Copyright © BusinessAMBE 2023
BYD, a Chinese electric car manufacturer, sold more electric cars than rival
In the news: BYD sold more electric cars than
- The Chinese manufacturer sold 526,409 EVs in that period, compared to 484,507 for its American rival.
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Over all 2023, however,
Tesla remains in the lead: BYD sold 1.57 million (+73%) EVs compared to 1.81 million (+38%) models forTesla . Either way, BYD is puttingTesla in the lead, having already caught up in the third quarter. - One last point to clarify: if BYD's hybrid models are included, the Chinese manufacturer is again far in the lead, with 3.02 million models sold (up 62% year-on-year).
Musk was wrong, not
Details: A surprise for Musk.
- In 2011, the
Tesla founder was absolutely unafraid of what was then a small manufacturer. "Have you seen their car?" joked Musk. "I don't think it's particularly attractive, the technology is not very good. And BYD as a company has serious problems in its home market inChina . I think their goal is, and rightly should be, to make sure they don't die inChina ." - Since then, Musk has completely changed his mind: "That was years ago. Their cars today are very competitive."
BYD's secrets
The gist: How did BYD become so successful?
- BYD was founded in 1995 by Wang Chuanfu in
Shenzhen , in southernChina , the country's technological center. Initially, the Chinese company produced lithium-ion batteries. This was its first success: the market for cell phones and then smartphones was about to explode. - BYD turned its attention to the automotive sector in 2003. Two years later, the company launched its first internal combustion engine car, the F3. The first electric car, the F3DM, came 3 years later, in 2008.
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That same year,
Warren Buffett invested$230 million in BYD. It was a real boost for the company: the spotlight was now on the Chinese manufacturer. - BYD then had a competitive advantage in the Chinese market: its expertise in batteries. The company began designing an LFP (lithium iron phosphate) battery, the Blade, even though no one really believed in this technology. The industry thought this type of battery had too low an energy density and weighed too much in relation to the energy it could deliver. But the Blade was a success. The battery was sold en masse to other manufacturers.
- Another good decision by BYD was not to focus solely on 100 percent electric vehicles. The brand continued to offer hybrid vehicles, allowing it to fill its coffers at a time when the 100 percent electric segment was still a reluctant industry.
- Moreover, and crucially, BYD manufactures most of its own parts and does not rely on other companies for spare parts. This vertical integration allows BYD to offer electric cars at lower prices.
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Finally, BYD has been able to take advantage of a favorable subsidy environment. These subsidies began around 2009, when BYD wanted to expand its fleet of electric vehicles. Without
Beijing's support, the Chinese manufacturer would not be the global powerhouse it is today. For example, it is estimated that BYD received the equivalent of$4.3 billion in support between 2015 and 2020.
Global expansion
Now what? Conquering the world.
- BYD has conquered the Chinese market. Now it must conquer the world. And that won't be easy: Chinese electric cars have a pretty good reputation, but will Americans and Europeans be willing to let go of brands that in some cases have been known for nearly a century?
If General Motors ,Ford ,VW ,Mercedes ,BMW and Audi plunge all the way into electric cars, will BYD be able to find a place for itself? -
BYD recently arrived in
Europe andBelgium . So in our regions, the manufacturer has yet to begin its advance. InSoutheast Asia , on the other hand, BYD already has a 43 percent share of the electric vehicle market. -
In
the United States , BYD also faces a major challenge. Consider, among other things, the introduction of the IRA, which supports the (domestic) green sectors in which electric car manufacturers operate. -
But whatever happens, BYD's global conquest will only continue, and undoubtedly faster than
Tesla's . You have to pinch yourself to believe it: in 2020, BYD sold 130,970 electric vehicles. Three years later, that number will have increased tenfold. (ns/cv)
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