China China's BYD, Backed By Warren Buffett, Pips Elon Musk's Tesla To Become Number One In Global EV Sales

[xizhimen]

China's BYD Pips Elon Musk's Tesla To Become Number One In Global EV Sales​

by Amit Mishra
-Jul 8, 2022 05:27 PM +05:30 IST

• Shenzhen-based BYD sold 641,000 cars in the first six months of the year, 300 per cent higher than the year before, and ahead of Tesla’s 564,000.

BYD — short for “Build Your Dreams” — the Chinese auto giant backed by American business magnate Warren Buffett's Berkshire Hathaway, has dethroned Elon Musk's Tesla as the world's biggest electric vehicle (EV) producer by sales, signaling China's rising dominance over the sector.

Tesla, which is headquartered in Austin, Texas, and had occupied the numero uno slot for three years, was this week forced to hand back that crown to one of the industry’s least known brand.
Sales Figure

According to the half-year sales figures published earlier this week, Shenzhen-based BYD sold 641,000 cars in the first six months of the year, 300 per cent higher than the year before and ahead of Tesla’s 564,000.

In achieving this remarkable feat, BYD managed to overtake Tesla before Volkswagen, Ford or General Motors, each of which had made this a public goal.

“They are looking increasingly like the Toyota of China’s electric vehicle industry,” said Michael Dunne, a former GM executive and China industry expert.

High levels of vertical integration — it has its own battery and energy storage divisions and a computer chip unit — a background in battery making and a good deal of patience have all made the group a formidable up and coming competitor in the global car industry.

Slowdown At Tesla
Tesla, along with a clutch of Chinese EV makers including Li Auto, Xpeng and Nio, were harder hit by the supply chain and sales disruptions in China due to Coronavirus lockdowns than BYD, which benefited because most of its factories are not based in the regions and cities that suffered the most severe restrictions.

Shanghai, the location of Tesla’s biggest factory in China, was locked down for two months. Data provider EV-volumes estimated the lockdown cost Tesla between 80,000 and 100,000 vehicles. BYD, however, was less affected because most of its production is in the southern Shenzhen region.

However, this stroke of good fortune bestowed by geography belies BYD’s longer-term advance as a serious competitor not only to Tesla but carmakers around the world.

How Did It Start?
Founded by former university professor Wang Chuanfu in February 1995, BYD started out as a manufacturer of rechargeable batteries before expanding into the car industry in the early 2000s. Like other manufacturers in the region, including South Korea’s Hyundai, the group initially developed its business by “reverse engineering” cars from established brands, before developing its own models.

However, unlike other established manufacturers from China, such as FAW and SAIC, BYD is not state owned. The company is listed in Hong Kong and Shenzhen Stock Exchanges, with revenue and market capitalisation each exceeding RMB 100 billion.

The company also has significant private backers including Warren Buffett’s Berkshire Hathaway which bought a stake in 2008 and now owns about 8 per cent of the company.

While it has not been without setbacks — the company is being investigated by authorities in China about the effects of harmful pollutants used in paint, BYD’s breadth of in-house expertise, particularly in batteries, has been the key. BYD’s manufacturing prowess was illustrated early in the pandemic when it rapidly developed a division to make face masks. It went from zero to being one of the largest mask suppliers in the world in less than five months.

Battery Prowess
While much is being reported about BYD’S EV success, the company’s stellar success in its battery unit often misses the mark.

According to Bernstein Research, BYD now has about 10 per cent of global capacity for EV battery production. The company currently has 80 gigawatt-hours of battery plant capacity — twice of 2019 levels, and is expected to reach 185 gigawatt hours by 2025.

“They used to be a battery company that incidentally had a hand in making cars, but have now begun to blossom. It helps that they make the batteries. Who owns the batteries owns the crucial supply chain, and BYD is way out in front in that regard," said Dunne.

It is worth mentioning that BYD and local rival Contemporary Amperex Technology (CATL) are among the most competitive battery producers in the world with their scale and technology underpinning lower costs.

BYD has also overtaken South Korea's LG as the world's second-biggest producer of EV batteries, behind China's CATL. According to Seoul-based SNE Research, BYD has outpaced LG Energy in terms of monthly market share since April.

Going Global
While Tesla is a household name across the globe, BYD is little known for now in international markets. BYD’s sales are heavily concentrated in its domestic market — it exported only 3,300 BYD vehicles in the first five months of 2022, it has significant international ambitions.

It already sells electric buses in Europe, Japan and India, and is taking steps to launch car models in Europe, Australia, Latin America and the Philippines.

The company recently signed a deal with the Netherlands car dealership Louwman for its first European launch. It has also been signing up dealerships in south-east Asia, particularly in Thailand, offering dealers a higher share of profits than other brands, according to people with knowledge of the details.

Chinese Dominance
Despite poor presence in the export market, executives recognise it is only a matter of time before this changes and China becomes a big deal in the global EV market.

China, the world's largest car market, exported more than half a million EVs in 2021, more than double from the year prior. Yet about a third of China's exports into Europe were Chinese-owned European brands, such as Volvo and MG Motor, while just 2 per cent represented Chinese brands, according to researchers at the Mercator Institute for China Studies, a Berlin-based think tank. Nearly half were from Tesla and the remaining 14 per cent were from European joint ventures in China.

However, BYD has plans to change that. Tu Le, managing director of advisory group Sino Auto Insights, said BYD was "firing on all cylinders", with products covering many critical EV market segments. He also expected BYD would soon challenge foreign automakers on their home turf, especially in the US. "They're going to make some really aggressive moves to go international," he said.

China's BYD, Backed By Warren Buffett, Pips Elon Musk's Tesla To Become Number One In Global EV Sales

Shenzhen-based BYD sold 641,000 cars in the first six months of the year, 300 per cent higher than the year before, and ahead of Tesla’s 564,000.

swarajyamag.com

 

[Jagdflieger]

It would be very interesting to see BYD's true balance sheet.

I have driven two of it's models - great quality and comfort for 240,000Rmb = US$ 30,000-35,000
A comparable Western car (produced in China) sells at minimum for 500,000+Rmb = US$ 65,000-75,000

 

[xizhimen]

China’s BYD was written off by Elon Musk. Now it’s beating Tesla​

The Shenzhen-based electric carmaker sold more than 641,000 vehicles in the first half of 2022.

By Kyle Mullin
Published On 28 Jul 202228 Jul 2022

Beijing, China – The Chinese company that this month dethroned Tesla as the world’s top seller of electric cars is no household name.

BYD, founded in 1995 by entrepreneur Wang Chuanfu, has little brand recognition outside China despite selling some 641,000 pure electric and hybrid vehicles in the first half of 2022 – nearly 80,000 more than its Texas-based rival.

But for Tony Fu, the owner of a BYD Tang PHEV hybrid since 2015, the Shenzhen-based company’s roaring success is no surprise.

“Its prices are much better than Tesla’s,” Fu, who lives in Shanghai, told Al Jazeera.

“And it has more models. Now domestic [Chinese] brands offer more choice – so no wonder the sales of BYD are better than Tesla’s.”

BYD’s spectacular rise comes despite years of naysaying about the quality and safety of China’s electric vehicles, underscored by staggeringly high recall rates across the industry that have at times exceeded 10 percent.

Among the most prominent critics was Tesla CEO and co-founder Elon Musk.

“Have you seen their car?” Musk said in a Bloomberg interview in 2011. “I don’t think they make a good product.”

A little over a decade later, Warren Buffett-backed BYD is not only outselling Tesla, but also travelling on a more promising trajectory – although the two companies defy “apples to apples” comparisons as many BYD models are hybrid electric vehicles, while Tesla’s models are all fully electric.

The Chinese firm reported sales growth of 315 percent in the first six months of the year, compared with 46 percent growth for the former number one.

China’s BYD was written off by Elon Musk. Now it’s beating Tesla

Shenzhen-based electric carmaker sold more than 641,000 vehicles in the first half of 2022.

www.aljazeera.com

 

[xizhimen]

China powers ahead in electric car race. Half of China’s 500,000 EV exports last year were sold to Europe​

• Manufacturers such as BYD, Xpeng, Nio and Li Auto have already conquered the domestic market for EVs and are fast becoming global players

Published: 11:42pm, 7 Aug, 2022

Tesla is the name most associated with electric cars, but the American company has been overtaken by Chinese rival BYD for sales. That should come as no surprise given China’s booming demand for clean-energy vehicles and surging exports.

The nation accounts for almost 60 per cent of global production and is emerging as the world’s factory for EVs. Coupled with also being the leader in smartphone and liquid crystal display manufacturing, 5G telecommunications and artificial intelligence, Beijing’s push to become a powerhouse of technology and innovation is well on track.

Shenzhen-based BYD, which is backed by Warren Buffett’s Berkshire Hathaway, sold about 641,000 EVs in the first six months of the year compared to Tesla’s 564,000. BYD’s figures rose more than 300 per cent from the same period in 2021, while the increase for Tesla was 46 per cent.

China accounts for an estimated 40 per cent of Tesla’s sales and its output was disrupted by the two-month Covid-19 lockdown in Shanghai, where its Chinese production facility is based. BYD’s factories are located in places that largely avoided severe disruption from the nation’s tough policies against the coronavirus.

Half of China’s almost 500,000 EV exports last year were sold to Europe, where demand increased fivefold. BYD entered the global market last week by shipping an initial batch of 1,000 Atto 3 sport utility vehicles to Australia, the first car the company has designed and made for overseas buyers.

Beijing’s focus on the sector has ensured aggressive promotion at home and abroad and models from leading EV makers such as Li Auto, Nio and Xpeng are fast gaining in brand recognition.

Domestic incentives, in line with Beijing’s push for only new-energy vehicles to be sold by 2035 with half to be electric, is driving mainland sales.

Chinese efforts to be a major player in the global EV market extend to battery production and recharging infrastructure. Such expertise is necessary to gain a foothold and encourage drivers to turn away from fossil fuel-powered vehicles.

The greater the production, the more costs will come down and increase competitiveness. Convincing motorists and transport companies to make the switch is vital if global climate change goals are to be met.

Opinion | China powers ahead in electric car race

Manufacturers such as BYD, Xpeng, Nio and Li Auto have already conquered the domestic market for EVs and are fast becoming global players.

www.scmp.com