Swarajya Logo
Swarajya Logo
Politics States Economy Society Business Culture Infra Defence World Books Ideas Science Technology Heritage Archives Legal Movies Sports
  • Our Views
    Politics States Economy Society Business Culture Infra Defence World Books Ideas Science Technology Heritage Archives Legal Movies Sports
  • Magazine
  • Store

About Swarajya

Swarajya is a publication by Kovai Media Private Limited.

Swarajya - a big tent for liberal right of centre discourse that reaches out, engages and caters to the new India.

editor@swarajyamag.com

Useful Links

  • About Us
  • Subscriptions Support
  • Editorial Philosophy
  • Press Kit
  • Privacy Policy
  • Terms of Use
  • Code of Conduct
  • Plagiarism Policy
  • Refund & Cancellation Policy

Useful Links

  • About Us
  • Subscriptions Support
  • Editorial Philosophy
  • Press Kit
  • Privacy Policy
  • Terms of Use
  • Code of Conduct
  • Plagiarism Policy
  • Refund & Cancellation Policy

Participate

  • Contact Us
  • Write for us
  • Style Guide
  • Jobs

Stay Connected

  • Artboard 2 Copy 6Created with Sketch.
    Artboard 2 Copy 10Created with Sketch.
    Artboard 2 Copy 7Created with Sketch.
    Artboard 2 Copy 9Created with Sketch.
  • Andriod Logo
  • IOS Logo

Business

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

Amit MishraFriday, July 8, 2022 5:26 pm IST
A production line of EV maker BYD in Xi'an, Shaanxi. (China Daily)
A production line of EV maker BYD in Xi'an, Shaanxi. (China Daily)
A production line of EV maker BYD in Xi'an, Shaanxi. (China Daily)
  • 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.

    Also Read: How China Is Driving The Electric Vehicle Revolution At Home, Explained

    Tags
    China
    Tesla
    Ford
    Elon Musk
    Warren Buffett
    Toyota
    Volkswagen
    General Motors
    BYD
    EV
    Berkshire Hathaway
    coronavirus

    Comments ↓

    An Appeal...


     

    Dear Reader,

     

    As you are no doubt aware, Swarajya is a media product that is directly dependent on support from its readers in the form of subscriptions. We do not have the muscle and backing of a large media conglomerate nor are we playing for the large advertisement sweep-stake.

     

    Our business model is you and your subscription.  And in challenging times like these, we need your support now more than ever.

     

    We deliver over 10 - 15 high quality articles with expert insights and views. From 7AM in the morning to 10PM late night we operate to ensure you, the reader, get to see what is just right.

     

    Becoming a Patron or a subscriber for as little as Rs 1200/year is the best way you can support our efforts.

    Get Swarajya in your inbox.


    Magazine


    Swarajya Magazine Cover Image
    Merchandise

    Merchandise


      Politics

      Tamil Nadu Dashboard: ED Summons To Dist Collectors Stayed By Madras HC; Senthil Balaji Refused Bail On Medical Grounds

      Tamil Nadu Dashboard: ED Summons To Dist Collectors Stayed By Madras HC; Senthil Balaji Refused Bail On Medical Grounds

      Swarajya Staff
      11m

      State Elections: 18 Per Cent Candidates Grapple With Criminal Cases, Maximum In CPI (M), BRS Next, Reveals Report

      Nayan Dwivedi
      1h

      "At 50+, Loneliness Must Be Bothering You... Find Someone": Owaisi Hits Back At Rahul Gandhi Over 'Modi Ke Do Yaar'

      Nishtha Anushree
      6h

      Economy

      Automobile Retail Sales Hit Record 3.793 Million Units This Festive Season, Surging 19 Per Cent YoY: FADA Report

      Automobile Retail Sales Hit Record 3.793 Million Units This Festive Season, Surging 19 Per Cent YoY: FADA Report

      Nayan Dwivedi
      6h

      Public Sector Is Finally Beginning To Shine Under Modi's Ministrations

      R Jagannathan
      1d

      India's Divestment Struggles Continue As Government Falls Short Of Targeted Proceeds For Fifth Consecutive Year: Report

      Nayan Dwivedi
      4d

      Defence

      Indian Army To Upgrade Its Firepower With 200 Mounted Howitzers And 400 Towed Guns

      Indian Army To Upgrade Its Firepower With 200 Mounted Howitzers And 400 Towed Guns

      Swarajya Staff
      4h

      Islamabad, Ankara Work On Boosting Military Ties; Plan To Locally Manufacture Turkish Origin Anti-Tank Missiles In Pakistan

      Swarajya Staff
      1d

      Strengthening Capabilites In The Central Sector Opposite China, IAF Considers Acquiring Three Air Strips In Uttarakhand: CDS Anil Chauhan

      Swarajya Staff
      1d

      World

      Bangladesh: Why A Strong And Secular Opposition Is Necessary For Protection Of Hindus In That Country

      Bangladesh: Why A Strong And Secular Opposition Is Necessary For Protection Of Hindus In That Country

      Jaideep Mazumdar
      1h

      "Cheering Terrorism, Violence?": TIME Called Out For Playing Down SFJ Founder Pannun's Threat Against Air India

      Nishtha Anushree
      2h

      US Shares 'Legally Presentable' Intelligence, Canada Provides Mere 'Allegations' In Assassination Plots, Says Indian High Commissioner Verma

      Nayan Dwivedi
      6h

      Culture

      M P N Ponnusamy: A Nagaswara Legend Passes Away Almost Unsung

      M P N Ponnusamy: A Nagaswara Legend Passes Away Almost Unsung

      K Balakumar
      20m

      Streamlined Repatriation: India-US Deal To Fast-Track Return Of Stolen Antiquities

      Swarajya Staff
      1d

      Questioning Trend Of Weddings Abroad, PM Modi Bats For Local Weddings, Products To Boost Economy

      Swarajya News Staff
      2d
      States

      infrastructure


      V Bhagya Subhashini
      1

      Explained: What Is Rat-Hole Mining — Vital Technique Used In Uttarkashi Tunnel Rescue Operation

      3 Mins Read
      V Bhagya Subhashini
      2

      Karnataka: Bengaluru's Rs 377 Crore World-Class Transformation Of Yeshwantpur Railway Station On Fast Track

      2 Mins Read
      V Bhagya Subhashini
      3

      Telangana Rapid Transit: Rs 55,400 Crore Project Aims 60-Minute Connectivity Between Hyderabad And Major Cities Of State

      2 Mins Read
      V Bhagya Subhashini
      4

      Bengaluru Suburban Rail’s 452 Km Expansion Plan Derails As Railways Opposes Pre-Feasibility Study

      3 Mins Read