On March 29, BYD released its 2021 annual results report. In this report card, there is a set of data that makes people praise BYD's super high revenue ability, but also surprise it for its dismal annual profit.
The report shows that BYD achieved operating income of 216.142 billion yuan in 2021, an increase of 38.02% year-on-year, but the net profit attributable to shareholders of listed companies was 3.045 billion yuan, down 28% from 4.234 billion yuan in 2020. Revenue soared, profits plummeted, and BYD's annual report was indeed a bit jaw-dropping.
It should be known that Geely Automobile's annual revenue in 2021 is 101.6 billion yuan and net profit is 4.35 billion yuan; Great Wall Motor's total revenue in 2021 reached 136.317 billion yuan and net profit was 6.781 billion yuan. It can be seen that BYD's revenue in 2021 is much higher than that of Geely Automobile and Great Wall Motors, but its net profit is the lowest of the three.
In fact, since the launch of the Tang series models, BYD's cars have become more and more expensive, so many people say that BYD has begun to drift. But BYD's annual financial reports tell us a fact: BYD is a company that does not increase revenue and does not increase profits, and increasing revenue without increasing profits means that it can hardly make money selling cars, and there may even be losses.
So the question is, BYD, which has a market value of 686.5 billion yuan, has a revenue of 216.142 billion yuan in 2021, but its net profit is only 3.045 billion yuan.
In 2021, BYD has put cost pressure on consumers
Presumably, friends who have a little understanding of the new energy automobile industry know that with the rapid development of new energy vehicles, the price of battery raw materials is rising at an unimaginable speed in the past two years. Since last year, affected by the rising cost of raw materials for batteries such as cobalt and nickel, the power battery market share of the new energy automobile industry has shifted from ternary lithium batteries focusing on endurance to low-cost lithium iron phosphate batteries.
It is understood that each ton of lithium iron phosphate needs to consume 0.96 tons of iron phosphate and 0.25 tons of lithium carbonate, and the growth of lithium iron phosphate battery capacity directly drives the demand for upstream lithium carbonate. Business agency data show that a year ago, the price of battery-grade lithium carbonate was 78,000 yuan / ton, and as of March 29, the price of lithium carbonate has risen to 480,000 yuan / ton.
Source: Kosaisha
However, as the cost of pure electric vehicles, power batteries cannot be fully reflected in the terminal price. If this 6 times increase in raw materials is directly reflected in the terminal price of new energy vehicles, then the new energy automobile industry that the mainland has painstakingly operated for more than a decade will collapse in an instant, because no consumer can accept the price increase without an end in sight.
The rising cost of power batteries has become a fact, and there is a continuous upward momentum, but consumers can not accept the continuous increase in the terminal price of new cars, then the pressure brought about by the rising cost of power batteries is naturally borne by new energy vehicle companies.
In other words, how much new energy vehicles a car company sells, how much cost pressure it has to bear. BYD, which has topped China's new energy vehicle rankings for nine consecutive years, sold more than 600,000 new energy vehicles in 2021, and the cost pressure it faces can be imagined.
In fact, from 2021, the price of battery raw materials has begun to soar, but BYD chose not to increase prices last year, but to reduce the dependence on power batteries by introducing DM-i hybrid technology. Until the beginning of 2022, UNDER the pressure of subsidy decline, BYD raised the price of new energy vehicles twice. During this time, it has been trading in exchange for the market by reducing profits.
Under the influence of factors that are not conducive to the development of new energy vehicles, such as the soaring price of battery raw materials and the decline of subsidies, every new energy vehicle company is carrying the pressure of rising costs for consumers. Therefore, Xiao Lei believes that it is normal for new energy vehicle companies to increase revenue and not increase profits.
Of course, the benefits of resisting the pressure brought about by the soaring price of battery raw materials for consumers are also quite obvious. Nowadays, the cost of battery raw materials is soaring, and it is difficult for the vast majority of new energy vehicle companies to make money by selling new energy vehicles in a short period of time. Since you can't make money, it seems that it is also a good choice to lose money and make a drink.
Lose money, make money, win the market
According to data from the China Automobile Association, in 2021, China's new energy vehicle market sales were 352.1 units, an increase of 1.6 times year-on-year, and the market share has reached 13.4%, which is 8% higher than that in 2020. Among them, BYD's sales of new energy vehicles exceeded 600,000 units in 2021. This means that on average, one of the 6 new energy vehicles sold in the Chinese market is BYD.
It is worth mentioning that by DOINGD's increase in revenue and not in profit did not start last year, but has always been like this. In the past, BYD, which focused on cost performance, was known as the "price butcher", and now it has carried the pressure brought by rising costs for consumers.
From the perspective of BYD's sales and revenue last year, BYD, which takes a cost-effective route, has made enough money after nearly 20 years of painstaking operation. The so-called shouting, that is, the brand effect. In Xiao Lei's view, there are only two car companies that can represent new energy vehicles so far, one, Tesla; and the other, BYD.
The reason for Xiao Lei's conclusion is very simple, if we mention new energy vehicles, in addition to Tesla and BYD, who else can you think of at the first time? In fact, the brand effect can bring FAR MORE benefits to BYD than many people think.
On March 22, Skyworth Auto released the official picture of its new Skyworth HT-i model, which is equipped with DM-i super hybrid technology provided by BYD. In Xiao Lei's view, this model shouldering the mission of revitalizing Skyworth, its biggest natural enemy will be BYD, which provides it with core technology.
You know, if consumers are really buying cars for DM-i technology, then why don't they just buy original BYD cars? If we understand this point of view in reverse, two models that are also equipped with DM-i, the reason why consumers will choose BYD, is not it because it is "BYD"?
Based on this point of view, the 600,000 new energy vehicles sold by BYD in 2021, in addition to its certain advantages in technology and cost performance, also have a great relationship with the "BYD" brand. In the future, as the brand effect of the three words "BYD" becomes stronger and stronger, BYD's sales will naturally rise.
Although BYD's brand effect has been reflected in the market has achieved remarkable results, the brand effect cannot solve the cost problem of the car at a time when the environment is not good. On the contrary, if the cost of bicycles is too high, it will make BYD's net profit worse.
Therefore, in order to solve the problem of food and clothing, BYD must engage in more side business and find another way out. The so-called side business is the business spin-off that BYD has been carrying out.
Doing side business is BYD's way to make money?
As early as 2007, BYD launched an "open cooperation" strategy. By the 2018 "Global Developers Conference", BYD announced to global developers that it would gradually open up 341 sensors and 66 control rights in the DiLink system, which is the first case in the entire automotive industry. Subsequently, BYD also proposed a comprehensive open strategy for e-platform technology.
In March 2020, BYD officially established five Fordy subsidiaries that are wholly owned by IT. The five subsidiaries include Fordy Mold, Fordy Technology, Fordy Power, Fordy Battery, and Fordy Vision. BYD officials said that the establishment of these 5 Fordy companies means that BYD's open strategy has moved from the 1.0 era to the 2.0 era.
According to Wang Chuanfu, chairman of BYD, the car from closed to open is the only way for automobile intelligence. In fact, its industrial spin-off is indeed not only for better cooperation, but also a way to explore the "new four modernizations of automobiles" reform, and the Fordy subsidiary established by the spin-off is only the epitome of its industrial transformation and upgrading.
Nowadays, new energy vehicles have become the trend of the times, and BYD has been working in the field of new energy vehicles for nearly 20 years and is a well-deserved leader in the field of new energy vehicles. Whether it is its core three-electric technology (battery, motor, electric) in new energy vehicles, or integrated major systems are extremely scarce resources in the industry at present.
You know, whether it was Mitsubishi selling engines in those years, or toyota, ZF selling gearboxes today, the profits brought by toyotas selling gearboxes are more lucrative than many car companies selling cars, and BYD, which realizes technological openness, can sell far more than engines or gearboxes.
In fact, WHEN BYD released its "blade battery" in March last year, it said that almost all car brands were discussing cooperation solutions based on "blade battery" technology with BYD.
Previously, BYD and FAW Group have jointly established FAW Fordi New Energy Technology Co., Ltd., which will meet the supporting needs of 1 million electric vehicles after the project reaches production. Recently, there is also news that Fordy Battery is actively exploring the market of new car-making forces, and Weilai and Xiaomi will use BYD batteries.
WHAT BYD can sell is not limited to batteries, but also its proud hybrid technology. For example, the Skyworth HT-i mentioned by Xiao Lei above is the first model equipped with BYD DM-i super hybrid technology. Xiao Lei believes that there will be more new energy vehicles in the future that will be equipped with technology provided by BYD.
In addition, when global car companies are facing the double "famine" of battery chips, BYD has behaved calmly and calmly, because BYD Semiconductor, as China's largest automotive grade IGBT manufacturer, not only has a strong power battery self-research capability, but also has a perfect semiconductor industry chain.
In the future, BYD Semiconductor, which has completed business spin-offs and is preparing to go public, plans to take automotive-grade semiconductors as the core and simultaneously promote the development of semiconductors in the fields of industry and consumption.
summary
As Wang Chuanfu said, BYD is no longer a battery company, nor is it just a car company. Whether we look at BYD from the perspective of a battery company or from the perspective of a car company, we can only see a one-sided BYD.
Today, WITH SOLID TECHNICAL ACCUMULATION, COMPLETED BUSINESS SPIN-OFF, AND ISD IS FULLY OPEN TO THE OUTSIDE WORLD IS DEFINITELY NOT JUST A CAR COMPANY OR A BATTERY COMPANY, BUT A TECHNOLOGY PLATFORM. In today's new energy vehicle environment is not good, compared with the temporarily difficult to profit of the vehicle manufacturing industry, the external transportation technology may become BYD's new profit cow.
Note: The material for this article comes from the Internet