BYD reports 632% increase in profit for first quarter!
No, you did not read that headline wrong. Chinese electric vehicle maker BYD has reported earnings for the first quarter of 2019, and profit is the headline figure: up 632% year on year. That’s an incredible result in and of itself, but it looks even better when you compare it to its most famous rival, Tesla. As BYD races forward, Tesla seems stuck in reverse, having just announced one of its worst quarters ever.
BYD’s share price has risen 13% over the past three months
Source: Yahoo Finance
BYD is 25 years old, and originally made batteries. About a decade ago, it transitioned into making electric vehicles. The rest, as they say, is history… provided you add the caveat that history is still being written. BYD is reaping the rewards of massive interest in electric cars and other vehicles – it’s not just a big name at home. Its fleets of electric busses can be found transporting people around municipalities in Asia, Europe, and Latin America.
China is an emerging market for clean energy vehicles, with the government offering subsidies to electric carmakers, and frameworks for the phasing out of fossil fuels on its roads. The company managed to sell 5.2% more vehicles this quarter (73,172) than it did in the first quarter of the previous year. But this is just the tip of the iceberg: China’s Association of Automobile Manufacturers (CAAM) said sales of electric vehicles jumped by 61.7% to 1.3 million last year – this year, they expect it to increase again to 1.6 million.
In a statement, the company said: “New energy vehicles are expected to continue to sell well in the second quarter, and new energy vehicle sales and revenues continue to maintain strong growth.” It aims to sell 650,000 vehicles in 2019.
Dominion holds BYD in its Global Trends Managed Fund.
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