BYD Shares Dip Despite Record $100B Revenue Amid Profit Per Car Concerns

Shares of Chinese electric vehicle giant BYD (SZ:002594) slipped 3.32% to HK$390 on Tuesday after the company released its 2024 annual earnings. While the results met market expectations, investor sentiment was dampened by concerns over the company's net profit per vehicle.

BYD reported a 34% year-over-year increase in net profit, reaching 40.25 billion yuan ($5.6 billion), with revenue climbing 29% to 777.10 billion yuan—surpassing the $100 billion mark for the first time in the company’s history. This milestone cements BYD’s position as a global EV leader, especially amid intensifying competition from Tesla and domestic rivals in China.

However, analysts pointed out that the company’s profit margin per car remains modest. According to Bernstein, BYD earned an average net profit of 9,300 yuan per vehicle, up from 8,500 yuan in the previous year. While the increase is notable, it highlights ongoing pressure on margins, especially as BYD continues to engage in aggressive pricing to maintain its market share.

Despite the strong topline performance, the relatively low profit per unit is raising questions about BYD’s long-term profitability, especially with global expansion plans underway. The market reaction reflects investor caution as they assess how the company balances growth with sustainable margins in a competitive EV landscape.

As the world’s largest EV maker by sales volume, BYD's earnings performance remains closely watched. The stock’s decline suggests that while revenue growth is strong, profitability per vehicle will be key to maintaining investor confidence moving forward.