BYD has bucked the trend of record high sales under heavy pressure, continuing to validate the advantage of having core components supplied by itself, analysts said.

(Image credit: BYD)

As sales of China's major new energy vehicle (NEV) companies plummet, BYD (OTCMKTS: BYDDY, HKG: 1211) has shown stunning resilience. And in the analysts' view, BYD will do even better in the second half of the year.

BYD's monthly sales were at a record high again, giving continued validation to its supply chain's strength, said a team from Huaxi Securities analyst Cui Yan's team in a research note released on Wednesday.

BYD sold 106,042 NEVs in April, up 1 percent from March and 313 percent from the same month last year, according to the company's May 3 announcement on the Hong Kong Stock Exchange.

This is the second consecutive month that its sales exceeded 100,000 units, another record high, after selling 104,878 NEVs in March.

China's auto supply chain was under pressure in April because of the Covid outbreak, and the China Passenger Car Association expects passenger car retail sales to decline 31.9 percent year-on-year that month, Cui's team noted.

BYD's sales bucked the trend of record highs under heavy pressure, continuing to validate the advantages of supplying core components by itself, the team said.

The company's factories, including the Changsha plant and Changzhou plant, have new production capacity coming online this year, and monthly production and sales climb is expected to be more pronounced in the second half of the year, Cui's team said.

Insurance registration volume data show that 56.7 percent of BYD's NEV sales in the first quarter were contributed by consumers in second- to fifth-tier cities, up from 34.9 percent in the same period last year, according to the team.

BYD's product competitiveness continues to drive the replacement of fuel vehicles by NEVs in cities that do not impose restrictions on vehicle sales, the team said.

With the introduction of new models, BYD's sales are expected to continue to grow rapidly and are expected to exceed 1.5 million units for the year, the team said.

BYD stopped production and sales of internal combustion engine vehicles in March, which Cui's team said exceeded their expectations and was ahead of the vast majority of automakers, underscoring the company's confidence in its NEV products.