Net income more than doubled to 6.8 billion yuan ($930 million) after the company sold a record number of plug-in hybrid and fully electric vehicles during the three months ended in June.
While fierce competition in China led to the slowest revenue growth in more than a year, BYD still generated 140 billion yuan in quarterly sales, according to Bloomberg calculations based on its first-half earnings.
China’s auto market has been embroiled in a fierce price war this year, with Tesla leading bold price cuts.
BYD’s still-robust financial performance will help as it navigates another period of market discounting with a preferred strategy of cutting prices on newly released models.
On the weekend, BYD unveiled a slightly cheaper range of 2023 Tang vehicles at the Chengdu Auto Show.
The continued strong sales volume performance in recent months has enabled BYD to maintain its lead over Volkswagen Group as China’s best-selling car brand this year, having passed the German auto giant in the first quarter.
BYD sold 700,000 clean cars during the second quarter, beating the previous high of 683,400 in the final three months of 2022.
The automaker notched 156.3 billion yuan in revenue during the earlier period and benefitted from a record gross margin of 19 percent.
BYD’s margin in the second quarter was 18.7 percent.
Total passenger EV sales hit 1.5 million so far in 2023, through July.
Vehicle shipments appear on track to meet BYD management’s target of 3 million units this year, and possibly surpass consensus expectations for 3.5 million next year, powered by strong domestic demand and rising exports, according to Bloomberg Intelligence, which added that better economies of scale and a deep vertical integration are helping to offset pricing pressure and are contributing to margin stability.
“Since BYD has offerings across almost all segments and price-points, BYD as a whole has been net-impervious to price cuts,” said Jack Shea, chief financial officer at Shenzhen-based hedge fund Snow Bull Capital.
Citigroup’s Jeff Chung described BYD’s performance in a post-earnings research note as “exceptional” in the face of the sector-wide price war, China’s weakening economy and EV subsidy changes.
Known for selling affordable cars to the masses, BYD has also been making progress in bolstering its appeal to a wider range of consumers.
The automaker unveiled two luxury brands, Yangwang and Fang Cheng Bao, enabling it to sell EVs in the 1-million-yuan price category, more than double the cost of some of its earlier higher-end vehicles.
It also pushed two cheaper models, called the Seagull and Dolphin, to undercut its peers.
While BYD has a seemingly unassailable lead at the top of the market, weaker foreign rivals and smaller Chinese EV players are making moves to boost their capabilities, especially in the so-called smart EV, autonomous driving space.
Xpeng snapped up Didi’s smart car business Monday in a $744 million deal.
Xpeng’s appeal in the intelligent vehicle space also won it a $700 million investment in July from VW, which is seeking to turn around its fortunes in the rapidly changing China auto market.