How much time does the external market and competitive environment leave for BYD to adjust?
Editor’s note: This article is from the micro-channel public number “chopper Finance” (ID: niudaocaijing), Author: Wu Dalang.
Every company that has grown amidst the great controversy cannot escape the fate of being criticized all the time.
BYD is an example.
On March 29, BYD announced its full-year financial performance report for 2020. The data shows that BYD’s total operating income in 2020 is 156.6 billion yuan, an increase of 22.59% year-on-year; the net profit attributable to the parent is 4.23 billion yuan, an increase of 162.27% year-on-year.
But BYD’s auto business is still in the stage of increasing revenue but not profit.
At present, BYD’s main business is divided into three: automotive business (including fuel vehicles, new energy vehicles), mobile phone components and assembly business, and secondary rechargeable battery and photovoltaic business. Among them, the automobile business accounted for the company’s revenue ratio basically maintained at about 50%.
Because of its early entry into the field of new energy vehicles, in the first few years of the explosive growth of the new energy vehicle market, BYD and BAIC New Energy once firmly occupied the forefront of the sales list.
Nowadays, the new car-making forces that are booming and the foreign-funded car companies that are turning to new energy on a large scale are at least half a beat late in the time of entry. And BYD, which is betting on new energy, has become one of the most imaginative independent brand car companies.
However, under the general trend of domestic new energy vehicle sales growth, BYD has regressed. In 2020, automobile production and sales fell year-on-year, while Tesla, Weilai, Xiaopeng, and even SAIC-GM-Wuling all had good sales.
Public data shows that even if BYD Han goes on sale in 2020, it still fails to drive the overall sales of BYD’s new energy vehicles. Among BYD’s new energy vehicle sales, BYD’s new energy vehicle sales totaled 162,900 in 2020, a year-on-year decrease of 12.52%.
In contrast, the sales performance of BYD fuel vehicles is better than its new energy vehicles. In 2020, the sales of BYD fuel vehicles will be 231,700, an annual growth rate of 3.81%.
Interestingly, according to data from the Association of Passengers, the national car sales in 2020 fell by 1.9% year-on-year, while new energy vehicles bucked the trend and increased by 10.9% year-on-year.
The growth of BYD’s fuel vehicles and electric vehicles is contrary to the general environment of the industry, and the growth of total revenue in 2020 is largely driven by the sales of fuel vehicles.
In 2020, BYD’s gross profit margin is 25.2%, which is not dwarfed by Tesla.
In an industry environment where the profit margins of traditional fuel vehicle companies are already at a low level, BYD’s gross profit margin level is relatively good. It can also be seen that BYD’s new energy vehicle sales have declined, butStill maintained a high level of gross profit margin.
The first quarter of 2021 is about to become history. In the first two months of 2021, BYD’s new energy passenger vehicle sales increased 2.06 times year-on-year to 29,900 units, which seems to be quite satisfactory.
However, it should be noted that during the period, the national new energy vehicle sales increased by 3.82 times year-on-year to 289,000 units. In the first two months of the year, Weilai, Xiaopeng and Ideal New Energy Vehicles delivered 4.6 times and 5.8 respectively. And 4.3 times.
From 2013 to 2019, the revenue of its new energy vehicle business soared from 1 billion yuan to 39.5 billion yuan, and for the first time in 2016 it exceeded the revenue of the fuel vehicle segment, and its sales volume was almost the same as that of fuel vehicles last year. , Reaching about 230,000 vehicles.
Under the trend of the traditional auto industry’s transition to new energy sources, BYD has gradually become a hot target in the capital market.
The other side of the coin is the reputation and reputation that are not friendly. Although there are many new energy models under its umbrella, and there were no shortage of hot-selling models at one time, BYD’s brand image is not dominant overall.
The “New Energy Automobile Industry Development Plan (2021-2035)” issued by the State Council stated that by 2025, the sales of new energy vehicles and new vehicles will reach about 20% of the total sales of new vehicles.
According to data from the China Association of Automobile Manufacturers, in 2020, China’s annual car sales will be 25.311 million, of which 1.367 million new energy vehicles, accounting for 5.4%. 5.4% to 20% is a huge incremental space for electric vehicles.
According to the sales volume in 2020, China’s new car-making forces-Weilai, Xiaopeng, Ideal, etc., also account for 7.5% of China’s new energy vehicle market. In contrast, BYD’s patented technology and cost advantages have obvious advantages, but it is lacking in software, big data, artificial intelligence and other aspects.
For BYD, which has always been at the forefront of traditional car companies in its new energy vehicle business, it may be time to think about its future development strategy.
In addition to industry competition, BYD’s profitability is also a problem.
Since 2017, BYD’s net profit has continued to decline. From 2016 to 2019, it was 5.052 billion yuan, 4.066 billion yuan, 2.78 billion yuan, and 1.614 billion yuan. Of course, the decline in net profit can also be understood as Part of the reason is the investment in research and development. And BYD’s operating income has also declined. In 2019, BYD’s operating income fell by 1.78% year-on-year.
In the first three quarters of 2020, BYD achieved a net profit of 3.414 billion yuan, a year-on-year increase of 116.8%. The company predicts that its full-year net profit in 2020 will grow to 4.4 billion yuan.
However, from the perspective of new car sales, BYD’s sales in 2020 are about 427,700 vehicles, a year-on-year decrease7.46%. Among them, the sales of new energy vehicles were 189,700, a year-on-year decrease of 17.35%. The background of this decline was that the overall sales of new energy vehicles in China increased by 10.9% throughout the year.
On December 31, 2020, four ministries including the Ministry of Finance, the Ministry of Industry and Information Technology, the Ministry of Science and Technology, and the Development and Reform Commission jointly issued the “Notice on Further Improving the Financial Subsidy Policy for the Promotion and Application of New Energy Vehicles.” On the basis of 2020, it continues to decline by 20%. In view of this, there are more severe uncertainties in BYD’s future performance growth.
You must know that the battery is the main constraint of the new energy vehicle industry. At present, the power field is mainly based on ternary (NCM) and lithium iron phosphate (LFP). BYD’s blade battery is mainly based on the lithium iron phosphate system, which can increase the volume utilization rate by more than 50%, reduce the manufacturing cost by 30%, and focus on “high energy density and safety.”
Wang Chuanfu, chairman of BYD, said that the blade battery, which will redefine the safety standards of new energy vehicles, has also encountered trouble. In January 2021, a BYD “Han” car owner in Beijing posted a video on the Internet, recording his experience of a sudden power outage on the street.
Obviously, there was still 60% of the electricity when I went out, but the power was cut off and stopped in the middle of the road on the way to work. The electrical appliances in the car were all black, and the double flashes, the trunk, and the door could not be opened. The owner who was locked in the car had to call the traffic police and fire brigade to get out of the situation.
In an interview earlier, Musk was asked what he thinks of BYD. Musk said bluntly that “their products are bad and there are many problems, but the battery is not bad.” In this regard, Wang Chuanfu also responded uncompromisingly: “BYD can build Tesla in minutes.”
A few days ago, some media reported that BYD would start selling car batteries to other companies as early as the second half of 2021. This business does not rule out the possibility of a separate listing.
In the eyes of the outside world, the expansion of battery business may come from BYD’s own operating pressure.
Because of all these years, BYD had the opportunity to change everything. This company’s technology, history, and general situation are all in hand. Unfortunately, BYD has never been able to knead them to create its own moat.
Obviously, BYD is facing many pressures and challenges of future development, but the question now is, how much time does the external market and competitive environment leave for BYD to adjust?
Not long ago, Xiaomi officially announced that it would build a car. On April 1st, Lei Jun received BYD Chairman Wang Chuanfu and Sequoia Capital Shen Nanpeng at the Xiaomi Science and Technology Park. This can not help but make people guess that the car company Xiaomi will cooperate with is BYD?