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Electric cars in China

China's green-vehicle makers feel the blues as subsidies ebb

BYD's profit drops as automakers bleed cash to keep prices low amid rising sales

Chinese automaker BYD cited the withdrawal of government sales incentives as a factor in its 31% profit decline for 2018. (Photo by Takashi Kawakami)

GUANGZHOU -- China's electric vehicle makers are struggling to break their dependence on dwindling government sales incentives, with leader BYD announcing a hefty decline in net profit for 2018 on March 27 as the automaker spent heavily to keep prices attractive.

Beijing's phaseout of subsidies for new-energy vehicles has put pressure on earnings, BYD said. Net profit fell 31.6% to 2.78 billion yuan ($414 million), even as revenue surged 22.8% to over 130 billion yuan and electric-car unit sales roughly doubled to nearly 248,000. BYD's operating profit margin shrank to 3.3% last year from a peak of 5.8% in 2016 as the company shelled out to maintain its low prices.

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