Chinese electric vehicle maker BYD's profit slumps after subsidy cuts
Chinese electric vehicle maker BYD Co Ltd, reported on Tuesday a 42% drop in 2019 profit, saying cuts in government subsidies and emissions rules changes had hit demand in the sector.
BYD, which is backed by U.S. investor Warren Buffett, said its net profit for 2019 totalled 1.61 billion yuan ($227 million), while its revenue dropped 1.78% to 127.74 billion yuan last year.
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China cut subsidies for new energy vehicles (NEV), which include battery electric, plug-in hybrid and hydrogen fuel cell vehicles, last year, making the final product more costly for carmakers.
(Also read: Toyota, China's BYD announce electric car venture)
After that NEV sales fell for nine straight months. However, last month China said it would extend subsidies for new energy vehicles and extend NEV's purchase tax exemption for two years.
The Shenzhen-based car company, which has partnerships with Japan's top automaker Toyota and German Daimler's partner in China, sold 461,399 vehicles in 2019, down 11.4% from the previous year.
In 2019, China's overall auto market dropped 8.2%, while sales for NEVs fell 4%.