Why does BYD climb to the top of the world?
The development of a car company can better demonstrate its confidence and quality in times of sudden wind and rain.
The development of a car company can better demonstrate its confidence and quality in times of sudden wind and rain.
At the end of August, BYD released its financial report for the first half of 2024, which showed the strength of its "leader" in terms of revenue, profit, and gross profit margin.
In an environment where there are many failures and few successes, BYD's performance is particularly outstanding.
Against the trend, revenue exceeded 300 billion yuan
From the semi annual report, we have extracted several sets of data: cumulative sales of new energy vehicles reached 1.613 million, a year-on-year increase of 28.46%· Operating revenue was 3011.27 billion yuan, a year-on-year increase of 15.76%·
Net profit was 13.631 billion yuan, a year-on-year increase of 24.44%·
The gross profit margin is 20%, a year-on-year increase of 1.68%.
From the data, BYD achieved comprehensive growth in 2024. If we delve into the details of the semi annual report, we can find that there is a lot of information worth savoring.
Firstly, let's take a look at the sales volume. In the first half of 2024, BYD's plug-in hybrid models sold 881000 units, an increase of nearly 39.5%, taking the global sales crown in the plug-in hybrid market.
Then we will look at revenue and profit. BYD's revenue in the first half of the year exceeded 300 billion yuan, reaching 301.1 billion yuan, a year-on-year increase of 15.8%.
In terms of net profit, BYD reached 13.631 billion yuan in the first half of the year, a year-on-year increase of 24.44%.
Most importantly, BYD also has a gross profit margin of over 20%. In other words, since the beginning of 2024, BYD's gross profit margin has not only not declined, but has also maintained an upward trend.
On the other hand, we can understand BYD's strategic behavior as gradually gaining pricing power in the new energy market through its huge sales base.
You should know that the data presented by BYD above was achieved against the backdrop of the 2024 price war. It would be too frivolous to simply attribute BYD's success to 'stepping on the wind'.
Just like a few years ago when new forces emerged like mushrooms after rain, some car companies were completely 'borrowing'.
This kind of pursuit of short-term profits was like carving a boat for a sword, playing with a rubber pillar. In the following years, the waves washed away the sand, and in the end, no one survived naked swimming, only building their own technological 'dam'.
Therefore, in order to fly for a long time, relying solely on the 'wind outlet' is definitely not enough. From the semi annual report, it can be seen that BYD's investment in research and development has reached an unprecedented height.
As stated in "The Art of War" by Sun Tzu, in all battles, one must achieve a perfect combination and a remarkable victory. So BYD firmly believes that only by achieving the technological advantage of 'no one has me', can we have the opportunity to stand out.
Technology is king, with R&D investment exceeding 20 billion yuan
It is precisely because the coordinates are clear enough that BYD's footsteps are so firm. 'Technology is king, innovation is the foundation' BYD is not just talking.
From the report, we can see that BYD unlocked a new achievement in R&D investment in the first half of 2024: R&D investment exceeded 20 billion yuan, expenses reached 20.177 billion yuan, and net profit exceeded the same period by 6.6 billion yuan, setting a new historical high.
If we elevate our perspective and look at the 2024 semi annual reports of mainstream listed car companies in the entire Chinese market.
we can see that BYD's R&D investment is not only higher than Tesla's 16.1 billion yuan, but also almost equivalent to the total R&D investment of Great Wall Motors, Ideal, Geely, and Changan. Xiaomi.
which is also known for its large R&D expenses in the industry, has a total R&D investment of 24 billion yuan for the whole year of 2024.
It is not that other companies' R&D is not awesome, but that BYD works too hard. According to Wind data, BYD's R&D expenses rank first among over 5300 listed companies on the A-share market, making it the undisputed 'R&D king'.
But BYD's emphasis on research and development did not only begin this year, but is a long-term strategy under BYD's development philosophy of 'technology is king, innovation is the foundation'.
According to public data, since 2011, BYD's annual R&D investment has almost always exceeded its net profit, sometimes even several times the net profit of the same period. As of now, BYD's cumulative R&D investment has reached nearly 150 billion yuan.
From a year-on-year growth perspective, the 41.64% growth rate of R&D investment in the first half of 2024 is significantly higher than the revenue growth rate and net profit growth rate. In other words, R&D not only spends more than it earns, but also spends faster than it earns.
This means that BYD not only invests all the profits obtained from the market into the development of new technologies, but also needs to constantly pay out of its own pocket to give back to the market and users, which is somewhat like the Confucian business philosophy of 'taking from the people and using for the people'.
In 2011, BYD was just a competitor that Musk dismissed as' BYD doesn't have a good product, it's even difficult to survive in China '.
Today, when netizens once again take out the interview video from back then, Musk commented, 'That was many years ago. Nowadays, BYD's cars are highly competitive.'
This is enough to prove the correctness and necessity of BYD's development philosophy of 'technology is king, innovation is the foundation'.
In addition, earlier this year, BYD Chairman Wang Chuanfu publicly stated that BYD will invest 100 billion yuan in the field of intelligence, making the highly sought after advanced intelligent driving system available as an option on BYD models priced over 200000 yuan and as standard on models priced over 300000 yuan.
The group invested in wooden peaches, and the R&D and technology departments naturally repaid it with Qiong Yao, which lived up to expectations and provided BYD with abundant technological returns.
Nowadays, BYD has a complete industrial chain of multiple technologies, covering core areas such as batteries, motors, electronic control, solar energy, energy storage, plug-in hybrid technology, intelligent technology, and automotive grade semiconductors.
It has achieved independent controllability and efficient collaboration of core components of new energy vehicles, no longer afraid of being "choked".
In terms of the total number of patents, BYD has applied for over 48000 worldwide, with over 30000 authorized patents. Relying on its vast technological reserves, BYD has established an bottomless' technological fish pond '.
Strong troops and horses, the 'Technical Fish Pool' showcases its strength
When the market needs it, BYD can catch a big fish from this' fish pond 'and serve it directly.
In the first half of this year alone, we witnessed BYD extract several 'big fish' from the 'technical fish pond' and enter the market.
The most familiar technology to everyone is the fifth generation DM hybrid technology, which leads the "Fuel Consumption 2 Era".
In our previous tests, this technology brought a surprise fuel consumption of less than 2L/100km, and 2000km of fuel per tank is not a dream.
It has set a new benchmark for plug-in hybrid technology, and "the world's most advanced plug-in hybrid technology in China" has transformed from a dream slogan to a magnificent monument.
At the same time, with the rapid iteration of technology and the emergence of economies of scale, huge sales and advanced technology are flourishing, achieving cost reduction through technological innovation, cost control, and economies of scale.
BYD has always been able to provide product value far above price, which has accelerated its capture of consumers' minds. For example, as long as the "998" is available on the market, you can buy a model equipped with BYD's latest fifth generation DM hybrid technology.
It is not surprising that netizens jokingly call the BYD Qin L DM-i the "industrial godfather". I think this is exactly 'technology equality'.
Of course, the fifth generation DM hybrid technology is just one of the 'technical fish pools'.
The nine story platform started from scratch, from the establishment of the company to the successful development of the first pure electric vehicle F3e, BYD took 11 years.
From the world's first dual-mode electric vehicle F3DM to the current fifth generation DM family, BYD has gone 16 years.
Today, I believe everyone is familiar with the 'big fish' such as blade batteries, the Eye of Heaven intelligent driving system, EasyThree party technology, EasyFour party technology, Yunlian intelligent vehicle stability system, e-platform 3.0 Evo platform, IGBT6.0 and SiC technology,
because BYD is destined to write its own legend with the goal of constantly breaking through technological barriers and leading industry changes from the beginning of the story.
The 'big fish' in the pond not only propelled the products, but also allowed the product matrix to rapidly expand. You can see that BYD's new energy vehicles have fully covered the product line from low-end to mid to high-end, and even to the luxury market.
This year alone, BYD has launched 2025 new cars such as Song L EV, Qin L DM-i and Seal 06 GT, and plans to launch several products including SUPER 3 and BAO 8 of BYD Xia, Han L, Tang L, Tang Max, Song Pro DM-i, Equation BAO series, as well as Denza Z9 GT and Yangwang U7.
The new cars have been put on the market one after another like dumplings, covering multiple market segments such as medium and large flagship MPV, high-end cars, SUVs and hard off-road SUVs, which can be called "a hundred flowers bloom in the garden", which makes foreign automobile manufacturers unbelievable: "Where are we going from here? How do we compete with the Chinese?". Indeed, times have changed.