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Chinese electric vehicle giant Build Your Dreams (BYD) has stolen Elon Musk-led Tesla’s crown as the world’s largest maker of electric vehicles (EVs) by sales. Shenzhen-based BYD sold 641,000 vehicles in the first half of the year, up more than 300% from the same period last year.
The Chinese giant received early support from Buffett’s Berkshire Hathaway, which invested $232 m in the business in 2008. It is one of Berkshire’s most profitable bets as the investment is now valued at $7.7 bn.
BYD’s stride to becoming a market leader
BYD has also surpassed LG in terms of monthly market share since April 2022, to become the second-largest producer of EV batteries in the world, trailing only Contemporary Amperex Technology (CATL) in China. “The performance looks impressive,” Jeff Chung, an auto analyst with Citi, told Nikkei.
Meanwhile, Tesla CEO Elon Musk has expressed his dislike for BYD back in 2011. The CEO had said — “Have you seen their car? I don’t think their stuff is really good”. Tesla has attributed the slow growth in sales to Covid-19 lockdowns in Shanghai. “Numerous important manufacturing days were lost. In addition, problems with upstream suppliers have cost numerous suppliers a significant number of production days,” Musk said during Tesla’s Q1 earnings call in May 2022.
BYD was sheltered from most Covid-19 restrictions as its factories are not based in the regions and cities that went under a lockdown, whereas Tesla and a few Chinese EV manufacturers, such as Li Auto, Xpeng, and Nio, were more negatively impacted. Tesla delivered 255,000 vehicles between April and June, down from the 310,000 it shipped in the first three months of this year.
Many of BYD’s models are plug-in hybrids, which, as per Chinese sales regulations, are considered “zero emission” vehicles. The vehicles use a sizeable battery in addition to a conventional engine for longer distances. BYD produces a variety of electric vehicles, such as cars, buses, and big commercial vehicles. It primarily sells buses in the UK and recently produced its 1,000th electric public service vehicle in collaboration with Scottish bus manufacturer Alexander Dennis.
Additionally, BYD’s supply chain is “vertically integrated,” which means that it produces more parts internally and relies less on third-party suppliers compared to its competitors, reducing the risk of supply-chain interruptions. The success of BYD’s supply chain might influence its rivals to become potential clients.
The EV giant is “firing on all cylinders,” according to Tu Le, general director of the advisory firm Sino Auto Insights, with products that address numerous crucial EV market categories. Tu Le anticipates that BYD would soon compete with foreign automakers in their own markets, particularly in the US. He predicts that “they’re (BYD) going to make some really strong moves to go global.”
China, the largest auto market in the world, exported more than 500,000 electric cars last year, more than tripling the number from the year before. A significant number of such cars were made by Chinese-owned firms including MG Motor and Volvo Cars. China is making a lot of effort to compete favourably in both internal combustion and electric vehicle markets.
The People’s Republic was primarily responsible for the global surge in electric car sales last year, according to the International Energy Agency (IEA), which aggregates data on electric car manufacturing. According to IEA, “3.3 million more vehicles were sold in China in 2021 than were sold globally in 2020.”
— Reporting by Sakshi Dahiya, edited by Sumeet Gaikwad
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