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recently, many listed car companies have released financial report data for the first half of the year, and byd has become the "most eye-catching kid" among them.

although everyone passedbyd's car sales in the first half of the year increased by 28.5% year-on-year, with cumulative sales exceeding 1.61 million vehicles. we have already guessed that its financial report will be quite beautiful. however, byd's "report card" for the first half of 2024 still surprised many people and also surprised many people. many colleagues are very envious.

according to byd’s financial report, byd group’s total revenue in the first half of the year reachedapproximately 301.126 billion yuan, a year-on-year increase of approximately 15.76%, and net profit was approximately 13.631 billion yuan, a year-on-year increase of 24.44%, of which automobile-related business income was 228.317 billion yuan, a year-on-year increase of 9.33%.

and thanks to the success of high-end models such as yangwang and fangbao, byd's automotive business gross profit margin is as high as 23.97%, a year-on-year increase of 3.3%, which puts it in a dominant position in the automotive industry.

however, while core data have surged, byd's bicycle profits have declined, from 8,600 yuan in 2023 to 8,500 yuan in the first half of this year. with the overall financial report data increasing and a number of high-end models on the market, this performance of declining bicycle profits is quite unusual.

if you are familiar with byd's car-building logic, it is not difficult for you to understand this situation. because byd has always insisted on "technical equality" and provides good cars that most people can afford. byd will not hide advanced technology, but will quickly promote it to the most mainstream products, share r&d costs through "small profits but quick turnover", and will quickly reflect the cost dividends brought by the technology in the terminal price. by using technological progress to promote sales and then recovering costs through high sales, byd has achieved the unification of high technology and high cost performance.

generally speaking, continuous lowering of product unit prices and declining bicycle profits mean that there is a problem with the company's operating conditions, because selling cars is the core revenue of car companies. just like ideal, even though it delivered its best financial report in history in the first half of this year, its stock price plummeted due to lower bicycle prices and profits. but when it comes to byd, everyone can maintain an optimistic attitude.

the secret lies in byd's vertical supply chain. by extending the industrial chain upstream, even if the price of the car is driven down due to a price war, as long as the sales volume is good enough, the scale effect can be fully utilized and reasonable profits can be earned in the entire industrial chain, allowing the company to maintain good development. momentum.

so why don't other car companies copy byd's work? don't you want to? the answer is actually hidden in another key figure in byd's financial report - research and development expenses.

byd knows how to burn money

a very cruel fact is that although many car companies today promote self-research, in fact, the research and development expenses of most car companies are still lower than their marketing expenses. moreover, most of the companies with higher r&d expenses are new forces whose model architecture and supply chain are relatively immature. among traditional car companies, only byd's r&d investment is much higher than its marketing investment.

although the specific items included in marketing expenses and r&d expenses are different due to inconsistent statistical calibers, this data does not most truly reflect the proportion of capital investment, but it can also reflect byd's emphasis on r&d. what can more intuitively reflect byd's "innovation-based" philosophy is the ratio of its r&d investment to net profit.

in the first half of the year, byd made a total of 13 billion yuan, the highest among chinese listed car companies. however, during the same period, it invested even more money in research and development, reaching 20 billion yuan. byd is not only making the most money, but also spending the most on research and development.

moreover, the fact that byd's r&d expenses are higher than its net profit is not just after the sales situation has improved in recent years. from 2011 to now in 2024, byd's r&d investment has been higher than its net profit for 13 years.to date, byd has invested more than 150 billion yuan in research and development, a figure that even exceeds the market value of many car companies.

innovation is king

from the investment in r&d, we can see that byd's success is not only due to the dividends of the times, but also because wang chuanfu identified this track from the beginning. in fact, starting in 2002 and 2003, byd began to invest heavily in research and development funds for power batteries and hybrid technology respectively. even if new energy vehicles are not recognized by the market for a long time, with only input and no output, byd makes money by manufacturing mobile phone screws, and is determined to "maintain" new energy vehicles.

by 2020, byd's technology accumulation finally achieved a qualitative change. it successively launched blade batteries and dm-i super hybrid technology, which quickly detonated the market. sales increased by nearly 80% in 2021, becoming one of the most important drivers of the electrification of china's automobile industry.

in the past year, byd has ushered in a technological singularity. dm5.0 has brought the fuel consumption standard of plug-in hybrid vehicles to the "2 era". yunnian technology and yi sifang technology have achieved precise control of suspension and motor torque. byd has also created the qin series and song series that are popular in the mainstream market, as well as the dengshi, yangwang, fangbao, etc. that have achieved breakthroughs in the high-end market.

and from the bottom-level batteries and power semiconductors to the upper-level smart cabin systems, cloud chassis, yi sifang electronic control, etc., byd has mastered a full-stack self-developed technology system that is not afraid of being "stuck".

in a sense, byd's most important significance to china's auto industry is not to allow independent car companies to become the number one sales volume in china's auto market, but to develop a set of chinese standard auto industry systems through independently innovative new energy technologies.

as a late-developing country in the automotive field, china has long been in the shadow of foreign car companies. technically, china has relied on others. hardware such as engines and gearboxes, and software such as vehicle control systems have all faced endless patent barriers from foreign countries.

now seizing the opportunity of the transformation of new energy vehicles, china has established its own technical system, and has even reversed the market and technological status of autonomous vehicles in china compared with german, japanese, and american vehicles. these are all due to the long-term and sustained efforts of a group of chinese car companies that are actively innovative, such as byd.

write at the end

what byd has broken is not only the technical barriers that hinder the development of china's automobiles, but also the ideological stamp of the automobile industry that independence is inferior to introduction.

automobiles are a technology-intensive industry, and market competition should be a technology competition. however, over the past two decades, as advantages can be gained by simply importing mature overseas technologies, the chinese auto market has become more focused on marketing than r&d, and manufacturing is not as important as buying. the success of a group of car companies that have long insisted on self-research, such as byd, has made more chinese car companies, as well as foreign car companies betting on china, finally wake up and begin to invest heavily in local research and development, which has played a role in tracing the origin of the market trend. effect. it is precisely because of this that in the past two years we have been able to see china's new energy vehicles flourish and the depth and breadth of self-developed technology continue to improve.