BYD aims for new frontier with $233,000 sportscar

The Warren Buffett-backed company targets deliveries for the Lamborghini-esque, two-door coupe in mid-2024. (Photo: Reuters)
The Warren Buffett-backed company targets deliveries for the Lamborghini-esque, two-door coupe in mid-2024. (Photo: Reuters)

Summary

BYD’s launch of a $233,000 sports car underscores the Chinese electric-vehicle maker’s ambitions to boost its market share across the buying spectrum.

BYD’s launch of a $233,000 sports car underscores the Chinese electric-vehicle maker’s ambitions to boost its market share across the buying spectrum, and its hopes that higher returns for luxury models can lift its bottom line.

The world’s largest EV maker by sales on Sunday debuted its U9 model, the second offering under its premium Yangwang brand. It is BYD’s most expensive vehicle yet at 1.68 million yuan ($233,483).

The Warren Buffett-backed company targets deliveries for the Lamborghini-esque, two-door coupe in mid-2024. At a launch event, the company demonstrated the car’s unique suspension system, whereby it can lift each corner independently, and touted its sports-car credentials: the U9 has a top speed of 309 kilometers an hour and can reach 100 kph in 2.36 seconds.

The U9’s rollout comes as BYD, best known for its budget-friendly cars in China, seeks to capture more of the high-end market, even as EV sales slow globally and competitors in China trim prices to attract consumers at a time of macroeconomic uncertainty.

BYD on Feb. 18 said it plans to unveil several luxury vehicles this year and beyond, aiming to achieve a “leading position in the high-end market." Its premium brands Yangwang, Denza and Fangchengbao “have significantly enhanced the company’s profitability," it said.

Nomura analysts said in a recent research note that the company has guided for 20% of its revenue to come from its luxury brands this year, up from 12% in 2023.

Daiwa analyst Kelvin Lau said that while the U9’s pricing is slightly higher than an expected range of CNY1.0 million-CNY1.5 million, “you can expect higher and higher [revenue] contribution from [BYD’s] high-end brands."

BYD’s sales have been rising amid the rollout of new models and the recent price cuts, helping it dethrone Tesla as the world’s biggest EV maker in the final quarter of 2023. It has plans to launch new models with potentially lower pricing under the BYD brand later this week.

Just before the launch of the U9, BYD also kicked off another round of the monthslong price war by slashing the starting price of its new plug-in hybrid models to CNY79,800, down CNY20,000 from previous versions.

Those cuts are likely a “strategic move to grab more market share from traditional internal-combustion-engine segment" rather than clearing inventories, Citi analyst Jeff Chung said in a recent note.

BYD’s stock has yet to benefit from rising sales, as China’s markets have been roiled by concerns of slowing consumption and inflation risks.

BYD’s chairman on Sunday proposed to double the size of its China-listed share buyback, helping lift Shenzhen-listed shares to a 1.8% gain. That beat a 0.4% rise in the benchmark Shenzhen Composite Index, but shares remain down 6.1% this year and 30% over the past 12 months.

Write to Sherry Qin at sherry.qin@wsj.com

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