BYD became the world's first car company to officially discontinue fuel vehicles.
On April 3, 2022, BYD announced that according to the needs of the company's strategic development, it will stop the production of fuel vehicles from March 2022 and will focus on pure electric and plug-in hybrid vehicles in the future.
The complete suspension of fuel vehicles was discontinued
BYD's production and sales in March 2022 both exceeded 100,000.
According to the data, in the first quarter of this year, BYD's cumulative output of new energy vehicles reached 287,500 units, an increase of 416.96% year-on-year; cumulative sales reached 286,300 units, an increase of 422.97% year-on-year. Sales of all-electric and plug-in hybrid passenger cars were 143,200 units and 141,500 units, respectively, up 271.05% and 857.4% year-on-year. The production and sales of fuel vehicles fell sharply in the first quarter, down about 90% year-on-year.
In March, BYD produced a total of 106,600 new energy vehicles, an increase of 396.8% year-on-year; sales of 104,900 units, an increase of 333.06% year-on-year, of which 53,664 pure electric passenger cars and 50,674 plug-in hybrid passenger cars. At the same time, the company's production and sales of fuel vehicles are all 0 units, achieving a "milestone" of full electrification.
BYD's high-end breakthrough has also made progress. In March, a total of 12,359 Han family models were sold, up 33% month-on-month, of which Han EV sales were 10,178 units, and Han DM sales were 2,181 units, up 5 times month-on-month. Since its listing, the Han family has sold nearly 200,000 vehicles, ranking first in the sales volume of medium and large cars of Chinese brands.
In addition, the Tang family sold 9,625 vehicles in March, the Song family sold 26,729 vehicles, the Qin family sold 24,797 vehicles, the Yuan family sold 12,881 vehicles, and the Dolphin model sold 10,501 vehicles.
BYD has ranked first in China's new energy vehicle sales for nine consecutive years, and the cumulative sales of new energy passenger cars are about to exceed the 1.8 million mark. In 2021, BYD sold 593,700 new energy vehicles annually, a sharp increase of 2.3 times year-on-year, of which 320,800 pure electric passenger cars and 272,900 plug-in and mixed passenger cars were sold, an increase of about 1.4 times and 4.7 times respectively.
BYD said it will officially stop production of fuel vehicles from March 2022 and focus on the development of pure electric and plug-in hybrid vehicles in the future. In this strategic adjustment, BYD focuses on the national "double carbon" strategic goal, adheres to the new development concept of "innovation" and "green", leads the industry change with scientific and technological innovation power, and promotes sustainable social development with green and low-carbon cycle.
At the same time, BYD said that the company will continue to produce and supply fuel vehicle parts, continue to provide perfect service and after-sales guarantee for existing fuel vehicle customers, as well as the supply of spare parts throughout the life cycle.
Cui Dongshu, secretary general of the National Passenger Vehicle Market Information Joint Association, said that due to the technological breakthrough of blade batteries and the technological breakthrough of DMI hybrid technology, coupled with its strong vertical integration of industrial capabilities, BYD has realized the replacement of fuel models with plug-and-mix models, achieved good consumption upgrades, and effectively replaced international brand fuel vehicles. At the same time, the unique model of BYD's product manufacturing system has formed a strong unique advantage. Traditional fuel vehicles have their own unique advantages, and in the short term, it is difficult for other international car companies to achieve BYD's choice of stopping the sale of traditional fuel vehicles. The suspension of fuel vehicles also helps to enhance BYD's brand image, making it the world's first car company to discontinue fuel vehicles.
The supply chain is not optimistic
Affected by the decline in national subsidies for new energy vehicles and the sharp rise in the price of battery raw materials, BYD has announced price increases twice this year.
On January 21 and March 15, 2022, BYD adjusted the official guidance price of new energy models related to Dynasty and Ocean Network, with an increase of 1,000 yuan to 7,000 yuan in January and an increase of 3,000 yuan to 6,000 yuan in March.
Recently, there is news on the Internet that BYD will usher in a new round of price increases in early April, with the lowest price increase of 3,000 yuan. In response, Li Yunfei, general manager of BYD's auto brand and public relations business unit, responded by calling this false news.
Behind the rumors of price increases, BYD's cost pressure is serious. According to the data, BYD achieved revenue of 216.142 billion yuan in 2021, an increase of 38.02% year-on-year; of which the revenue of the automobile business was 112.489 billion yuan, an increase of 33.93% year-on-year, accounting for 52.04% of the total operating income; the gross profit margin of the automobile business fell by 7.81% year-on-year to 17.39%; the net profit attributable to the shareholders of the listed company was 3.045 billion yuan, down 28.08% year-on-year. BYD's subsidy income for new energy vehicles in the same period totaled 5.867 billion yuan, and the government subsidies included in the profit and loss of the current period were 2.263 billion yuan. If after deducting government subsidies, the company's actual profit in 2021 is only 782 million yuan.
In response to the phenomenon of "increasing revenue without increasing profits", BYD explained that the main raw materials required for the company's production include steel, plastic and other metal raw materials, such as lithium, cobalt, etc. The fluctuation of raw material prices directly affects the production cost of the main business, which in turn has a certain impact on operating performance.
According to the previous plan, BYD conservatively expects sales of 1.5 million vehicles in 2022; if the supply chain is good, it will hit the sales target of 2 million vehicles. Entering 2022, supply chain problems such as chip shortages and general price increases in raw materials pose a lot of challenges to BYD's sales targets. In addition, with the comprehensive decline of subsidies for new energy vehicles in 2023, BYD's profitability will also face downside risks.
Facing 2022, BYD said that in the field of passenger cars, the group will continue to improve the new energy vehicle product matrix to meet the multi-dimensional needs of consumers. It will rely on multi-channel platforms such as Dynasty Network and Ocean Network to provide consumers with better products and services. In terms of plug-in and mixing, models equipped with DM-i super hybrid technology such as the Song MAX DM-i and destroyer 05 have been launched one after another. In terms of pure electric power, more models equipped with e-platform 3.0 will be launched on Dynasty.com and Ocean.com. In the face of a market environment in which supply outstrips demand, the Group will continue to increase its capacity expansion efforts to meet market demand.