Analyzing the Reasons of BYD's Low-Profit Margin Through Financial Data

In recent years, the new energy vehicle industry has developed rapidly. This article took Build Your Dreams (BYD), the leading company of new energy vehicles in China, as the investigation object to explore the reasons for its low profit margin while its sales volume and sales volume are far ahead in the industry. Based on the relevant financial data of the past three years, this paper analyzes the reasons for BYD's low profit margin. It turned out that the issues were mainly due to the high operating costs, the large proportion of R&D expenses, and the high proportion of government subsidies to operating profits. The research further gave reasonable suggestions for optimizing profit margins for these three aspects. Firstly, to reduce costs by reducing raw material costs, operating costs, and various expenses. Secondly, to continuously develop new patented technologies to improve the company's competitiveness in the industry, improve product quality, and increase sales to increase operating income. Thirdly, to make full use of government subsidies and reduce dependence on them to improve the company's profit margin. Through the discussion of BYD's low profit margin, this paper hoped to play a certain practical guiding role for BYD in optimizing the profit margin and promoting the development of the enterprise.