BYD, the world’s largest electric vehicle maker, cut back on production for a second straight month in August, making it the first time since 2020 when the Chinese auto giant saw production contract for two months in a row.
The carmaker’s sales at home also contracted, down for a fourth consecutive month, down 14.3% year-on-year.
The drop in production and sales come shortly after BYD reported that quarterly profit fell for the first time in three and a half years, reflecting how pressure to stay competitive has begun to take a toll.
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BYD made 353,090 electric vehicles and plug-in hybrids (PHEV) globally last month, down 3.78% from a year earlier, according to a monthly filing with the Hong Kong Stock Exchange on Monday. That follows a 0.9% drop in July.
A drop in BYD’s PHEV production and sales — seen since April — has persisted. But overall EV sales grew 34.4% and production rose 26% in August versus a year earlier. BYD has begun making and selling more EVs than PHEVs since April.
Still, the consecutive drops in production indicate the Chinese EV giant is putting the brakes on its massive years-long expansion amid slowing profits. The carmaker has been reducing shifts at some factories in China, while also delaying plans to add new production lines.
The last time BYD’s production fell for two consecutive months was in June and July 2020.
Monday’s data suggests the company has only met 52.1% of its yearly sales target of 5.5 million units in the first eight months. And some analysts have said that the company is unlikely to meet that target.
China Merchants Bank International analysts said they had cut their BYD sales forecast by 5% to 4.9 million units for this year, as they believe it “has become more cautious about its inventories”.
Overseas sales, meanwhile, have remained a bright spot for BYD. Particularly in Europe, the carmaker has seen significant growth, even as its closest rival Tesla has been in the middle of a sales rout. BYD’s registrations in Norway jumped 218% in August, compared to last year. For the same period, its sales in Spain surged more than 400%.
China, however, accounts for nearly 80% of BYD’s total sales, but margins are drying up for the carmaker at home amid fierce competition from competitors like Xiaomi, XPeng and Nio.
BYD has ratcheted up a price war to keep up with its competition, but has in recent months come under scrutiny from Chinese officials for those moves.
- Reuters, with additional editing by Vishakha Saxena
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