China’s largest electric vehicle (EV) maker, BYD Co. Ltd. (HK:1211), is set to give out 2 billion yuan as incentives to its dealers for meeting sales targets in 2023. The news comes a day after BYD reported stellar vehicle delivery numbers for the fourth quarter and full year 2023. BYD sold 3 million units of pure EVs and plug-in hybrids in 2023. Further, BYD, for the first time, outpaced American rival Tesla (NASDAQ:TSLA) in global EV sales in Q4 2023, selling 944,779 autos, including 526,409 battery EVs.
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Details of BYD’s Deal with Dealers
Reports suggest that BYD had promised to pay a bonus of 666 yuan per car sold to each dealer for meeting the sales targets in 2023. The number 666 is considered auspicious in Chinese culture. Based on the 3 million vehicles sold in 2023, the amount could run into 2 billion yuan of cash bonus for the year. Chinese media house Yicai was the first to report on BYD’s dealer incentives yesterday.
BYD has been consciously expanding its presence in China, especially the lower-tier cities. The carmaker has established a large network of dealers to boost its sales across the mainland. As of October 2023, BYD had over 3,400 stores in China selling its Dynasty and Ocean model vehicles. Notably, BYD has a sound financial position, earning 21 billion yuan in the first nine months of 2023. The company’s dealer incentive scheme appears to be a smart move amid intense competition in the Chinese EV space.
Is BYD a Good Stock to Buy Now?
With seven Buys and one Hold recommendation, 1211 stock commands a Strong Buy consensus rating. On TipRanks, BYD Co. Ltd. share price target of HK$323.98 implies 54.7% upside potential from current levels. BYD shares have gained 4.4% in the past year.
