E-Premium for the people
BYD wants to go with the mainstream
By Helmut Becker
March 24, 2024, 2:07 p.m
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BYD once copied Toyota. Today, the Chinese company is the benchmark in e-mobility worldwide. Tesla? VW? BYD sets the pace. Aggressive. Expansive.
A development is currently taking place in the European automobile market in which China plays a leading role. China? No, a Chinese company: BYD. The car manufacturer from the Middle Kingdom appears almost out of nowhere, an automotive outsider in the eyes of the established Western manufacturers. But with ambition, fresh ideas and attractive offers, China’s most popular vehicle manufacturer was created within a very short time – and China is the world’s largest car sales market. Whoever is ahead here is no longer an outsider.
Having long surpassed VW as the strongest-selling brand in China, BYD will also displace the industry pioneer Tesla from the global top of electric vehicle manufacturers in 2023 – in keeping with the company’s own motto “Build Your Dreams”, abbreviated: BYD. This points to the first headquarters of the company, founded in 1995 by Wang Chuanfu, on Yadi Street in Shenzhen.
Learn from Toyota…
BYD started out as a battery manufacturer, primarily for the emerging Chinese auto industry. BYD only became a car manufacturer in 2003 when it took over the insolvent state-owned car manufacturer Xian Qinhuan Automobile. His small car was quickly taken off the market due to failure, but the state license to build cars that he acquired with the purchase was retained. Initially, BYD copied successful Toyota models, but produced them as new developments without any acquisitions. Today BYD employs over 10,000 development engineers at various locations.
The business purpose was and still is the production of everything that runs electrically on the road, either battery-electric (BEV) or as a hybrid or plug-in hybrid. The construction of pure combustion cars was stopped in May 2022. The know-how lives on in hybrids. In addition to cars, the BYD program also includes electric forklifts and electric buses – both coaches and public buses. The latter operate in Bochum, Gelsenkirchen and Herne, for example.
As early as 2014, long before Tesla’s Semi Truck, BYD expanded its range to include electric trucks and the world’s first electric semi-trailer tractors. In Beijing, BYD electric trucks have been used as large-scale sweepers for street cleaning since 2016.
Aggressive expansion plans
The battery specialist BYD learned to build cars, among other things, with contract manufacturing orders from Toyota, whereby the Shenzhen engineers repeatedly managed to surprise the world cost champion Toyota with innovative, economical manufacturing solutions they developed themselves. Battery construction continued and today BYD is one of the most important battery manufacturers in China.
Only slightly behind Tesla when it comes to pure electric cars (BEVs), BYD is clearly at the top of the world when it comes to BEVs and hybrids combined. More than three million electrically powered vehicles were sold in 2023. The group is now one of the ten largest car manufacturers in the world. And the Chinese electric dragon’s soaring is not over yet. BYD has aggressive expansion plans up its sleeve. For example, the first plug-in hybrid model is to be launched for the European market with the help of the luxury brand Yangwang. The design comes from Wolfgang Egger. The former Audi manager has been responsible for BYD’s lines since 2017.
The goal is therefore clear. BYD has big plans, especially in Europe. “It is our goal to become a European company,” said BYD Europe boss Michael Shu to “Automobilwoche”. Shu continued: “We have come to stay.” To this end, the market share and dealer network in Europe will initially grow, followed by a new factory in Hungary (Szeged).
The former is also necessary. In 2023, BYD sold fewer than 16,000 BEVs in Europe, including 4,139 in Germany. The market share in this country was 0.01 percent. That should now change permanently. First, BYD is aiming for a five percent market share in the European electric car market. This should happen before production is ramped up at the new plant in Hungary. Based on sales figures for 2023, that would mean a volume of 70,000 fully electric cars. If plug-in hybrids, which BYD also wants to offer in Europe, are also included, that would be a market share of five percent with almost 115,000 vehicles. A competitor would have to give up for this.
BYD is now building its planned automobile factory in Szeged. The plant is scheduled to start in 2026 with a capacity of 150,000 units per year, which can be doubled to 300,000. Only electric cars will be manufactured with battery packs made in Hungary, and all deliveries will come from local or European suppliers.
Thousands of cars arrive by ship
How seriously BYD’s export offensive is pursued was made clear to the German public in the media at the end of February: BYD’s first Giga car transporter docked in Bremerhaven, which exclusively transports the manufacturer’s vehicles. 3,000 cars roll off the boat in Germany. The “BYD Explorer No. 1” had previously unloaded 1,500 vehicles in the Netherlands.
BYD has ordered a total of eight car transporters, each with a transport capacity of 7,000 vehicles; the seven additional ships are still under construction. With its own fleet of ships, BYD wants to control the export of its vehicles itself and not be slowed down by a lack of freight capacity.
Premium on the mass market
The Chinese company’s stated aim is to be a premium brand in Europe. But even if the product is supposed to be premium, the price will be at mass market level due to the cost advantages. Shu said in “Automobilwoche”: “Our product is premium, our price is mainstream. That’s why we call it affordable premium.” Since it is well known that “stinginess is cool”, nothing should stand in the way of success with German customers.
All in all, BYD is a much more dangerous competitor in the electromobility sector for German car manufacturers, both premium and mass market, than Tesla. Because the Chinese company can do combustion engines differently than the US company, it has a wide range of brands and technologies, including state-of-the-art plug-in hybrids. While Tesla only offers electric cars with a single brand. And BYD has cost structures that are unrepresentable for Europeans. With your own production in Europe, EU import tariffs also lose their fear.