BYD's new energy vehicle (NEV) sales dropped sharply in February compared with January, and the Chinese New Year holiday is a very important reason. Beyond that, analysts believe there are other factors behind the decrease, but they will all be short-lived.

In a report released today, Essence Securities attributed BYD's February sales decline to four factors:

The Chinese New Year holiday led to a significant pullback in production and sales.

Many people didn't return to their hometowns for the Chinese New Year in 2021 due to Covid-19 prevention and control requirements, so there was no wave of car buying before the Chinese New Year.

BYD Han's January delivery volume was 12,100, creating a high base effect.

The DM-i model will be launched in March, and BYD is systematically reducing the production and sales of the existing DM3.0 series models.

The team expects that with the resumption of work and production after the Chinese New Year, demands of the new energy vehicle will also recover and BYD's production and sales are expected to return to normalcy, especially for popular models such as Han and Tang.

BYD's data released on Thursday showed that its new energy vehicle sales in February were 10,355 units, down 48.68% from 20,178 units in January.

BYD's cumulative new energy vehicle sales from January to February were 30,533 units, up 207.30 percent year-on-year.

Essence Securities believes that the first model of the BYD DM-i platform, Qin Plus DM, will be officially launched on March 8, and the model is currently receiving a lot of attention in various mainstream auto communities in China.

As of March 4, BYD Qin Plus was ranked No. 5  in daily topic trend in the new energy section of Auto Home's website, surpassing Tesla Model Y, the team noted.

According to BYD's previously announced plan, other DM-i models (Song and Tang) will also be launched in mid-to-late March, and Essence Securities believes that the DM-i series will hopefully bring in more sales than expected once they are launched.

(Source: BYD)