Buoyed by sizzling sales in mainland China, the world’s largest electric vehicle (EV) manufacturer BYD is looking to crack open the European market with plans to build local factories on the continent.
“We will check the possibility of building local factories in Europe based on our business progress,” the Shenzhen-based carmaker said in a statement to the Post on Thursday, confirming a Bloomberg report, that it would build one or two plants there, citing executive vice-president Stella Li.
The company, backed by Warren Buffett’s Berkshire Hathaway, would not reveal further details about the timeline, location or capacity of any factories.
BYD dethroned Tesla as the world’s largest EV maker in the second quarter of this year and has been extending its lead over the US-based carmaker ever since, spurred by soaring sales at home, the world’s largest EV market.
However, building a name will be a challenge in Europe, where BYD is little known.
“BYD has to convince drivers outside China that it is a world-class carmaker,” said Eric Han, a senior manager at Suolei, an advisory firm in Shanghai. “Without considerable sales volume abroad, it is not a strong international player.”
Founded by Chinese billionaire Wang Chuanfu in 1995 as a battery producer, BYD has been making vehicles since 2003. It mainly sells cars in mainland China, but is also looking to secure footholds in overseas markets in Asia, Europe, and South America.
Under its “Made in China 2025” industrial strategy, Beijing wants the country’s top two EV makers to generate 10 per cent of their total sales overseas by 2025, although it did not specify the companies.
Analysts said BYD would be a top Chinese candidate to turn itself into a global EV powerhouse.
Berkshire paid US$232 million for 225 million BYD shares, equivalent to 20.5 per cent of its Hong Kong-listed stock, during the global financial crisis of 2008, which it held onto until this year.
On August 24, Berkshire sold 1.33 million shares at an average of HK$277.10 (US$35.60) apiece, valuing the sale at HK$369 million, according to a regulatory filing to the Hong Kong stock exchange.
Berkshire sold BYD shares several times later but remains a large shareholder, owning 15.99 per cent of the company, according to exchange data.
BYD outsold Tesla for the first time in April to June of this year, delivering 355,021 pure electric and plug-in hybrid cars, or about 40 per cent more than its US-based rival. It went on to sell 538,704 units between July and September, 56.7 per cent more than Tesla’s deliveries in the same period. Tesla does not make hybrid vehicles.
In November, BYD set a new sales record for the ninth consecutive month, delivering 230,427 units, an increase of 5.8 per cent over October’s 217,816 units, it said in an exchange filing.
Tesla’s Gigafactory in Shanghai assembles the Model 3 and Model Y vehicles, which start at about 300,000 yuan (US$43,030) after Tesla cut their prices in October by 5 and 8.8 per cent, respectively. The US carmaker delivered a record 100,291 vehicles from the Shanghai plant in November, 40 per cent more than the 71,704 units shipped out in October.
Worries about economic turbulence and job security this year have deterred thousands of middle-class consumers from buying premium electric cars, instead turning to cheaper models priced below 200,000 yuan, said Tian Maowei, a sales manager at Yiyou Auto Service in Shanghai.
Most BYD models are priced between 100,000 yuan and 200,000 yuan.
In mid-October, the company launched its first passenger vehicle in India, the Atto 3 electric sport utility vehicle, to reinforce its global push.
The company is now selling its cars in multiple overseas markets including Norway, Singapore and Brazil.
BYD is also considering building a battery plant in the US but does not currently plan on selling its electric cars there, according to Bloomberg.
Keyword: Chinese electric-car maker BYD eyes production in Europe as it widens lead over Tesla as world’s largest EV builder