(Bloomberg) — BYD shares tumbled as deep year-end discounts to hit 2023 sales targets hurt earnings even as the company overtook Tesla Inc to become the world’s largest seller of electric vehicles.
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The Hong Kong-listed shares of the electric vehicle giant fell 4% in early trading in Hong Kong on Tuesday after the company reported preliminary net profit for 2023 of between 29 billion yuan ($4 billion) and 31 billion yuan. That was lower than analysts’ forecast of 31.5 billion yuan.
The record delivery volume in the fourth quarter did not bring another huge profit. According to Bloomberg calculations, fourth-quarter net profit will be between 7.2 billion yuan and 9.2 billion yuan, down from 10.9 billion yuan in the previous quarter.
BYD’s shares have fallen 16% this year.
Like other electric car makers, BYD has faced a price war in China, the world’s largest auto market. In November, the Shenzhen-based automaker discounted its popular Qin, Han and Tang models by up to 10,000 yuan in a bid to hit its annual delivery target of 3 million units, which it slightly exceeded.
Geopolitical tensions have also taken a toll. BYD is one of three carmakers selected for further scrutiny in the European Commission’s countervailing investigation, which seeks to determine whether state support from the Chinese government gives manufacturers an unfair advantage.
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