BYD is losing money. What awaits the biggest manufacturer of “trains” in China?

BYD is losing money. What awaits the biggest manufacturer of “trains” in China?


In June 2019, the Chinese government announced the reduction of subsidies in the purchase of electric or hybrid charging the battery from an external source. Since then, sales in this segment falling continuously. Moreover, in 2019 for the first time in the history of electric cars and hybrids in China, the demand for these products fell. The history of “green” in China can be counted since 2009 when the Communist party launched a program to encourage the development and sales of “trains”. Recall that the buyer of an electric vehicle or hybrid rechargeable from an external battery source with several benefits. First, the state and the head office and local level offset a fraction of the price, and secondly, the owner is exempt from vehicle tax. But it is not important.

In large cities, where the buyer of conventional cars with internal combustion engines had to purchase the state license plate at auction for $8-15 thousand, the owner of the green machine received it for free. This program operates in Shanghai, Guangzhou, Beijing and other cities. It spawned many small, inferior cheap electric cars designed for poor car population to those who can not buy a room. In fact, this transport is a battery on wheels, covered with a weak body.

Despite the decline in sales in 2019 in China, there were 1,206 million customers on “green”. Please specify what this includes and electric buses and even trucks. The main jump in sales of “green” in recent years peaked in 2018, then the sales grew by 61,7%, while a year earlier the entire market “trains” made in China 778 thousand.


In short, at the end of 2019, the government announced that in order to avoid a further fall in demand for “green” partially restores some benefits, say vehicle tax owner of an electric vehicle may not pay for two years. Alas, it didn’t help: sales continues to decline. The coronavirus has made its corrections: in the epidemiological period of 2020 “green” in China falls more than usual machines.

On average, the segment of passenger cars fell by 45,2%, in that time, as “green” has lost 61.5 per cent. No wonder the alarm sounded leading manufacturer of electric vehicles and hybrids. In particular, the company BYD recorded last year profits fall by 42%. Note that this reduction of profit by 45.2% was attributable to falling demand for the products of BYD is just 11.4%. And if sales dropped more? At home, BYD has partnered with Daimler and Toyota. Despite the alarming situation, only on April 2, the company BYD signed an agreement with Toyota about a joint venture BYD Toyota EV Technology, just for the “electric” line.

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