China’s Tesla-hunter BYD forecasts huge profit ahead of today’s flagship Atto launch in Japan
Shenzhen-based automaker, Tesla hunter and global electric vehicle hopeful, China’s BYD Co, has forecast a bumper 2022 of pure profit. Certainly eclipsing 2021 – likely by a factor of five – the company announced on Monday, a day before it begins a global expansion in earnest.
The world’s biggest maker and flogger of battery electric vehicles (BEVs) and assorted hybrids will today roll out its first passenger EV for sale in Japan one of the world’s largest auto markets.
The move comes as Japan’s government scrambles for a way to help the country meet its stated target of making all new car sales electric vehicles by 2035.
But like us in Oz, EVs in Japan account for about 1% of annual car sales.
BYD’s flagship model, the Tiguan sized UV (called the Atto 3), will be up for grabs from today, with deliveries to begin around March.
With sales of 1.86 million cars, BYD told the Shanghai exchange that it expects a net profit of 16 to 17 billion yuan (US$2.37 to US$2.52 billion).
That’s a decent turnaround on the 3 billion yuan profit BYD made the previous year.
As far as global sales of EVs goes, BYD is still trailing Elon by the hundreds of thousands of cars (400,000 units), every year.
However, BYD is bullish and with reason. It achieved strong sales growth and significantly improved profitability, while also planning to go hard on boosting sales at home and abroad.
BDY is touting its new series of BEV products such as its Seal model as accelerators for world domination, but in the meantime it has a curious challenge on its hands with the test subject Japanese market today.
For circa US$32,000, what was a bargain compared to Asia’s EV rivals like Tesla and Nissan, now looks pretty average.
When the former battery producer announced the release in December, the idea of a bargain EV was rich with possibility.
That all changed when Tesla CEO Elon Musk announced his own Tesla fire sale, delivering some impressive results for the world’s most valuable car company.
BYD likes its chances in Japan, as it does in Australia, where domestic automakers have been evaporated. In Japan, players like Toyota have been relatively timid in unveiling their own ideas around the EV sector.
The company set new monthly sales records for 10 consecutive months since March 2022, easily smoking Elon and Tesla in a second quarter which seemed to be all about Twitter.
Warren Buffett’s Berkshire Hathaway seems to always know what side the bread is buttered and owned some 14.9% of BYD’s Hong Kong-listed stock last time I looked.
The question is what will BYD do around the price, which let’s face it, is the main angle an ex-battery producer from outside Beijing brings to the garage.
You’d imagine the price could drop further if China’s government is involved, with likely subsidies to be unleashed to help drive EV sales.
Atsuki Tofukuji, BYD Auto Japan’s CEO, says BYD is aiming for around 22 sales sites across Japan and has been quoted saying the Atto 3 will be “considerably affordable”.
BYD has previously said it wants more than 100 sales locations from Hokkaido to Okinawa by the end of 2025.
Japan might have a shrinking, ageing population not unlike China’s, but this is still the world’s third biggest auto market, with estimates putting annual sales between 4 and 5 million.