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BYD’s growth prospects in 2024: Navigating slowdown amidst global expansion

2024 looks like being a year of slowing growth for BYD, the world’s biggest maker of electrified vehicles.

This week the company revealed its best ever financial results – for 2023, which was also its biggest sales year.

But from that high base and with intensifying competition, BYD is looking at slower growth this year than it saw in 2023 and for producers of lithium and other battery materials, its a sign that there will be no quick price fix after the brutal readjustment we saw in 2023 and early this year.

BYD though still expects solid growth – but it will not be outrageous like it was in the latter months of 2022 and through all of 2023.

The Warren Buffett supported giant though still anticipates boosting sales in 2024 by 20% to around 3.6 million units, while it has ambitions to boost exports to around 500,000 and perhaps as high as half a million vehicles and double that by the end of 2025.

The profit release to the Hong Kong Stock Exchange was followed by a behind closed doors briefing by founder and President, Wang Chuanfu.

He has these non-public briefings after releasing the annual results and last year let it be known BYD had ambitions to boost sales to 3 million or more and to boost exports – both of which were achieved. Details of the briefings later appear on a couple of Chinese business news websites.

And one point coming through from the reports is that BYD will be pushing production and sales of hybrids (plug-in types) hard as it boosts exports and starts production in areas where charging capacity is low.

2023 saw BYD lift 2023 production 62% to 3.024 million vehicles while exports more than trebled to 242,765, leaving it second behind Tesla and its 344,078 exports.

Tesla’s exports were all battery powered vehicles while BYD’s was a mix of battery and plug-in hybrids (with a conventional engine).

Many of BYD’s exports went to Russia, while they started selling in volume in Australia.

Besides Australia and NZ, 2023 saw BYD move into Japan, Germany, Brazil, and the United Arab Emirates.

But more importantly, it has started building vehicle factories in Thailand, Brazil and Hungary and an electric bus assembly plant in a local JV in Azerbaijan.

In January this year it started its regular Ro-Ro ship service to carry its vehicles to offshore markets, especially in Asia and Europe. It has one car carrier operating and its looking at possibly two more in the next couple of years.

There seems to have been a change of heart if the latest media leak is accurate. Chinese websites say Wang talked this week of a 20% rise in output this year, putting the projected target at around 3.6 million but a report a month ago, in late February gave a target of 4 million.

That sounds like 2023 where Wang revealed = a target of 3 million for production for last year and an aspiration to go as high as 3.5 million/

BYD this week an 18.6% rise in fourth-quarter profit to 8.67 billion yuan ($US1.20 billion).
While a solid performance, it was the slowest period for the company since the first quarter of 2022, as EV sales lost momentum in the world’s biggest auto market amid a brutal price war.
That price war saw BYD slash the price of an updated range of its medium EVs – battery and plug-ins by 5%.
Fourth quarter revenue was vup 15.1% at 180.04 billion yuan, according to BYD’s stock market filing.
For the whole of 2023, net profit jumped 80.7% to 30.04 billion yuan,- that more than $US4.1 billion.
Sales of autos and related products made up 80% of BYD’s operating revenue recorded a 23.02% gross profit margin in 2023, up 2.63 percentage points from a year earlier. BYD is the world’s second biggest battery maker and is a major assembler of some Apple products.