BYD, the Chinese automobile manufacturer persistently being sold off by Warren Buffet, has achieved new sales heights for the month.
On the evening of July 2, 2023, BYD released its sales report which revealed that sales of new energy vehicles in June 2023 reached 253,000 units, an 88.79% year-over-year increase.
However, the landscape of the domestic new energy vehicle market is changing rapidly, with price reduction promotions becoming one of the keywords. On July 1, 2023, Tesla again drastically cut prices, offering customers discounts of 35,000 to 45,000 yuan when purchasing new Model S/X vehicles.
Earlier, both BYD Chairman Wang Chuanfu and Guangzhou Automobile Group Chairman Zeng Qinghong had predicted that the domestic new energy vehicle market would enter an "elimination race", a forecast that seems to be proving true.
Achieving Record Sales Requires More Effort
According to BYD's sales report, in June 2023, new energy vehicle sales were 253,000 units, while production was 252,600 units, meaning sales exceeded production. This is the second time in the first half of 2023 that BYD's monthly sales surpassed production. The first instance was in April 2023, when BYD's new energy vehicle sales reached 210,300 units, and production was 209,400 units.
With the ongoing expansion of capacity, the sales results may confirm that BYD performed well in June 2023.
On June 8, 2023, Wang stated that BYD had greatly expanded its production capacity in 2022, effectively resolving the issue of supply and demand balance. The company's current production capacity and various parts output can meet future market demand.
BYD's new energy vehicle sales have broken through 200,000 units for four consecutive months in the first half of 2023, repeatedly setting new records.
However, to achieve its annual sales target of 3 million units, BYD faces a tough battle in the second half of 2023. In the first half of 2023, BYD sold 1.2556 million new energy vehicles, a year-on-year increase of 95.78%. Based on these calculations, in the second half of 2023, BYD needs to sell 1.7444 million new energy vehicles, with an average monthly sales of about 290,700 units.
In June 2023, BYD's monthly sales reached a new high of 253,000 units, still falling short of the average monthly sales required.
Price Reduction Promotions, Accelerated Elimination Race
The day before BYD released its sales report, Tesla again sounded the horn of price reduction promotions. On July 1, 2023, Tesla officially announced that customers who purchase new Model S/X vehicles can enjoy discounts of 35,000 to 45,000 yuan.
"Before we perfect our autonomous driving technology, it's best to sell more cars at a lower profit margin and reap profits in the future," said Tesla CEO Elon Musk during the Q1 2023 earnings call. He emphasized that instead of low volume and high profit margin, increasing sales and expanding scale is the right choice at this time.
Tesla's price drop may trigger a new round of fierce competition in the domestic new energy vehicle industry.
New Developments Overseas in the Second Half of the Year
Unlike the high sales of new energy vehicles domestically, BYD's overseas performance has been mediocre.
In June 2023, BYD's overseas sales of new energy passenger vehicles was 10,536 units. Looking back at the first half of 2023, BYD's monthly sales of overseas new energy passenger vehicles were around 10,000 units.
This contrasts with BYD's publicized acceleration of overseas expansion since the second half of 2022.
Wang stated that in the first half of 2023, the overseas progress of BYD's new energy passenger vehicles was slow. In Europe, the construction of 4S stores was slow and the vehicle certification progress was not fast.
"Following the launch of the Dolphin in July 2023, BYD's globalization process will further expand," Wang mentioned.
Currently, BYD's main overseas markets are concentrated in Southeast Asia, the Middle East, South America, Australia, Europe, and they are also focusing on the Japanese market.
In Brazil, BYD has already established 24 offline dealer stores. On July 1, 2023, BYD announced that the company plans to set up 100 stores by the end of 2023 to provide local consumers with new energy vehicle sales and after-sales services.
On June 28, 2023, BYD held a product launch for the Dolphin model in Brazil. This is the fifth new energy passenger vehicle model that BYD has launched in the Brazilian market, following the Tang EV, Han EV, Yuan PLUS EV, and Song PLUS DM-i.
