[Dormant] Electric Vehicles

BEIJING, Aug 28 (Reuters) - Chinese electric vehicle maker BYD (002594.SZ), opens new tab reported improved net profits in the second quarter thanks to its extended market leadership, even though it led a protracted price war with aggressive discounts on its best-selling models. BYD's net profit hit 9.1 billion yuan ($1.3 billion) in the April-June quarter, up 32.8% from a year earlier and its fastest growth since end-2023, while revenue grew 25.9% to 176.2 billion yuan, it said in a stock exchange filing.

Sales of autos and related products accounted for 75.8% of BYD's overall revenue and their gross margin rose to 23.9% in the first half of 2024, up 3.3 percentage points from the same period last year. Gross margin fell to 18.69% in the second quarter from 21.88% the first quarter, per Reuters' calculations based on its fiscal disclosure. BYD has taken a significant lead in the Chinese electric and plug-in hybrid vehicle sector, leveraging its vertical integration strategy by using key components such as batteries made by the company.

It has also expanded its international presence, such as in Europe and Mexico, where it has plans to set up manufacturing. The company is facing a 17% additional tariff for exporting EVs from China to countries in the European Union. "For vehicles priced (in China) under 150,000 yuan ($21,046), BYD holds absolute pricing power because, aside from glass and tires, it manufactures almost everything in-house," said Rosalie Chen, analyst at Third Bridge.