A heated price war in China's NEV sector late last year and incentives offered by BYD to dealers may have dragged down profits.

BYD (HKG: 1211, OTCMKTS: BYDDY) saw its net profit slip in the fourth quarter of 2023 from the previous quarter, despite record sales and revenue, likely dragged down by a year-end price war that heated up.

The new energy vehicle (NEV) maker reported record revenue of RMB 180 billion ($24.9 billion) in the fourth quarter of 2023, up 15.14 percent year-on-year and up 33.56 percent from the third quarter, according to its earnings report released today.

Previously released figures showed that BYD sold 944,779 NEVs in the fourth quarter, up 38.24 percent year-on-year and up 14.66 percent from the third quarter.

BYD reported a net profit of RMB 8.67 billion in the fourth quarter, up 18.66 percent year-on-year but down 16.70 percent from the third quarter.

This could be due to the heating up of the price war in China's NEV industry late last year, as well as BYD's incentives for dealers.

In November and December last year, BYD offered official purchase discounts on a number of models, including the Seal, Song Plus, Chaser 05, Frigate 07, Han, and Tang, with discounts as high as RMB 20,000 on some models.

In addition, BYD sold 3,024,417 NEVs in 2023, reaching its target of 3 million units.

After reaching its sales target, BYD was expected to reward dealers with RMB 2 billion, local media outlet Yicai said in a January 2 report, citing several people familiar with the matter.

($1 = RMB 7.2187)

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