Manufacturing News

BYD Q1 profit plunges behind lower EV subsidies

BYD Co., China's largest electrified vehicle maker, reported an 83 percent drop in first-quarter net profit after Beijing slashed electrified vehicle subsidies in January.

The company posted a net profit of 102.4 million yuan ($16.1 million) in the first three months of this year, compared with profits of 605.8 million yuan in the same period last year.

BYD didn’t explain the reason for the sharp decline in profit in the quarterly financial report. But in early April, when releasing its financial report for 2017, the company warned a cut in government subsidies for electrified vehicles hurt profit margins on its electrified vehicles.

Since 2017, the Chinese government has repeatedly cut subsidies for EVs and plug-in hybrids with the aim to phase out the incentives by 2020.

Last month, BYD said it delivered nearly 111,800 vehicles, which include roughly 82,100 gasoline models and 29,600 electrified vehicles, in the first quarter.

In addition to its core light-vehicle business, BYD also produces solar panels and mobile phone components. Last year, it began selling straddle-type monorails to China cities.

BYD continues to diversify operations and revenue jumped 18 percent to 24.7 billion yuan in the first quarter.

The company is based in the south China city of Shenzhen and is listed in Shenzhen and Hong Kong. It is 8.25 percent-owned by Berkshire Hathaway, a U.S. investment company controlled by Warren Buffett.

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