Chinese electric vehicle and battery maker BYD released its performance forecast for 2022 on January 30. The company expects to have achieved an operating income exceeding 420 billion yuan ($62.19 billion) and net profit attributable to shareholders of 16 billion yuan to 17 billion yuan, with a year-on-year increase of 458.26%. Its revenue and net profits are currently the best in its history.
According to the China Passenger Car Association, the total output of new energy vehicles in China in 2022 reached 7.219 million units, up 97.5% year-on-year. According to BYD’s report, the company produced a total of 1.877 million new energy vehicles last year, a year-on-year increase of 209.17%, which puts its sales volume above that of Tesla.
It is worth mentioning that in March 2022, BYD announced that it would stop production of its fuel vehicles. In 2022, the company sold 5,049 fuel vehicles, down 96.30% year-on-year.
The explosive growth of its new energy vehicle business has changed BYD’s focus. In the first half of 2022, the company’s automobiles accounted for 72.55% of company revenue, while gross profit margin was 16.30%. The revenue of mobile phone components, assemblies and other products accounted for 27.27%, while the gross profit margin was understandably less, at about 6.08%.
BYD said that, due to the continued sluggish demand in the consumer electronics industry, the capacity utilization rate of related production lines was low, and the profit of this business segment was under pressure. However, thanks to the increase in the share of major customers overseas and the optimization of the company’s business structure, it has achieved long-term stable and healthy development.
In 2022, the mobile phone market entered a downturn. IDC’s report shows that, in 2022, China’s smartphone market shipped about 286 million units, down 13.2% year-on-year, the largest decline on record. This is also the second time that the shipments of China’s smartphone market have dropped below 300 million units in the last decade.
BYD also faced quite a bit of negative news in 2022. In June 2021, the company announced the spin-off of BYD Semiconductor, which was to be listed on its own. After a lapse of a year and a half, the company announced the termination of the listing. Furthermore, from August 2022 to January 2023, American business magnate Warren Buffett reduced his holdings in the company seven times.