China’s BYD (BYDDF) on Monday reported record third-quarter profits and improving margins, despite a price war for electric cars in the country led by arch-rival Tesla (TSLA).
General Motors (GM) reportedly reached a tentative deal to end a protracted strike by autoworkers. BYD shares rallied near a buy point, while GM shares hit a new multi-year low before recovering.
For the third quarter, Warren Buffett-backed BYD reported a record net profit of RMB 10.41 billion ($1.42 billion), up 82% from a year earlier and up 52% from the second quarter. This was in line with BYD’s Q3 net profit expectations of RMB 9.55 billion – RMB 11.55 billion.
Notably, BYD’s gross margin reached 22%, the highest since Q3 2020, according to CnEVPost.com. It was also up from nearly 19% in both the previous Q2 and Q3 last year, despite BYD slashing EV prices this year in response to Tesla’s cuts.
Earlier this month, the company linked its earnings power to growing economies of scale and cost control.
For Tesla, gross margins have been a concern amid price cuts, falling to 16% in Q3. Unlike Tesla, BYD also makes components for things like smartphones.
A tweet from BYD suggested that a crossover version of the Song, its best-selling electric car model, would be launched on Tuesday.
Meanwhile, several news reports said GM had reached a tentative contract agreement with the United Auto Workers union that would end more than six weeks of work stoppages.
The US auto giant and the UAW union have yet to confirm the reports.
The UAW announced its tentative labour agreements with Chrysler and Fiat parent Stellantis (STLA) on Saturday and with Ford Motor (F) last Wednesday.
BYD shares, GM shares
BYD shares, which are traded over the counter, were up 1.6% at 31.44 in today’s trading. BYD stock is consolidating below a buy point of 36.27, according to the MarketSmith chart.
Shares in General Motors reversed early losses and were up 0.5% at 27.36. GM shares hit their lowest intraday level since August 2020.
Shares of Ford, Stellantis and Tesla all fell on Monday.
On Sunday, UAW union leaders approved a tentative contract agreement with Ford. The deal reportedly includes $8.1 billion in new plant investment by the automaker, $5,000 ratification bonuses and a 25% compound wage increase.
Last week, GM and Ford withdrew their full-year forecasts. They cited the costly UAW strike.
