percent in 2020, which is a clear sign that things were worse for BYD than for its competitors. The lower Chinese sales did no harm to how big that market is. Even with the problems, 25.3 million new vehicles were sold in China in 2020.
Luckily for BYD, the Han has proved to be a success. It helped the company almost triple its sales in January 2021. In February, the company sold 10,123 plug-in cars, a result that was 270 percent better than that the company had in February 2020.
The Han uses BYD’s Blade Batteries, which present a life cycle of 8 years or 1.2 million km thanks to LFP. It is also extremely safe and 30 percent more affordable than comparable LFP battery packs – Interact Analysis believes it costs as low as $90/kWh.
With the Han success in its home market, BYD expects its net profits in the first quarter of 2021 to rise between 77.6 percent to 166.3 percent compared to Q1 2020.