China's economy headed downward as lockdowns tighten
Hong Kong (CNN Business)BYD, the Warren Buffett-backed Chinese electric vehicle maker, had a bumper month in the world’s largest car market, despite strict Covid lockdowns that have disrupted production and sales for many of its major rivals.
The company reported Tuesday that its sales of electric vehicles and plug-in hybrids soared 313% in April from the same month a year ago. The Shenzhen-based carmaker sold a record number of 106,000 units last month in mainland China.
BYD was already off to a strong start to the year.
Sales for all its vehicles jumped 423% in the first quarter of this year, according to preliminary figures released last month. It is the second largest carmaker in China in terms of pure-EV sales, just behind Tesla (TSLA).
The stellar performance in April showed that BYD is “totally resilient from the Shanghai City lockdown and [the] sector’s supply chain disruption,” wrote Citi analysts on Tuesday.
That’s thanks to its “vertical integrated supply chain,” they added. Apart from vehicles, BYD is a major manufacturer of both batteries and automotive chips, which it uses in its own cars and also sells to other auto makers.
This integrated business model made the company less vulnerable to supply chain disruptions during China’s ongoing lockdowns, while rivals had to cut back production because of chip and battery shortages.
Nio (NIO) said Sunday that it delivered only 5,074 vehicles in April, down 49% from March. The company had to suspend production for a few days last month as Covid restrictions hit suppliers in Shanghai, Jiangsu, and Jilin.
At least 27 Chinese cities are under some degree of Covid lockdown, affecting around 180 million residents, according to CNN’s latest calculations last week.
Li Auto also recorded a 62% plunge in car deliveries for April, compared with March, citing “supply chain problems.” In a statement on Sunday, Shen Yanan, co-founder and president of the company, said that some of its suppliers had stopped production entirely as Covid cases surged in the country.
“This had a great impact on our production for this month, resulting in delays in the delivery of new cars,” he said.
Tesla, which ranks first among pure-electric brands in China, hasn’t revealed its April sales data yet, but it will be closely watched given that it had to suspend production in Shanghai for a few weeks, starting March 28.
Elon Musk’s EV maker reported strong sales for March — it delivered 65,814 cars from its Shanghai factory, up 85% from a year earlier.
The company restarted production on April 19 — according to state-owned Xinhua, and even wrote a letter to the Shanghai government expressing its gratitude, according to Reuters.
Source: Read Full Article