Warren Buffett-backed BYD pops more than 5% after Chinese EV maker forecasts surging profits

Shares of Chinese electric carmaker BYD rose Tuesday after the company forecast a huge jump in profit for the third quarter.

Late Monday, the Warren Buffett-backed firm said net profit in the three months to Sept. 30 is estimated to be between 5.5 billion yuan to 5.9 billion yuan ($764.5 million to $820 million), a rise of 333.6% to 365.11% versus the same period last year.

BYD’s Hong Kong-listed shares were 5.6% higher in afternoon trade.

“In the third quarter of 2022, despite the complex and severe economic situation, the spread of the pandemic, extreme high temperature weather, high commodity prices and other unfavorable factors, the new energy vehicle industry continued to accelerate its upward trend,” BYD said in a statement.

The company said sales volume of its new energy vehicles, which include electric cars, “continued to reach record highs” helping boost market share and “driving significant improvement in earnings and effectively relieving the pressure on earnings brought by the rising prices of upstream raw materials.”

A number of electric carmakers from Tesla to BYD to have been grappling with the rising cost of raw materials, such as lithium, that are critical to batteries.

From the start of the year to the end of September, BYD has sold 1.18 million new energy vehicles, trumping Tesla’s figure of just over 900,000 deliveries.

BYDs various models are among the top-selling new energy vehicles in China which is the world’s largest electric car market.

While the Shenzhen-headquartered company has remained fairly resilient in the face of headwinds such as a resurgence of Covid in China and a slowing economy, its smaller rivals have faced difficulties.

In August, Chinese electric car start-up Xpeng reported weak vehicle delivery guidance for the third quarter.