BYD Reports 30% Profit Jump Amid Chinese Market Slump

BYD Company reported a 30% increase in second-quarter net income to 8.2 billion yuan ($1.2 billion), marking its first profit rise in five quarters. The growth was driven by surging exports to Europe and South America and increased demand for higher-priced models, which offset a prolonged industry downturn and fierce price discounting within China.

Despite the profit rebound, second-quarter revenue slipped approximately 3% to 194.6 billion yuan. First-half sales of 1.81 million cars leave the company trailing its annual target of 5 million to 5.5 million vehicles. The automaker now sells over 40% of its vehicles outside of China to escape a domestic market where passenger car sales fell 20% during the first half of the year.

BYD faces significant geopolitical headwinds, including potential European Union tariffs on hybrid vehicles and a probe by the Hungarian government into state subsidies and tax breaks for its factory in Hungary. In response, the company has delayed production in Hungary until the fourth quarter and expanded into the Japanese market with the launch of the Racco, a specialized electric mini car. In June, BYD and Chery Automobile Co. captured a record 34% share of European plug-in hybrid deliveries.