What you should know about BYD, the massive Chinese electric vehicle company that recently surpassed Tesla
At the end of the previous year, BYD surpassed Tesla to become the world’s largest seller of electric cars (EVs), capping an incredible ascent for the Chinese automaker.
In the three months leading up to December 31, it produced more completely electric cars than Tesla for the first time, and it cut Elon Musk’s company’s sales lead for the whole year.
Thus, what allowed a relatively unknown Chinese battery manufacturer to rise to prominence and overtake Tesla as its main rival?
BYD, a modest former scholar who is still in charge of the business, was created in 1995 and is headquartered in the Chinese megacity of Shenzhen. The initials BYD, according to Wang, stand for nothing specific. To differentiate it from other businesses, he claimed to have gone with a “rather strange” name.
It is the world’s leading manufacturer of electric cars (EVs) and ships electric buses, taxis, and other vehicles to Southeast Asia, Europe, South America, and the Middle East. It also produces plug-in hybrids, in contrast to Tesla (TSLA).
Currently, BYD’s principal international markets are Thailand and Israel, where the Chinese business leads the industry in EV sales.
The Qin and Song models are its best-selling passenger automobiles. The Qin is a small sedan that may be purchased entirely electric or as a plug-in hybrid. There is a line of small crossover SUVs called BYD Song.
Since BYD is recognized for selling cars at lower prices than Tesla, it has been able to draw in a larger customer base. In China, the base model costs slightly more than $10,000, whereas the most affordable Tesla Model 3 is priced above $32,000.
The passenger cars made by BYD are not yet offered in the US. However, the nation buys its electric buses, which are produced in Lancaster, California.
According to his official résumé in the firm’s papers, Wang, an engineer, initially relocated to Shenzhen in the early 1990s to oversee a battery manufacturing company for a government research facility in Beijing.
In China at the time, government jobs were referred to as “iron rice bowls,” a euphemism that denotes a permanent position. However, Wang left quickly and started BYD.
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His foray into entrepreneurship began at the same time when China’s economy opened to international trade. Shenzhen became the first special economic zone established by former Chinese leader Deng Xiaoping, drawing hundreds of industrial companies to the city with its open economic policies and lower labor and land costs.
Wang expanded from his modest workshop to a medium-sized mobile battery manufacturer in 1997, generating over 100 million yuan ($14 million) in sales annually.
The Asian financial crisis that year created a window of opportunity for expansion as falling battery costs forced several rivals out of business. The cost advantage allowed Wang’s firm to thrive, the Southern Weekly daily said.
In 2003, BYD emerged as the global leader in the production of nickel-cadmium batteries, which find extensive application in cellular devices.
Wang, though, desired more. Wang entered the automotive business in 2003, acquiring a state-owned carmaker in the city of Xi’an for 269 million yuan ($38 million), with an eye towards the future expansion of EVs.
As Wang subsequently detailed, the unexpected move infuriated the company’s strategic investors and precipitated a 21% decline in the company’s Hong Kong-listed shares, but he persisted.
After the share price collapse, he boldly declared, “I build cars because I am optimistic about the future development of electric vehicles,” according to state-owned Beijing Business Today.
Wang was validated just five years later in 2008 when his most well-known supporter, Warren Buffett, gave him a $230 million investment, paying around $1 per share for a roughly 10% ownership. Over the next year, the company’s shares increased by as much as 1,370% thanks to that vote of confidence.
By the end of 2008, BYD introduced its first plug-in hybrid vehicle. Since then, BYD has become a well-known EV manufacturer, in part because of the Chinese government’s encouragement of the sector.
Since 2022, Buffett has been progressively reducing his ownership of BYD, keeping a portion of the huge gains he has achieved. As of late October, Berkshire Hathaway, owned by Warren Buffett, held around 8% of BYD, per the company’s most recent filing. At this time, the value of the shares is 18.28 billion Hong Kong dollars, or $2.3 billion.
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Since surpassing its competitors both domestically and internationally in the largest automobile market globally in 2015, BYD has dominated the Chinese EV market. Price is one of its main advantages over Tesla, the second-place competitor in China.
In the US, the prices of Tesla’s four models—the Model 3, Model Y, Model S, and Model X—range from $40,000 to $120,000. The basic vehicle 3, which is the least expensive Tesla vehicle in China, starts at 229,900 yuan ($32,375). When fully charged, it can travel 272 miles and reach a peak speed of 140 miles per hour.
In contrast, the BYD Seagull costs 73,800 yuan ($10,392) upon launch in China. It can reach a maximum speed of 81 mph. There are two battery packs available for the Seagull. The bigger battery offers a range of 251 miles, compared to the smaller battery’s 190 miles.
International organizations have rated the safety of both BYD and Tesla automobiles. The Australasian New Car Assessment Programme (ANCAP) awarded the Model Y from Tesla and the Atto 3 from BYD five stars in 2022, respectively.
Lithium iron phosphate battery (LFP) “Blade Batteries” were produced by BYD in 2020 and are sold to other automakers like Toyota in addition to being used in its vehicles.
According to the manufacturer, the blade-shaped battery can make the most of the space within the battery pack since it is longer-lasting and thinner than traditional lithium iron cells. According to BYD, it also has a lower chance of catching fire, even in cases of serious damage.
German media claims that Tesla also employs BYD Blade Batteries for its Y vehicles made at the Berlin Gigafactory.
Elon Musk refuted a media story in March 2023 that said Tesla was terminating its battery supply partnership with BYD.
