Chinese automaker BYD on Monday reported its weakest quarterly profit growth since 2022, as its revenue growth slowed to the lowest level in nearly four years, hit by weaker demand for electric vehicles and a war in prices in the largest automotive market in the world.
First-quarter net profit rose 10.6% to 4.57 billion yuan ($631.08 million), while revenue rose 4% to 124.94 billion yuan, BYD said in a filing.
The quarterly results suggest BYD is ahead of Tesla, which reported its first quarterly revenue decline since 2020 when the Covid-19 pandemic hampered production and deliveries.
Tesla’s biggest Chinese rival returned the title of largest seller of electric vehicles in the world to the North American giant in the first quarter, after winning it last year.
With a portfolio of brands at different price points, BYD has increased efforts to grow in the market and, at the same time, has encouraged discounts to compete for cautious consumers amid a shaky economic recovery.
BYD unveiled the U7, its third ultra-luxury model under the Yangwang brand, at the Beijing auto show on Thursday, where BYD’s premium brand Denza also unveiled its first sedan.
The initiative to sell to more affluent segments was accompanied by a prolonged and intensified price war in China, which attracted more than 40 brands and caused BYD to reduce prices since February on the latest versions of its line by 5% to 20 % compared to previous versions.
In a recent research note, Goldman Sachs predicted lower profit for its China new energy vehicle unit this year compared with 2023 and said it was possible the sector’s profitability could turn negative if there were further price cuts.
Targeting a 20% jump in annual sales in 2024 from its record sales last year, BYD is under pressure from local electric vehicle startups betting big on an all-electric future.
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