BYD's average profit per vehicle improved by about RMB 2,700 in the third quarter from the second quarter, driven primarily by scale advantage, analysts said.

After non-recurring gains and losses, BYD expects third-quarter net profit of RMB 8.61 billion to RMB 10.51 billion, representing year-on-year growth of 61.29 percent to 96.9 percent.

According to Essence Securities, as China's new energy vehicle (NEV) penetration rate rises and competition intensifies, some second- and third-tier automakers with weaker products are expected to be accelerated out of the market, and industry concentration is expected to continue to rise.

BYD has strong cost control capabilities through vertical integration of the industry chain, the team said, adding that the company also gained stronger bargaining power over upstream and downstream firms by relying on the scale effect.

As the competition landscape improves, BYD's advantages are expected to become more prominent, and profitability is expected to improve, the team said.

($1 = RMB 7.3050)

BYD expects Q3 net profit to rise as much as 69% from Q2