Recently, many publicly-listed automakers have released their financial reports for the first half of 2024. In their announcements, the focus has often been on the "major positives," such as "turning losses into profits," "narrowing losses," or "increased revenue," emphasizing how well the company is doing.
However, few automakers are willing to admit that they have "low profit per car" or are relying on "high volume, low margin" strategies. In today’s sluggish market, this is often seen as a sign of poor performance.
But BYD has demonstrated through real actions that this is the right "profit strategy" for automakers.
A Profit of 8.500 Per Car: Why is BYD Completely Unfazed?
The term "profit per car" refers to how much money an automaker earns for each vehicle sold. According to BYD's 2023 annual report, the company achieved revenue of 602.32 billion RMB, up 42.0% year-on-year, with a net profit of 30.04 billion RMB, up 80.7% year-on-year. At that time, it was estimated that BYD’s profit per car was only around 8.600 RMB.
What does this mean? If this were an individual, an annual income of 8.600 RMB would be considered "extremely poor," barely enough to cover basic living expenses.
By the first half of 2024. BYD's total revenue had reached 301.1 billion RMB, up 15.8% year-on-year, with a net profit of 13.63 billion RMB, up 24.4% year-on-year. The gross profit margin increased by 1.68% to 20.0%, yet their profit per car had dropped to 8.500 RMB.
While everything else was increasing, the profit per car declined. If this happened to another automaker, it would likely lead to executive resignations or industry turmoil.
However, BYD remains remarkably stable. The core reason is the company's soaring sales volume—gaining widespread customer recognition is BYD's primary goal.
BYD has held the top position in domestic sales for many months, even years. According to the latest data, BYD's retail sales in August exceeded 370.000 units, more than the combined monthly sales of Volkswagen and Toyota.
In recent years, the Qin family, Song family, Han family, and the Seagull, Seal, and Sealskin models from the Ocean Network have made waves in the market, employing a strategy of "attacking from above," which is still vividly remembered.
These precise market strategies have ultimately resulted in continuous sales growth. Despite a declining profit per car, BYD has still achieved significant overall growth. Notably, in the first half of 2024. BYD's new energy vehicle sales increased by 28.5% year-on-year to more than 1.61 million units, while net profit grew by 24.4% to 13.63 billion RMB.
The increase in sales driving up net profits is the reason why BYD remains unshaken.
Maximizing Resources on Key Areas
A look at BYD's historical financial performance shows that this company is far from ordinary. They know how to "maximize resources on key areas."
The first priority is, of course, heavy investment in research and development (R&D). According to data, in 13 out of the past 14 years since 2011. BYD's R&D expenditure exceeded its net profit. In some years, the gap was several times larger, with profits from vehicle sales barely covering R&D costs.
For instance, in the first half of this year, BYD's R&D expenses reached 20.18 billion RMB, ranking first among all publicly-listed automakers and all companies listed on China's A-share market. During the same period, its net profit was 13.63 billion RMB. To date, BYD's cumulative R&D investment has approached 150 billion RMB, even exceeding the market value of some companies. If BYD had saved this money, it could have acquired many companies by now.
However, BYD chose to invest these funds in technological R&D, fostering growth and development. This is not surprising, given that the company was founded on its ability to spot "technical opportunities" in the energy industry and seize the right moment to lead the market.
With this approach, BYD not only accumulated substantial technological achievements but also weathered the difficult "technical reserve" period.
Now, BYD is entering its "breakout phase." Recently, the company launched several new models, including the 2025 Seagull, Sealskin 07 DM-i, Qin L DM-i, Song L DM-i, and a full revamp of the Han family. These vehicles showcase a comprehensive upgrade of BYD's power systems, vehicle operating systems, and intelligent driving systems.
Two other strategies may not be as direct but are equally impactful. One is cost control. As the saying goes, "expand revenue, cut costs"—both are essential. BYD has put significant effort into optimizing its R&D and manufacturing systems, achieving vertical integration, scalability, and high-end production, while also adapting to overseas market demands. This makes its production system more flexible, coordinated, efficient, and reasonable.
For instance, due to reduced upstream lithium battery material costs, BYD recently benefited from a wave of "cost reduction and efficiency improvements." BYD immediately channeled these benefits into its products, allowing customers to enjoy the savings.
The other strategy is expanding into overseas markets, something BYD has been doing since its inception. Back in the day, BYD's batteries were already being exported, and its electric buses were seen around the world. Even its after-sales service and energy supplement systems were far ahead of the competition.
Today, BYD’s passenger vehicles are smarter, greener, and more luxurious than ever, with China becoming the global leader in the new energy vehicle market. This presents a prime opportunity for BYD to further expand internationally, and they are not missing out.
From Europe to nearby Japan, BYD vehicles are increasingly seen on the roads. Moreover, high-end brands like Yangwang and Denza have started to make inroads into the international premium market, showcasing the true quality of Chinese new energy vehicles.
Staying Steadfast, Pragmatic, and Unwavering
As the market becomes increasingly competitive, many automakers are promoting a "long-term strategy." Strictly speaking, the automotive industry has always required long-term planning, as even "procurement and assembly" involves technologies developed over many years by suppliers.
BYD is a prime example of this, having accumulated deep expertise in various fields. Now, they are experiencing their "moment of breakthrough." More importantly, this breakout phase doesn't come at the expense of consumers. Instead, it allows buyers to access better products and enjoy more satisfying travel experiences. Those most affected will be joint ventures that stubbornly hold onto high prices while neglecting quality improvement, and domestic brands that suffer from shortsightedness.
