Since its initial Roadster debut in 2008, Tesla has dominated the market for electric cars. With 23% of the EV market at the end of 2020, Elon Musk’s California-based company recently made history by becoming the first automaker to reach a $1 trillion market valuation.
On the other hand, competitors want to speed up their own EV initiatives to dethrone Musk’s business as the leading producer. BYD, which Warren Buffett’s Berkshire Hathaway backs, is also a battery manufacturer that has grown into a significant electric car brand in China, with some of its models competing with Tesla in popularity.
BYD has so far surpassed most competitors in the market for new energy vehicles, such as hybrid and battery-powered automobiles, and has risen to the third spot among Chinese manufacturers in terms of passenger car sales.
Bloomberg reports that BYD is on the verge of joining the club of companies with a trillion yuan in market capitalization for its production resilience and the government’s consumption incentives, which have sparked a rally. Hey guys, join me as we take a look at BYD. This company is rapidly expanding due to increased sales of its electric vehicles and its insane plan to dominate the electric vehicle industry.
With 20 people and a $300,000 start-up investment, BYD, which stands for “Build Your Dreams,” was established in 1995 as a producer of cell phone batteries.
In less than five years, it has become the largest producer of rechargeable batteries for mobile phones, supplying Nokia and other significant mobile phone manufacturers. BYD used its expertise in batteries to build hybrid and all-electric vehicles after purchasing a failing automaker in 2005.
Being the largest manufacturer of rechargeable batteries in the world3, BYD has made EVs more cost-effective and can go farther than most of its rival EV producers. This is possible because of the company’s vertical integration.
The Chinese manufacturer can take advantage of its in-house battery technology, which enables far lower production costs than rivals. As Chinese electric cars are poised to dominate the worldwide sector, the manufacturer focuses on other international markets.
BYD’s battery technology uses less expensive materials than the industry norms of cobalt and nickel and instead constructs its batteries using much more plentiful materials like iron and lithium. The “blade” design of the trademark batteries and the materials used to make them enable them to store 50% more energy than batteries of comparable size.
BYD also sold 113,768 new energy passenger cars in May of this year, as evidenced by the data, despite Covid lockdowns that negatively impacted supply chains and customer sentiment in China. According to data from the organization, the company produced two of the top three best-selling new energy vehicles in China last month, whether they were SUVs or smaller passenger cars.
No room was left for Tesla, Nio, or Xpeng. Following FAW-Volkswagen, which sold 150,009 vehicles, BYD is now in second place in China’s entire passenger car market as a result of those sales. The joint venture between the German automaker and the Chinese government known as FAW-Volkswagen sells cars under the Volkswagen and Audi brands.
In contrast to FAW-Volkswagen, whose sales decreased 10.6% from May of previous year, BYD’s sales increased by 159.5% year over year. With 73,315 sales, Geely fell 14.5 percent to place third in terms of passenger cars. BYD’s sales of passenger cars placed it in 13th place last year. The top three manufacturers were SAIC GM, SAIC VW, and FAW-Volkswagen. Tesla however missed the top three slots in the U.S. market for passenger cars.
According to Sino Auto Insights, Toyota leads the industry in terms of sales, followed by Ford and the Chevrolet brand of General Motors. As per the data, FAW-Volkswagen had the most sales for the first five months of the year, followed by BYD and Changan Automobile. BYD came out on top among new energy vehicles, followed by SAIC Motor and the joint venture between General Motors and Wuling Motors.
Third-placed was Tesla China. The fact that BYD no longer manufactures passenger cars with internal combustion engines as their exclusive source of power makes their sales statistics all the more significant. That indicates that all of the cars it sold in May were either plug-in hybrids or entirely electric.
Therefore, it should come as no surprise that it accounted for two of the top three bestselling new energy models in China last month. The Qin, an entry-level electric sedan from BYD, outperformed well-known ICE and hybrid models like the Honda Accord and the Toyota Camry and Corolla took the fourth position in the list of the top 10 bestselling electric and ICE cars between January and May. Its Song model outsold Tesla’s Model Y during the same period, dominating the list of top 10 SUVs of all types.
BYD is gaining from its sole concentration on EVs, but legacy automakers are still struggling with the switch from internal combustion engines to batteries. After selling extremely few units, the company canceled its ICE product lines in April.
Analysts claim that as Chinese consumers become more interested in EVs, the market share of ICE automobiles is decreasing. Because it can rely on its supply chain, BYD has fared better than its competitors in enduring the production setbacks brought on the Covid lockdowns.
The Guangdong province in southern China serves as the production base for the Shenzhen-based company, which began producing EVs in the early 2000s. The company also manufactures its own batteries. Because supplies of batteries and other parts dried up and costs rose, lockdowns in Shanghai crippled many of its rivals, including Tesla, Nio, and Li Auto in April and May.
Additionally, BYD has started a new round of battery plant construction and is in discussions to sell some components to competitors like Tesla. In April and May, the foundations for two plants with a combined annual output capacity of 37GWh in the eastern Zhejiang province were broken by FinDreams, a battery manufacturer that was spun off from BYD.
In the northeastern city of Changchun, a 45GWh massive battery facility is also under construction.Starting Point Institute of Research, a Shenzhen-based EV and lithium battery consultancy, estimates that BYD’s total usable battery output will reach 200GWh in 2022.
But why did BYD do so well? First, according to industry observers, BYD’s increasing sales are due to both a stronger domestic market for plug-in hybrid vehicles and the company’s capacity to provide a variety of plug-in hybrid models.
BYD’s performance, according to CPCA secretary general Cui Dongshu, was boosted by recent increases in oil costs, which have led to a rise in plug-in hybrid popularity across the nation. Plug-in hybrids, in Cui’s opinion, are generally more energy-efficient than gasoline vehicles and significantly less expensive than all-electric vehicles. Traditional automakers lost market share to BYD, a prominent competitor in the industry.
The only Chinese manufacturer that offers a full range of economical and luxurious sedans, hatchbacks, and sports utility vehicles is BYD. Tu Le, managing director of consultant Sino Auto Insights, stated that this is a key factor in the company’s decision to capitalize on the sharp rise in demand for all-electric and plug-in hybrid vehicles.
According to Le, another factor in their success is that BYD is the only Chinese automaker that is vertically integrated, producing its own semiconductors and batteries. He added that this could make it hard for their rivals to compete because they depend on components suppliers to ensure production.
BYD appears to be very well equipped for growth, having ramped up internal development and manufacturing the Blade Battery. In-house production and recent lockdowns also allowed BYD to escape numerous semiconductor shortages.
The selection is steadily growing and will soon have 20 vehicles (including BEV and PHEV separately). Many of them sell more than 10,000 units per month, including the Song PHEV, Qin PHEV, Han BEV, Dolphin BEV, and the upcoming Yuan BEV. EVs are in high demand and have never been more popular.
More reasonably priced EVs from entering the market are being held back by rising fuel costs, a lack of available models, a lack of used EV possibilities, and the absence of fuel emission regulations. BYD and MG plan to alter that. Do you think BYD will outdo the EV competition? Let us know in the comments down below.