The China-based auto manufacturer BYD will see its annual profit fall by up to one-fifth during 2017 as the result of rising levels of competition in the hybrid and plug-in elected vehicle markets, company execs recently announced.
The rising levels of completion in the hybrid and plug-in electric vehicle (EV) sector follows the recent move by the government of China to announce EV quotas for manufacturers operating in the country.
Preceding the implementation of EV quotas, though, the country has also been slowly phasing out direct subsidies for hybrids and plug-in electric vehicles.
“BYD, which has invested heavily in hybrid and electric vehicles, forecast full-year net profit would fall by between 15.1% to 20% to a range of 4.04 billion yuan ($607.54 million) to 4.29 billion yuan, it said in filings on the Hong Kong and Shenzhen stock exchanges. Net profit in 2016 rose 80% to 5 billion yuan,” Reuters notes.
“BYD’s performance will be closely watched by other local and foreign automakers which are now scrambling to bring out new hybrid and electric models for China and creating joint ventures focused on electric cars for the market. … China’s overall car market has also slowed this year after a tax break for smaller cars was cut back.”
Notably, the filing from BYD stated that investments into other technologies, such as the SkyRail business, would “bring sound revenue and profit.”
Altogether, growth in China’s electric vehicle market remains strong, though, with the market seemingly on track to hit the 700,000 units sold target set by the government there for 2017.
On that topic, be sure to also see: “(Yet Another) Record Electric Car Month In China.”
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