BYD expects 1st-quarter net profit to fall as government reduces EV subsidies
BYD Co. estimates that its first-quarter net profit fell 24 to 35 percent year on year as the central government reduced subsidies for electric vehicles.
In the first three months, BYD's profit ranged from 550 million yuan to 650 million yuan ($80 million to $94 million).
The Shenzhen-based automaker has invested heavily in battery-electric cars and plug-in hybrid vehicles. But Beijing imposed stricter EV standards in 2016 after several companies skirted the subsidy program, and it cut subsidies by 20 percent this year.
Sales of EVs and plug-in hybrids fell nearly 31 percent in January and February.
"Changes to new energy vehicle (NEV) subsidy policy will affect the first quarter, [and] the EV industry will have a short-term adjustment," the automaker said in a filing with the Shenzhen exchange.
"The group's NEV business will come under a certain pressure, and NEV sales and profits are expected to decline."
BYD's annual net profit rose 79 percent to 5.1 billion yuan in 2016. But analysts expect earnings to grow only 8 percent this year.
The Shenzhen-based automaker has invested heavily in battery-electric cars and plug-in hybrid vehicles. But Beijing imposed stricter EV standards in 2016 after several companies skirted the subsidy program, and it cut subsidies by 20 percent this year.
Sales of EVs and plug-in hybrids fell nearly 31 percent in January and February.
"Changes to new energy vehicle (NEV) subsidy policy will affect the first quarter, [and] the EV industry will have a short-term adjustment," the automaker said in a filing with the Shenzhen exchange.
"The group's NEV business will come under a certain pressure, and NEV sales and profits are expected to decline."
BYD's annual net profit rose 79 percent to 5.1 billion yuan in 2016. But analysts expect earnings to grow only 8 percent this year.
