China's BYD posts better electric car sales in first half of year

By Dow Jones

BYD Chairman Wang Chuanfu told a news conference on Monday that the outlook for the traditional car industry remains uncertain for the rest of the year, without giving a full-year sales target. "Given the challenging environment for traditional car sales, we would put more emphasis on our push to boost electric car sales by introducing more new models in the second half," he said, noting that BYD plans to launch a new plug-in hybrid sport-utility model called Tang and a pure electric car named Denza that is manufactured by a joint venture of BYD and Germany's Daimler AG.

BYD's weak results underscore the challenges China's carmakers face in their home market. The company, which is 9. 1 per cent-owned by MidAmerican Energy Holdings Co. , a unit of Warren Buffett's Berkshire Hathaway Inc. , is the biggest seller of electric cars in China, with a 37 per cent share of the market during the first half of the year, according to BYD.

This year for the first time, big cities such as Beijing and Shanghai are relaxing subsidy rules that effectively prevented sales of electric and hybrid cars by local manufacturers that weren't based in their jurisdictions.

BYD, China's leading producer of electric cars, said its sales of the cutting-edge vehicles rose sixfold during the first half of the year, following moves by Beijing to encourage green cars to tackle pollution.

Barclays said BYD's results are "unimpressive," while JL Warren Capital said it doesn't expect the company's electric cars to sell beyond Shanghai, Shenzhen, and Guangzhou due to local protectionism. "Without local government support in the form of subsidies, the demand simply isn't there for electric vehicles.

Poor sales of gasoline-powered cars and continued losses from a division that makes solar panels pushed BYD's first-half net profit down more than 15 per cent to CNY361 million versus the previous year, the company said Sunday.

And the increased sales of electric cars couldn't offset a 27 per cent decline in sales of traditional gasoline-powered cars, which still account for nearly half of BYD's total revenue.

Read more here: Business Spectator

    

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