Last year, Chinese company BYD overtook Tesla as the world's leading seller of fully electric cars and is poised to keep growing. Just a few years ago, BYD was merely a battery manufacturer. Now it's an automotive powerhouse. "Frankly, I think if there are not trade barriers established," said Tesla CEO Elon Musk in January, "they will pretty much demolish most other companies in the world."
BYD launched its first car in 2008, the same year that Warren Buffet's Berkshire Hathaway made a $230 million investment in the company. BYD also received $4.3 billion in state subsidies between 2015 and 2020.
How has BYD become so successful? The cars are cheap, Fortune said. "No one can match BYD on price. Period," said one expert. The company's cars are "not a common sight" on American roads. But that's probably just a "matter of time."
China's big head start "The significance of the rise in the Chinese auto industry as part and parcel of the energy transition is hard to understate," Justin Worland said at Time. Beyond cars, Chinese companies have a head start on American companies in a "range of clean energy technologies, from solar panels to lithium-ion batteries."
One undeveloped market for BYD and other Chinese automakers: Europe. "Transportation bottlenecks have held them back," Nikkei Asia said. Established giants like Toyota have transport ships that carry thousands of cars to Europe, but Chinese electric vehicle makers have relied on shipping lines. But no longer. BYD just launched a ship that can carry up to 5,000 EVs in a single voyage. That's a "pioneering move" that should open the continent to massive new sales.
Smart-car crackdown? BYD may face one significant obstacle: The Biden administration is considering tariffs on Chinese "smart car" imports to "address growing U.S. concerns about data security," Fortune said. EVs, after all, "collect vast amounts of information about their drivers and surroundings." That's a big concern amid growing tensions between the U.S. and China.
Tesla plans to begin production on a new lower-cost EV starting in 2025, said Reuters. The entry-level vehicle is expected to be priced at about $25,000, which should allow it to compete. We'll see if that happens, though. "Tesla has a track record of missing its targets for launches and pricing." |