Is it to walk on multiple legs, or to fight for the results of electrification?
Text/Shanshan Xu
On April 27, a number of domestic and foreign car companies announced the performance report of the first fiscal quarter of 2022. In addition to the big brother Geely, the other two independent leading car companies have released the first quarter report card, of which BYD's net profit rose by 2.4 times, while Great Wall Motor's profitability declined.
Judging from the specific data, BYD achieved operating income of 66.825 billion yuan in the last quarter, an increase of 63.02% over the same period last year; net profit attributable to shareholders of listed companies was 808 million yuan, an increase of 240.59% year-on-year.
In contrast, Great Wall Motors, which announced its earnings report earlier, saw a decline in profitability, with a net profit of 1.634 billion yuan in the quarter, down 0.34% year-on-year; operating income of 33.619 billion yuan, a slight increase of 8.04% from the same period last year.
Compared with the Obviously Insufficient Great Wall Motors, BYD's main business has blossomed more.
The Great Wall relies on subsidies by BYD to "walk on multiple legs"
In the first quarter financial report, BYD did not disclose the revenue breakdown of the three major business segments of the automotive business, mobile phone components and assembly business, secondary rechargeable batteries and photovoltaic business. Referring to the 2021 annual financial report, the above three major sectors accounted for 52.04%, 40% and 7.62% of ATD's total revenue, respectively, and the preliminary estimate was about 34.7 billion yuan in the revenue of automobile-related business in the previous quarter.
From last year's annual reports, it is not difficult to find that BYD and Great Wall Motors have relatively close revenues in automobile-related businesses. The difference is that BYD has fully switched to electric vehicles, and it also has mobile phone foundry and power battery business.
When global car companies clamor for power batteries to be out of stock and price increases will fall into a vicious circle, BYD does not seem to have any distress in this regard. In the first quarter, BYD's battery loading volume was 10.41GWh, an increase of 2.47 times year-on-year, and its market share rose all the way to 20.31%.
It not only shot down many second- and third-line battery factories, but also snatched food from Ning Wang's body. Compared with Tesla, which is good at making money, BYD's "multi-legged walking" strategy has begun to show results.
At this stage, the electric vehicle industry is not only facing the challenge of rising battery prices, but also the continued shortage of parts has also added uncertainty to shipments. For this, BYD Semiconductor's wholly-owned byBYD Semiconductor's products cover MOSFETs, IGBTs, IPM, SiC power devices, etc., which alleviates the shortage of parts in the former to a certain extent.
For Great Wall Motors, the unfavorable start of the first quarter has begun to make the market question whether its "brand up" strategy can work.
Like other domestic car companies, Great Wall Motors joined the army of price increases early, and in order to reduce the more losses that may result from thin-profit models, Great Wall announced in February this year that Euler's black cats and white cats would stop production. By March, the price of all the models of euler good cat began to rise, ranging from 6,000-7,000 yuan; followed by April, the price of some models in the Wei brand coffee series on sale increased by 5,000-12,000 yuan.
However, the price increase did not bring more revenue to Great Wall Motors. In its first-quarter earnings report, Great Wall Motor disclosed an 800 million yuan government subsidy project, accounting for 49% of its net profit. Without this revenue, the net profit would have fallen by much more than 0.34 percent. It is worth noting that this is the third consecutive quarter of net profit decline for Great Wall Motors.
There is no doubt that this year has been an extraordinary year for most car companies. The epidemic continues to spread, and the adverse impact on the industrial chain supply chain is also reflected in automobile sales. Looking at foreign markets, the same is true.
BYD's sales nearly doubleD U.S. auto giants accelerate electrification
On April 27, BYD also released earnings reports with U.S. auto giants such as General Motors and Ford Motors. Among them, General Motors achieved revenue of $36 billion in the previous fiscal quarter, an increase of 11% year-on-year; net profit fell 2.7% to $2.9 billion; while Ford's revenue fell 5% to $34.5 billion in the last fiscal quarter, and net profit fell nearly twice, with a loss of $3.1 billion.
Sell less, naturally earn less. In the first quarter, for example, Tesla's deliveries rose 68%, while BYD's deliveries grew by nearly 1.8 times. In contrast, GM and Ford in north America both experienced significant declines in sales in the quarter.
Ford's net profit fell far more than revenue, according to which it said, in a major reason that the company's valuation of Its holdings in Rivian is falling sharply. At the time of Rivian's listing, the stock price soared by more than $170, second only to Tesla in market capitalization, but now the former "Tesla killer" has fallen to $31.22, and the market value has shrunk to $28.1 billion. This also explains that only marketing regardless of the delivery of the brand is destined to be more bubble.
Tesla, which single-handedly tore open the electric car market, has become one of the most profitable car companies in the world. In the first quarter of this year, Tesla's single-vehicle gross margin reached 32.9%, leaving most auto giants behind. Because of this, Tesla has become a consistent target of the US auto giants.
According to GM, the annual salary of future company executives will be tied to electrification goals. Starting this year, its North American electric vehicle sales, model time-to-market time and quality will collectively determine the amount of compensation for the relevant executives. There is no doubt that GM is more determined to accelerate the development of the electric vehicle business.
For now, BYD's comprehensive focus on electric vehicles has shown a strong growth trend, but other auto giants are also accelerating the transformation, relying on "multi-legged walking" BYD is not resting easy, after all, the fight has just begun.