On February 8, 2024, BYD electric vehicles are piled up waiting to be loaded onto a ship at the international container terminal of Taicang Port in Suzhou, Jiangsu Province, eastern China.
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in competition with tesla Chinese automaker for the global electric vehicle market BYD Despite rising barriers to the U.S. market, the company is focused on expanding overseas.
The Shenzhen-based company has already been tested in a number of countries, and in many cases has achieved immediate sales success, just one year after entry.
Given policy uncertainty surrounding China’s EV exports to major markets such as the US and Europe, BYD is aiming to expand overseas sales by moving production to regions deemed more friendly. The company already has factories in Thailand, Brazil, and Indonesia. Preparations are also underway for Hungary and Uzbekistan.
“They’re targeting countries that don’t have very strong domestic auto industries,” said Xiao Feng, a research analyst at CLSA. “Recent developments in the United States highlight the need for such an approach,” he said. .
Last month, the Biden administration announced it had begun investigating whether Chinese-made cars pose a national security risk and raised the possibility of regulating them. The United States is trying to support the spread of electric vehicles domestically, but its sales penetration rate is far below China.
BYD is moving rapidly, starting with Thailand, with its first factory outside China expected to be operational by the end of this year. The company overtook Toyota to take the top spot in passenger car sales in Thailand in January, despite having no sales just a year ago, according to MarkLines data.
Once the Thai factory is operational, it will also serve other parts of Southeast Asia. EY predicts the region’s electric vehicle market will grow rapidly to at least $80 billion a year. Contribute to sales over the next 10 years.
BYD has established itself as Southeast Asia’s best-selling EV brand, capturing more than a third of the market last year after selling few cars there, according to data from Counterpoint Research. did.
Advantage over Tesla
BYD sold 70,000 electric vehicles in Southeast Asia last year, gaining a 35% market share and leading its competitors. VinFast and Tesla, according to data from Counterpoint Research.
One of BYD’s advantages over Tesla is its large number of products in the mass market and its combination of hybrid and battery-powered vehicles. Tesla exclusively manufactures battery-only cars at higher end prices. Having a hybrid option is beneficial for emerging markets where battery charging infrastructure remains limited.
Southeast Asia is BYD’s strongest overseas market in the short term as BYD pursues its goal of doubling its car exports to 500,000 units in 2024 from last year, according to Alvin Liu, an automotive analyst at Canalys. It is likely that it will continue to be a market.
“Southeast Asia’s EV market is still in its infancy and needs to develop consumer habits,” Liu said. He added that “value for money” is particularly important, and BYD’s Atto 3 and Dolphin models are sold at very competitive prices in the region.
The company is also investing $1.3 billion to build an electric vehicle factory in Indonesia in 2024. Local media reported this in January. This year BYD also reportedly plans to significantly increase the number of stores in Singapore and the Philippines.
The company did not respond to requests for comment on the reported plans.
Although BYD does not break down capital investment by country, it has revealed that automotive-related capital investment in the first half of 2023 will be 81.52 billion yuan ($11.33 billion), which is higher than the total reported for the full year of 2022. This is almost twice the current amount of 45.94 billion yuan.
Also in contrast to Tesla’s direct sales model, BYD often relies on local distributors and partners for sales outside of China.For example, in the second half of 2022, BYD will Sales agreement with Sime Darby Motors In Malaysia.
plans for the americas
BYD is expanding its operations in Brazil and eyeing Mexico, which borders the United States, as China’s electric vehicle dominance comes under increasing U.S. scrutiny.
Stella Lee, CEO of the Americas told Reuters BYD is considering plans to build a factory in Mexico and begin selling electric vehicles there.
Bill Russo, founder and CEO of investment advisory firm AutoMobility, recently told CNBC’s “Squawk Box Asia” that if BYD were to build a factory in the country, it would mean “the Americas He said that it has the potential to become a “beachhead for the future.”
“Mexico is part of the USMCA, so there’s probably an opportunity to export from Mexico to North America,” he said, referring to the free trade agreement the United States, Mexico and Canada established in 2020.
BYD has no plans to sell passenger cars in the U.S., Lee said. reportedly At the end of February.
The automaker did not respond to requests for comment on this story.
China remains BYD’s largest market. Of the more than 3 million new energy passenger vehicles produced by the company last year, more than 242,000 were exported overseas.
The rapid growth of BYD and other Chinese electric car companies is causing concern for other automakers as well.
In February, the American Manufacturing Alliance released the following report: Report a warning He called on the U.S. government to prematurely block imports from Mexico, saying low-cost imports from China could be an “extinction-level event for the U.S. auto sector.”
That comes just weeks after a company release confirmed that BYD is significantly ahead of Tesla in terms of car production.
Europe and other markets
The global push toward electrification presents potential market opportunities for Chinese automakers, especially as domestic growth slows.
Liz Lee, Associate Director at Counterpoint Research, said, “BYD will not lose market share to U.S. and European automakers, and will continue to build infrastructure and accelerate the spread of EVs for long-term sustainable growth.” We need to look for further overseas opportunities in other regions.”
BYD announced the following late last year. open a factory It was announced in January that production would begin in Hungary. Start in 3 years.
The news comes just months after the European Union announced an investigation into the role of subsidies in Chinese-made electric cars.
BYD also sells cars in Australia, the Middle East and Africa, and in January Produced in a jointly owned facility in Uzbekistan.
