BYD has posted a 19.5% decline in net profits for 2017 amid reduced subsidies for new energy vehicles (NEVs, comprising EVs and PHEVs) and a sales slump for its gasoline-engine vehicles.
Warren Buffet backed BYD’s annual net profit fell to 4.07 billion yuan (US$648 million), while its revenue rose 2.3% to 106 billion yuan.
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NEVs continue to lead the company’s revenue and profits, generating 39 billion yuan of revenue last year, up 12.8% on the previous year.
BYD forecast that its first-quarter net profits are expected to fall to between 50 million and 150 million yuan.
Beijing issued a notice on the adjustment of financial subsidies for NEVs at the end of 2016, which significantly reduced the subsidies, putting pressure on the profitability of related enterprises. China’s Ministry of Finance has targeted subsidies for lower-range NEV cars.
BYD chairman Wang Chuanfu admitted the company will remain under pressure, at least until a new set of subsidy policies are rolled out in June. “This year we aim to sell about 150,000 private vehicles and 18,000 electric buses,” Wang said.
BYD sold more than 110,000 NEVs last year, up 15% year-on-year. Its sales of gasoline vehicles dropped 24.6% year-on-year to 245,000 units in 2017.
Outside China, BYD is best known for providing electric buses to a number of cities. The latest set of figures show it took orders from over 200 cities from markets including Japan, Taiwan and the US.
See also: BYD receives first Portugal order for ebuses
