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BYD, a leading electric vehicle manufacturer in China, is experiencing significant headwinds in its domestic market. The company’s profit for the first quarter of the fiscal year (April-June) decreased by 30%. Net income fell to 6.36 billion yuan (892 million dollars). Revenue also fell short of expectations, reaching 200.9 billion yuan. These results represent some of the poorest performance for BYD, despite its reputation as a prominent player in China’s EV boom.
BYD’s difficulties stem from intense price competition within the Chinese EV industry. In an effort to compete with Tesla and other Chinese automakers, BYD has been offering substantial discounts on its vehicles. This strategy is now impacting the company’s profitability. The gross margin declined to 16.3%, the lowest since the beginning of 2023. The message to investors is clear: maintaining high sales volumes is proving more costly than anticipated.
