Not long ago, BYD released the first quarter of the financial data, the first quarter BYD revenue of 66.8 billion yuan, an increase of 63% year-on-year. BYD Electronics, which is mainly based on consumer electronics OEM and assembly, had revenue of 20.9 billion yuan in the first quarter, accounting for 31.28% of the overall revenue. It can be seen that the revenue of BYD's automobile sector has increased significantly, but BYD's net profit in the first quarter was only 808 million yuan, and its net profit margin was only about 1.2%.
What concept? In the first three months of this year, BYD sold 291,000 vehicles, according to Citi estimates that the gross profit margin of BYD's automobile business in the first quarter was about 15.6%, because BYD has other businesses, and if it is not calculated rigorously, BYD's net profit for bicycles in the first quarter is only 480 to 1510 yuan.
Don't make money, just make a friend?
Weak profitability is already an old problem of BYD Automobile, and BYD has been trapped in the strange circle of "increasing income without increasing profits" for more than a decade, and has been criticized by investors.
From the gross profit margin point of view, BYD auto business gross profit margin of 15.6%, even weilai and ideal such as the new car-making forces that have not yet achieved profitability, have a gross profit margin of 20%, and Tesla compared with the gap is even greater, the first quarter tesla auto business operating income of 16.861 billion US dollars, gross profit margin as high as 32.9%.
From the perspective of net profitability, BYD is only about 1.2%, while Tesla's profitability is as high as 17.6%, which is about 15 times that of BYD. Not to mention the comparison with Tesla, Great Wall Motor achieved a total operating income of 33.619 billion yuan in the first quarter, about half of BYD's, but its net profit attributable to listed shareholders was 1.634 billion yuan, and its net profit was about twice that of BYD, with a profit margin of 4.86%.
From the perspective of bicycle net profit, BYD's bicycle net profit in the first quarter was only 480 to 1510 yuan, while Tesla's average gross profit of bicycles exceeded 17,800 US dollars (about 110,000 yuan).
Therefore, although BYD's sales have risen rapidly under the rapid impetus of hybrid models, its profitability is still poor. At present, BYD's cumulative undelivered orders have reached 400,000 vehicles, but the hot-selling BYD is facing another "trouble": it cannot hand over the goods and cannot earn money.
Where did the money go?
So why is the gross margin of BYD's auto business so low? Although the gross profit margin is too low is not a bad thing for consumers, it is not a long-term solution for the long-term development of a car company. BYD's low gross margin may be caused by several reasons.
1. The pricing strategy of BYD DM-i models is more aggressive
BYD's DM-i hybrid can achieve such great success, of course, and BYD DM-i hybrid excellent product strength, but more critically, DM-i hybrid pricing can be described as a stone-breaking, before we have been accustomed to the Japanese oil-electric hybrid than the fuel car is about 20,000 yuan more expensive, plug-in hybrid model is nearly 80,000 yuan more expensive, but BYD suddenly pulled the difference between the plug-in hybrid model and the same oil car to 3-40,000 yuan, and the same level of joint venture fuel vehicles are basically equivalent, suddenly detonated the market. But such an aggressive pricing strategy has resulted in a low profit margin for BYD models.
2. The price of upstream raw materials at the cost end has increased significantly
Originally did not make much money, last year also caught up with the price increase of raw materials, since 2021, the key metal resources of power batteries lithium, nickel, cobalt have a relatively large price increase. Among them, the market quotation of battery-grade lithium carbonate rose nearly 10 times year-on-year, and the increase of nickel and cobalt in the same period also nearly doubled. Although BYD has raised its price twice this year, it is still difficult to keep up with the soaring cost.
3. Invest a lot of money to improve production capacity
Because of limited production capacity, BYD has accumulated a large number of inventory orders, which seriously affects BYD's sales data. Since last year, BYD began a difficult climb in production capacity, building factories in many regions, according to the financial report, BYD in the first quarter of the construction of construction increased by 7.687 billion yuan month-on-month, in order to increase the construction costs of production capacity, but also greatly dragged down BYD's profit figures.
The road to high-end is imperative
The data shows that BYD's current average bicycle price has exceeded 150,000 yuan, not only surpassing Volkswagen, but also the gap between the two sides is still expanding. However, BYD still lacks real high-end models, BYD's current highest price model is BYD Han Qianshancui limited edition, the price is less than 330,000, but compared with Weilai, ideal, Tesla and other new car-making forces, BYD in the price range of more than 300,000, still lack of corresponding high-end products. Entering the high-end market can not only enhance profits, but also the only way for independent brands to rise.
In the case that the sales volume has reached enough to impact this year's sales champion, BYD's high-end road is imperative, in this regard, BYD has made two preparations, one is to rely on the Denza brand, this year and next two years to launch a variety of products in the price range of 300,000 to 500,000 yuan. The other is to build its own high-end brand, the price range is 500,000-1 million yuan, "independent brand, independent team, independent sales network", the first model is a hardcore off-road vehicle.
With BYD's current technical strength, it should be comfortable to cut into the product range of more than 300,000 levels, but if you want to break through upwards, it may not be more of a technical problem, but should work brand, service, quality control, and design.
Although with the outbreak of hybrid models, BYD's sales this year are expected to hit the championship, but BYD has a lot to do, of which improving gross profit margin is the key, do not make money to make a friend, perhaps short-term market development can be, but it is difficult to continue, BYD's vision should not be placed on short-term sales data, but should truly become a global car brand, I hope THAT BYD can continue to rise, lead its own brand, and truly achieve cornering overtaking.