BYDDY - BYD's Global 'Plugin' Electric Car Sales Are Surging Higher In 2023 Targeted To Reach 3 Million

2023-07-09 05:46:54 ET

Summary

• BYD now sells approximately 1 in every 5 'plugin' electric cars globally and 2 in every 5 in China. BYD is ranked number 1 globally for 'plugin' electric car sales.
• BYD & Tesla are way out in front of their peers in terms of global plugin electric car sales. BYD has 6 of the top 12 best selling electric cars.
• BYD's electric car sales are targeted to reach an impressive 3.0-3.6 million new energy vehicles ("NEV's") in 2023, compared to Tesla at 1.8-2.0 million. BYD's global expansion continues.
• BYD's valuation looks attractive on a 2024 P/E of 22.6, especially given the company's strong revenue growth rate. We rate BYD stock an 'accumulate'.

BYD Co. ("BYD")[SHE:002594][HK:1211]( OTCPK:BYDDY ) ( OTCPK:BYDDF ) - Price = CNY 264.40, HKD 254.60, USD 66.47 ( OTCPK:BYDDY ), USD 33.29 ( OTCPK:BYDDF )

BYD Co [HK:1211] 5 year stock price chart ( source )

Note: This article focuses mostly on BYD's electric cars and electric car sales.

Trend Investing has been following and writing on BYD Co. since 2015. In that time we have seen the company grow to become the world's number 1 seller of plugin electric cars and the number 2 seller of 100% electric cars. The stock price has also grown over 5x in that time.

• March 2015 - Chinese Electric Vehicle Companies About To Boom
• April 2015 - BYD - China's Number 1 Electric Vehicle Company Is Booming (@~HKD 47)
• June 2015 - BYD - China's Number 1 Electric Car Company - A Recap And An Update
• May 2016 - China's BYD Is A Great Buy (@~HKD 45)
• July 2016 - Chinese Electric Vehicles Continue To Boom
• Sept. 2017 - The Electric Vehicle Boom Just Went Into Overdrive - What Stocks To Buy? (@~HKD 72)
• Sept. 2020 - Top 5 EV Stocks To Buy (@HKD 106.50)
• Dec. 2020 - An Update On BYD Co And Their Blade Battery (@HKD 182)
• Oct. 2021 - BYD's Electric Car Sales Have Accelerated Recently - An Update On BYD Co

BYD's business, products, and sales

BYD's business is the most vertically integrated of all EV companies. They make their own batteries (they started as a battery company), semiconductors and EVs. They have investments in lithium companies and plan a US$290 million lithium cathode (LFP) factory in Chile to commence in 2025.

BYD states : "BYD’s innovative products are leaders in multiple sectors, including battery-electric automobiles, buses, medium- and heavy-duty trucks and forklifts; the SkyRail monorail system; solar power generation and energy storage systems ...... "

BYD sells globally a combination of plugin hybrid electric cars and fully electric cars, as well as many types of electric commercial vehicles (buses, trucks etc). BYD is in the top 3 electric bus sellers globally.

BYD's products range from electric cars to electric buses/trucks/vans/forklifts, monorails, charging stations, energy storage, solar etc ( source ) ( source )( source )

BYD's advantage over Tesla right now

BYD has two sales advantage over Tesla right now and that is they offer a much bigger range of electric cars, as well as more affordable models. BYD has 6 of the top 12 best selling electric cars globally in the period January-April, 2023.

In addition to BYD's established leading electric cars (BYD Tang, BYD Song, BYD Han, BYD Qin, BYD Yuan etc.) the new BYD's Ocean series is growing rapidly and likely to become a huge global seller. Some of these include the BYD Seal, BYD Dolphin, and BYD Seagull. They are all priced very competitively and the latter two are in the smaller car market.

BYD Seal ( source )

BYD Dolphin sells from an incredibly low US$16,700 in China ( source )

The new BYD Seagull is reported to be even cheaper ranging from US$8,860 to US$14,770 ( source )

BYD Yangwang premium electric cars

BYD recently introduced a premium car segment under their Yangwang subsidiary. New models include the Yangwang U8 and the Yangwang U9. These will sell at high prices in small volume and at high profit margins.

BYD Yangwang U8 (from CNY 1,098,000) (~USD 153,805)( source )

BYD Yangwang U9 (from CNY 1 million) (~USD 140,733) ( source )

BYD's global electric car sales

BYD now sells approximately 1 in every 5 'plugin' electric car sold globally and 2 in every 5 in China.

Quoted from Trend Investing's EV monthly news for June 2023 :

BYD is currently ranked the number 1 globally with 21.9% market share YTD (Jan-May 2023). BYD is ranked number 1 in China with 36% market share in May 2023.

BYD is the number 2 globally for 100% electric cars, behind Tesla ( TSLA ).

As shown in the chart below BYD and Tesla are way out in front of their peers in terms of global sales.

BYD and Tesla are dominating global plugin electric car sales in 2023 (Jan-May, 2023) ( source )

BYD's sales are surging higher in 2023, but can they exceed 3 million in 2023?

In 2022 BYD sold 1,863,494 plugin electric cars (including 911,140 BEVs ). Their target for 2023 is 3.0-3.6 million new energy vehicles ("NEV's").

In the first 5 months of 2023 (Jan-May) BYD sold 996,533 plugin electric cars. Then in May they sold an estimated 239,092 NEVs (China only). In June they sold 253,046 NEVs. If they achieve a 250,000 per month average over the last 6 months of 2023 they will reach about 2.7 million sales in 2023. Given that H2 sales are always much stronger it looks quite possible BYD will reach 3 million sales in 2023.

Valuation

BYD Co has a market cap of CNY 743b (~US$103b) and zero net debt.

BYD [HK:1211] 2023 PE is 31.5 , 2024 PE is 22.6, 2025 is 17.0. 2023 dividend yield is forecast at 0.47%. 2023 net profit margin is estimated at 3.78% , 2024 at 4.22%, and 2025 at 4.71%.

Analyst's consensus is a 'buy' with a price target of CNY 316 , representing 35% upside.

We rate BYD Co an 'accumulate'.

BYD Co's financials and forecast financials ( source )

BYD Co. latest key news (global expansion of sales)

BYD's news below gives just a small example of how active the company is. It also helps reveal BYD's massive global expansion of sales for their plugin electric cars, following in the footsteps of their global electric bus sales. BYD's cars are not yet available in USA, but their buses are and are built in Lancaster California.

• July 4, 2023 - Landmark in the history of cars in Brazil: BYD arrives in Bahia
• June 30, 2023 - BYD Introduces BYD DOLPHIN in Brazil, Sparking a New Wave of Electrification
• June 25, 2023 - The First Batch of Newly Designed BYD Showrooms Grandly Opened in Mexico
• June 9, 2023 - BYD Unleashes FANG CHENG BAO, A New Brand that Specializes in Professional and Personalized Identities
• May 12, 2023 - BYD unveils Two New Full-electric Vehicles to Spanish Consumers at Automobile Barcelona 2023
• May 3, 2023 - BYD in Association With Andor Corporation Enters Ecuadorian Zero Emission Passenger Vehicle Market
• April 18, 2023 - BYD Presents Several New Models at Auto Shanghai 2023
• March 30, 2023 - BYD Pure-Electric Vehicles Debut in Spain
• March 27, 2023 - BYD receives “Top Brand PV Storage Europe” industry seal
• March 24, 2023 - BYD Debuted Its Ocean Series Models at Expomovil 2023 in Costa Rica
• March 21, 2023 - BYD Thailand Debuts Standard Range BYD Dolphin at the 44th Bangkok International Motor Show
• March 17, 2023 - BYD New Energy Passenger Cars Premiere in Uzbekistan
• March 17, 2023 - BYD Partners with Al-Futtaim in UAE
• July 21, 2022 - BYD Hits the Japanese Passenger Vehicle Market with Three EV Models - Atto 3, Seal, Dolphin

You can view more BYD news here .

BYD Seal, Atto 3 (Yuan), Dolphin ( source )

Risks

• EV adoption rates may stall or sales may slow. Other legislative changes may impact the EV sector. For now the tougher vehicle emissions rules in China from July 1, 2023 may be a potential tailwind for BYD in H2, 2023.
• Increasing competition especially in China where competition is fierce. BYD is still reliant on China sales, but is rapidly expanding globally. BYD has had some troubles penetrating Europe sales and does not sell electric cars in USA (perhaps due to anti-China issues etc).
• Battery or supply chain shortages. BYD produces their own batteries and have significant sources of lithium supply, with new ones in planning.
• BYD Co has small net profit margins, but they are forecast to improve. This may not eventuate. An EV sales price war may negatively impact this or higher costs.
• Sovereign risk - BYD Co is a Chinese company, so country risk is higher.
• Business risks - Management, debt, and currency risks.
• The usual stock market risks (liquidity, sentiment, currency etc.). Best to buy on the local exchanges in China (Shenzhen or Hong Kong). The BYD US listings do have reasonable liquidity.

Further reading

• EV Company News For The Month Of June 2023
• April 2023 - China EV maker BYD to build $290 million battery component plant in Chile
• April 2023 - BYD Presents Several New Models at Auto Shanghai 2023 .....including B-class pure electric SUV, Song L concept car, BYD Seagull, BYD Chaser 07, Yangwang off-road SUV U8 and its supercar U9....
• All New 2024 BYD YangWang U9 Supercar can reach 100km/h in 2.0 seconds (video)

BYD Song L Concept Car ( source )

BYD Chaser 07 ( source )

Conclusion

It seems that there is no stopping BYD. The Company is way ahead of its Chinese peers in all respects and is only second to Tesla for global battery electric sales ("BEV", 100% electric) and leading Tesla for global 'plugin' sales (BEV + hybrid). BYD's electric buses are already sold all over the world and now their electric cars sales are expanding globally (except USA).

BYD has several key advantages including vertical integration, battery manufacturing, large electric car product range at most price points and types, electric buses/trucks/vans/forklifts/monorails etc, numerous other clean energy products (solar, stationary energy storage etc), and the ability to rapidly increase production volumes.

BYD's electric car sales are targeted to reach an impressive 3-3.6 million new energy vehicles ("NEV's") in 2023, compared to Tesla at 1.8-2.0 million . If BYD hits their upper range and Tesla their lower range it would mean BYD sales would end up being double Tesla's in 2023. It would also be a near doubling of BYD's sales in 2023 compared to their 1.86 million sales in 2022. BYD's global expansion is also helping to boost their sales and potentially help margins.

Trend Investing's view continues to be that Tesla and BYD are by far the top two global electric car companies. They are both also leading other areas such as the booming stationary energy storage market.

BYD does carry risks being a Chinese car company. Please read the risks section.

BYD's valuation looks attractive on a 2024 PE of 22.6, especially given the company's strong revenue growth rate and track record to date. Analyst's consensus is a 'buy' with a price target of CNY 316 , representing 35% upside. We rate BYD Co. an 'accumulate'.

Please read the risks section.

All comments are welcome.

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