China EV and battery giant BYD reported weaker-than-expected first-quarter earnings early Monday. But despite recent price cuts that have revived demand, gross margins hit a record highs. BYD stock edged higher Monday morning.
Meanwhile, Tesla jumped early Monday after scoring key Full Self-Driving wins in China after Elon Musk's visit to Beijing.
BYD Earnings
BYD reported net income rose 10.6% to 4.569 billion yuan ($630.87 million), but down 47% vs. Q4 2023. Analysts had expected 4.753 billion yuan, or $657 million.
Revenue climbed 4% to 124.944 billion yuan ($17.25 billion). That missed views for 131.718 billion yuan.
BYD previously announced Q1 sales of 626,236 EVs, including 300,114 passenger BEVs. That was down sharply from Q4's 944,779 but up 13.4% vs. a year earlier. After a dismal start to 2024, in part due to China New Year holidays and other seasonal factors, BYD sold 302,459 in March alone, including 139,902 BEVs.
March's bounce followed big price cuts that revived demand, stealing a march on gas-burning and EV rivals. That strong demand appears to have continued into April.
Despite the big price cuts and a 70% surge in R&D spending, BYD's gross margins hit a record 21.88% vs. 20.21% in Q4 2023 and 17.86% in Q1 2023. BYD Auto's gross margins are far higher.
BYD's gross margin gains partly reflects lower lithium prices cutting battery costs.
BYD will report April sales on Wednesday or Thursday. China EV makers Li Auto, Nio and XPeng will report April sales on Wednesday.
BYD has made a number of EV announcements around the ongoing Beijing Auto Show.
China has just launched new incentives for consumers to scrap older gas-burning cars to buy EVs or lower-emission ICE vehicles by year-end. That's according to a new policy announced on Friday. The subsidy of RMB 10,000 ($1,409) may especially benefit EV makers like BYD that sell many low- or moderate-priced vehicles, where the subsidy will account for a larger share of the price.
BYD Stock
BYD stock, which trades over the counter in the U.S., rose 1.5% to 27.60.
BYD stock jumped 6% last week to 27.18. Shares could be close to forging a new base above the 50-day line, but it's still trading below the 200-day.
Tesla soared 15.3% Monday, making a big move above its 10-week moving average. Shares leapt 14% last week despite Q1 earnings and sales that were even worse than expected as Musk talked up affordable EVs, FSD and more.
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