On the evening of August 28, BYD presented its "report card" for the first half of 2024, with the most significant highlight being the continued growth of its new energy vehicle (NEV) business.

Continuously Benefiting from the NEV Business

In the first half of 2024, BYD achieved a total revenue of 301.127 billion yuan, a year-on-year increase of 15.76%; it realized a net profit attributable to the parent company of 13.631 billion yuan, a year-on-year increase of 24.44%; and a net profit after deducting non-recurring gains of 12.315 billion yuan, a year-on-year increase of 27.03%.

Looking at the business segments, in the first half of 2024, BYD's revenue from automotive, automotive-related products, and other products was approximately 228.317 billion yuan, a year-on-year increase of 9.33%; the revenue from mobile phone components, assembly, and other products was approximately 72.778 billion yuan, a year-on-year increase of 42.45%.

The revenue from the aforementioned two business segments accounted for 75.82% and 24.17% of BYD's total revenue, respectively. Both segments achieved year-on-year growth, becoming the key factors for the year-on-year increase in BYD's total revenue.

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The year-on-year increase in BYD's net profit attributable to the parent company in the first half of 2024, and the growth rate being higher than that of total revenue, is primarily due to the growth in the NEV business.

In the first half of 2024, BYD's cumulative sales of NEVs reached 1.613 million units, a year-on-year increase of 28%. Data from the China Association of Automobile Manufacturers (CAAM) shows that in the first half of 2024, BYD's market share of NEVs further increased, retaining its position as the domestic automotive sales champion and maintaining the top spot in global NEV sales.

Benefiting from the growth of the NEV business, BYD's gross margin in the first half of 2024 reached 20.01%, compared to 18.33% in the first half of 2023.

Among them, the gross margin for BYD's automotive, automotive-related products, and other products was 23.94% in the first half of 2024, an increase of 3.27 percentage points year-on-year.

According to industry insiders, changes in BYD's gross margin are an important data point for external observers to assess its growth. Public data shows that BYD's gross margin in the first half of 2021, 2022, 2023, and 2024 has shown a continuous upward trend.Looking back at BYD's early foray into the new energy vehicle (NEV) sector, which was not initially well-received, to its current status as the global leader in NEV sales, its growth journey can be considered a microcosm of the development of China's automotive industry.

Data from the China Association of Automobile Manufacturers (CAAM) shows that, as of the end of June 2024, the cumulative production and sales of domestically produced NEVs have both exceeded 30 million units, indicating the formation of a scaled market.

Forecasting a further breakthrough in the penetration rate of NEVs, BYD predicted in its semi-annual report for 2024 that the NEV market will welcome an even broader development space and continue to maintain a robust and rapid growth trend, with the penetration rate expected to break through again.

BYD's aforementioned forecast is based on two points: first, the continuous maturation of NEV technology and increased consumer awareness; second, policy support. For instance, in terms of policy support, in July, the "Several Measures on Strengthening Support for Large-Scale Equipment Updates and the Replacement of Consumer Goods with Old Ones" was issued, which mentioned the need to raise the subsidy standards for vehicle scrapping and updating, benefiting the consumption of NEVs.

In response, BYD mentioned the future development of its automotive and battery business, stating that it will strengthen the autonomy and controllability of core technologies, closely follow market trends, and accelerate the process of going global.

BYD stated that in the field of new energy passenger vehicles, the company will continue to deepen the research and development of core electrification and intelligent technology of NEVs, drive product upgrades with innovative technology, empower a multi-brand tiered layout, meet consumers' differentiated vehicle needs, and consolidate and strengthen its leading position.

In the first half of 2024, BYD's R&D investment reached 20.177 billion yuan, a year-on-year increase of 41.64%.

Regarding the overseas expansion of passenger vehicles, BYD will leverage its leading advantages in new energy technology and product strength to accelerate the improvement of overseas multi-regional production capacity layout and sales network construction.

At the same time, BYD will expand its product matrix for passenger vehicles going overseas, continue to work closely with partners to cultivate overseas markets, and provide global consumers with differentiated, competitive products and high-quality services. As of the end of June 2024, BYD's new energy passenger vehicles have entered 77 countries and regions, including Brazil, Germany, Japan, and Thailand.