BYD Financial Report: Operating Revenue in 2024 to be 777.102 billion yuan, a year-on-year increase of 29.02%

Only three months into 2025, BYD's revenue capabilities have once again shocked the automotive industry.

Recently, BYD released its 2024 financial report. The financial report shows that BYD's operating income in 2024 was 777.102 billion yuan, a year-on-year increase of 29.02%; the net profit attributable to shareholders of the listed company was 40.254 billion yuan, a year-on-year increase of 34.00%. In US dollars, BYD's sales last year exceeded the 100 billion US dollar mark, surpassing Tesla (2024 revenue of 97.7 billion US dollars) for the first time in history.

In BYD's business structure, the automobile sector remains the basic plate, contributing 79.45% of the overall revenue, a significant increase of 27.70% from 2023. The revenue from mobile phone components, assembly and other product businesses covers the remaining 20.54%.

The revenue growth is inseparable from the support of high sales volume. In 2024, BYD's annual sales reached a new high, exceeding the annual sales target with 4.2721 million vehicles, a year-on-year increase of 41.26%, and the 10 millionth new energy vehicle rolled off the production line in November 2024.

It is worth noting that the financial report data shows that BYD Auto's gross profit margin will reach 21.02% in 2024, a year-on-year increase of 0.63 percentage points. This figure is higher than that of competitors such as Ideal (19.8%), Xiaomi (18.5%) and Tesla (17.9%).

From a vertical perspective, BYD's net profit per vehicle in 2024 will also increase to 8,500 yuan from 8,000 yuan in 2023. As the first to overturn the price table, the gross profit margin of the automobile business has not been affected, but has achieved unexpected growth. BYD's unique ultra-vertical supply chain and self-research capabilities have played an indispensable role in this.

The unexpected growth in gross profit margin can be traced back to the supply chain reform in 2024, which is an accelerator BYD has buried for itself.

012024 of Change

BYD carried out a large-scale and in-depth cleanup of its supply chain in mid-2024. This adjustment eliminated the original agents, and BYD's procurement department will connect directly with suppliers, saving the expenses of middlemen. For BYD, this means that it can buy supply parts at a cheaper price and achieve ultimate cost reduction, while for suppliers, there is more profit space.

According to Li Xin, a person close to BYD, BYD's supply chain originally had supply agents, that is, in addition to the supplier link, there was an additional link that played the role of middlemen, BYD-agent-supplier, and the unwritten rule of "middlemen making a profit from the price difference" naturally applied to this link. "Originally, the agent spent 30 yuan to purchase a component from the supplier, and then quoted the price to BYD at 80 yuan."

He added, "Now that suppliers and BYD are cooperating directly, suppliers sell to BYD for 50 yuan. BYD's costs have been reduced, and suppliers' profits have increased."

In response to this, a listed supplier that has cooperated with BYD gave its response, “Among all my clients, BYD currently has the highest profit.” The effect of the change to eliminate agents has been most quickly reflected in this supplier.

However, according to feedback from many suppliers, such transmission benefits are currently only transmitted to larger suppliers. Zhang Tao, a BYD supplier, told Leifeng.com that BYD's current requirements for products are getting higher and higher. They were not so strict before, especially in the second half of 2024, when the requirements were comprehensively raised. The surface treatment and delay tests of some parts are benchmarked against luxury car standards, but the prices cannot be raised. In response, some suppliers can only make concessions on the "bottom price" to retain orders, get orders first, and then find ways to remove redundant cost space.

He Bin, a person close to BYD, gave a corresponding explanation, "BYD is very large in scale, so naturally it needs a supply chain that matches its capital costs and production costs sufficiently. Small suppliers without scale have relatively little room to reduce redundant costs. Suppliers with economies of scale are more suitable for large-volume business like BYD."

Li Xin said that in addition to eliminating redundant links to reduce costs and increase efficiency, this transformation has also seen significant changes in BYD's supply chain management. "By the end of 2024, after the supply chain transformation, a new product category will require at least 27 personal signatures to enter the BYD system, and a more stringent approval system has been implemented within procurement. After clearing out unnecessary links, BYD's procurement and supply chain management has also become more rigorous, scientific and transparent."

As a supplier, Zhang Tao also mentioned that "BYD has introduced many policies to eliminate corruption. Now our contact with BYD procurement is done through email. Before entering the system, suppliers will not know who the auditor is or who is responsible for integration, which improves the previous corruption problems such as interest transfer caused by "meet first, communicate first".

"Some suppliers even said, "Now when suppliers go to BYD to purchase, they have to go to a designated place and go through layers of approval. Suppliers cannot form groups with internal personnel privately. Once discovered, they will be immediately blacklisted. Being a supplier to BYD is like being a spy."

Li Xin revealed to Leifeng.com (official account: Leifeng.com) that when BYD introduces a new project (new supplier), the first step is for both parties to communicate to confirm whether it meets the requirements and whether there is a willingness to cooperate. Only then will it go to the meeting, which is what the above-mentioned supplier calls the approval process. The Procurement Department, the Central Quality Department, the Central Review Department and other departments implement a one-person-one-vote veto system to review the supplier's industry ranking, registered capital, company social security number, whether there are disputes, quality accidents, big-name cooperation, whether they have been blacklisted, wage arrears and other dimensions. Suppliers are required to have strong skills in both business capabilities and their own qualifications. This form of evaluation is similar to Huawei's jury system.

Based on these changes, Li Xin believes that "BYD now wants to learn from Toyota and treat suppliers well. The keynote of supply chain reform is to continuously reduce the number of suppliers, give mainstream original equipment suppliers a larger share and better prices, and survive together with suppliers in 2025 when close combat is needed everywhere."

A person close to BYD believes that "the competition between car companies is essentially a competition between supply chains and logistics, and BYD has already rectified its supply chain in 2024, and its ambition to fight in 2025 has long been evident."

In addition to "fighting for every penny" in terms of cost and "transparent and orderly" in terms of management, BYD has also adopted a younger attitude in terms of personnel management optimization. According to an insider, after streamlining the procurement process and replacing a large number of personnel, BYD directly promoted some front-line R&D engineers to procurement supervisors. "Many of BYD's internal procurement personnel are from R&D and understand both technology and supply chain."

Feng Tao, a BYD employee, also told Leifeng.com in 2024 that BYD has a department that hired last year's (2023) outstanding fresh graduates as section chiefs. The company is indeed implementing a younger cadre system, and many of the original old employees have been transferred to become technical experts. According to financial report data, among the age structure of R&D personnel, employees under the age of 30 account for 68.55%.

Li Xin believes that the new generation of managers, as they enter the workplace for the first time and have more opportunities and more substantial salaries, will have a significantly enhanced cultural identification with the company and a greater sense of career responsibility. Young organizations also mean fresh blood, which is beneficial to improving the efficiency and innovation capabilities of the organization.

This reform, which covers many aspects including cost, management, and personnel, is thorough and decisive, and its results can be seen in the 2024 annual report. The gross profit margin for the whole year of 2024 was 21.02%, an increase of 0.63 percentage points from the previous year in 2023.

02Evolution in 2025

The continuous increase in gross profit margin has gradually formed a butterfly effect within BYD.

After reducing costs and increasing efficiency at the back end of the supply chain, sufficient profits have been brought to the front end. At present, BYD's cash reserves have reached 154.937 billion. Sufficient cash reserves also allow BYD to have more "investment" capabilities and bring greater benefits in return.

A more obvious change in 2024 is that BYD is all in intelligent driving. The rapid launch of the Eye of God is largely due to the high investment and attention paid to intelligent driving internally.

In terms of capital investment, BYD will continue to maintain high-intensity R&D in 2024, with R&D investment of approximately 54.2 billion yuan, a year-on-year increase of 35.68%. Looking at the mainstream car companies that have announced annual reports, Tesla's R&D investment is 21.9 billion yuan, Geely Automobile 15.89 billion yuan, NIO 13.04 billion yuan, Ideal 11.07 billion yuan, and Xpeng 6.46 billion yuan. BYD's R&D investment exceeds that of many of the above-mentioned car companies.

The size of the R&D workforce will also continue to expand, from over 100,000 at the end of 2023 to over 120,000 at the end of 2024, a year-on-year increase of 18.2%.

Some industry insiders believe that a large part of BYD's sales in 2024 will come from the moment when "electricity is cheaper than oil". In the price war, BYD's sea of ​​​​cars strategy and supply chain advantages have brought strong enough potential energy, but when it comes to intelligent driving, everyone's first reaction is still the new forces, and few mention BYD, which has the largest R&D investment.

BYD’s internal national intelligent driving project (Eye of God) was launched in September 2024. After establishing the concept of "intelligent driving technology is available to everyone", BYD's intelligent driving layout has entered the fast lane.

Zhang Kai, an internal employee, told Leifeng.com, "When we were working on intelligent driving last year, we took it very seriously and planned it very tightly. We had half a day off on New Year's Eve and New Year's Day, and everyone worked overtime the rest of the time, so that we could produce products as soon as possible after the New Year. Yang Dongsheng, the director of the New Technology Research Institute in charge of intelligent driving, also worked overtime with employees, distributed red envelopes on site, and even served tea and water. The team from top to bottom attached great importance to it."

"After the project started, the pace was very fast. Many times, at 12 o'clock in the middle of the night, everyone was still discussing improvement plans in the group or doing tests at the testing site. They were all working around the clock and wanted to get it done as soon as possible." An internal engineer lamented to Leifeng.com at the "Eye of God" press conference.

After intensive preparations in the second half of 2024, the Eye of God was released as scheduled on February 10 after the new year, and received high attention from the market. On February 14, BYD (002594.SZ) stock price rose by more than 4% during the session, once again reaching a historical high, and its market value exceeded one trillion yuan.

In addition, in just three months since the beginning of the year, BYD has held a number of technology launch conferences, including "Eye of God", "Lingyuan Car-mounted Drone", "Super e Platform and Megawatt Flash Charging", etc., with the first and last two conferences only 36 days apart.

Judging from the close pace of issuing multiple technology cards, BYD intends to break away from last year's "price war" mentality and hopes to rely on new technologies in the technology pool to build a higher moat and reconstruct the rules of automobile competition. By creating multiple leading technology labels such as "smart driving equality" and "charging as fast as refueling", it will expand the brand's competitive advantage. The most sensational "smart driving equality" is also considered by the industry to be an operation that "turns a shortcoming into a long one."

As early as the first half of 2023, at an internal meeting of BYD, Chairman Wang Chuanfu had already determined that intelligent driving upgrade would become one of BYD's core strategies.

However, from the outside world's perception, BYD's progress in the past two years was not ideal. Taking Denza as an example, in 2024, it launched a newly designed sedan product "Z9", equipped with "Yisanfang" chassis, "Eye of God" intelligent driving capabilities, etc. From another level, BYD's intelligent driving has actually been implemented on some models of the Denza brand.

In the early days, the Eye of God did not become a label of BYD Tang to gain market attention. A big part of the reason was the sales problem of the BYD Tang series. Due to the certain deviation between BYD Tang's positioning and BYD's main user group, as well as the trust deficit of new technologies, some new technologies failed to attract users to pay for them, which was obviously insufficient compared with high-end brands with a closer price range (Hongmeng Zhixing will deliver 445,000 vehicles in 2024 and Ideal will deliver 500,000 vehicles).

Last year's financial report data also provided some evidence. In 2024, BYD sold a total of 4.27 million new vehicles worldwide. Among them, Dynasty Network and Ocean Network, which focus on the mass market, are still the main forces. In 2024, Dynasty Network's sales volume was 2.09 million vehicles, a year-on-year increase of 40.7%, and Ocean Network's sales volume was 1.94 million vehicles, a year-on-year increase of 40.8%.

Among the "mid-to-high-end" brands, BYD sold 126,000 new cars, BYD sold 7,454 cars, and BYD sold 56,000 cars. The three major brands sold a total of 190,000 cars. The sales of mid-to-high-end brands only accounted for about 4.4% of BYD's total sales.

To a certain extent, it can be seen that BYD's development of mid-to-high-end products is obviously somewhat unbalanced. The side effects of price wars and brand solidification brought about by mainstream products have also been reflected in BYD's high-end product sales and new technology innovation. After laying the groundwork in 2024, BYD's path in 2025 points to equal rights and high-end development of intelligent driving.

Yang Dongsheng once mentioned in a media interview, "We have made a lot of efforts in high-end brands and continuously enriched the matrix of domestic luxury new energy vehicles. When high-end cars are impacting upward, intelligent driving is a must."

According to Wandian Auto, the mainstream-priced Dynasty and Ocean will account for 94.7% of total sales in 2024, while BYD expects these two brands to account for about 80% of total sales in 2025. This also means that BYD's mid-to-high-end brands Yangwang, Denza and Fangchengbao will have to bear a higher sales growth and proportion.

In addition, the overseas sales will also be BYD's growth engine in 2025. BYD disclosed in its financial report that BYD will export 433,000 vehicles in 2024, a year-on-year increase of 71.8%. In 2025, BYD will set its overseas sales at 800,000 vehicles, a growth rate of 91.8%, which is twice as much as in 2024.

BYD said in its financial report, "Our new energy vehicles have entered 6 continents and more than 100 countries and regions around the world." In 2024, BYD's two car transport ro-ro ships, "EXPLORER NO.1" and "BYD CHANGZHOU", set sail smoothly in January and November respectively, providing it with stronger sea transportation capabilities. In June last year, the first batch of mass-produced new energy models of BYD's Uzbekistan factory officially rolled off the assembly line; in July, the Thai factory was officially completed and put into production. With relatively smooth overseas localization construction, the proportion of export revenue in 2024 will increase from 19% in 2023 to 28%, and the overseas market will become BYD's second growth curve.

According to media reports, Wang Chuanfu said at an investor communication meeting the day after the financial report was released that overseas factories including Indonesia and Hungary will be completed and put into production in 2025, which will drive sales growth in overseas markets. Markets less affected by geopolitics will continue to work hard, and will continue to deepen markets including South America, Southeast Asia, Europe and Australia, and plans to build new overseas factories. Although the North American market is large, there are no plans to enter it in the short term.

In the first two months of 2025, BYD's overseas sales surpassed Chery, becoming the No. 1 exporter among Chinese auto groups, creating a good situation for BYD's overseas goals in 2025. According to data recently released by BYD, BYD's total sales target for 2025 is 5.5 million vehicles. As the first growth curve, the domestic market needs to achieve a target of nearly 4.7 million vehicles, which is a 30% increase from 2024.

Public data shows that BYD's cumulative sales in the first two months of 2025 were 614,000 vehicles, and there are still 4.886 million vehicles left to achieve the annual target. BYD needs to achieve an average monthly sales of 488,600 vehicles in the remaining 10 months to achieve its goal.

Since the second half of 2024, the domestic new energy penetration rate has exceeded 50% for several months. The incremental market for new energy vehicles is shifting from "pioneering the blue ocean" to "intensive cultivation of the red ocean". It is not easy to achieve another 30% growth on the large base of over 4.27 million vehicles in 2024.

BYD, which has been at the top for three consecutive years, is still looking for room for growth.