China's leading producer of electric cars, BYD, increased its sales of new-energy vehicles to more than double in the first quarter. It outpaced the overall expansion of the domestic market for electric vehicles.
The net profit of the automaker is 749.7 million yuan for the first three months of the year. The company said on Sunday that it's increased more than sevenfold from a year earlier.
The revenue of the company increased by 22.5 percent to 30.3 billion yuan. In the first quarter, the company sold 73,172 new-energy autos. The revenue included sales of hybrids and electrics. Equates increased 146 percent on the year, which is higher than the 110 percent gain in new-energy vehicle sales nationwide.
The sales of gasoline-powered autos declined 46 percent to 44,406 units mainly because of the increase in demand for battery-powered cars. The overall vehicle count of BYD was lifted by 5 percent on the year to 117,578. The increase in sales of BYD during the quarter benefited from the absence of fair value losses on assets booked last year. The automaker expects an increase of more than triple of its net profit for the first half of the year.
BYD currently holds a 20 percent share in the domestic market for new-energy vehicles in China. The company expects headwinds as the country reduces subsidies for cars. In the first quarter, the automaker received subsidies amounting to 331 million yuan. It dropped by half from a year earlier.
The Chinese government plans to cut the assistance again in late June. The cuts are expected to apply downward pressure on the profit of the companies. The company is planning to launch six new electric-powered vehicle models and three new conventional models at the Shanghai auto show in April. BYD plans to offer a wide range of options that includes sedans and sport utility vehicles.
BYD surpassed its competitor, Tesla, in terms of profitability. The company's profit increased 632 percent from a year ago. Tesla announced that the first quarter is one of the worst for the company.
BYD started as a battery maker 25 years ago. It turned into a car maker after a little more than a decade. The success of BYD's first mass-produced hybrid cars attracted the investment of Warren Buffet. Mr. Buffet bought a 10 percent stake in the company for $230 million in 2008. The company is now producing more electric vehicles than conventional cars.
