BYD Aims for Annual Production of 5 Million Vehicles(AI Translation)
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文｜财新周刊 安丽敏 翟少辉
By Caixin Weekly‘s An Limin and Zhai Shaohui
比亚迪（002594.SZ）是全球智能电动汽车第一“卷王”——同行送给比亚迪这个称号，董事长王传福欣然接受。“‘卷’是竞争，是市场经济的本质。”他在6月7日举行的一个论坛上说，“所有企业家都要拥抱参与竞争，从中脱颖而出。”
BYD (002594.SZ) has been dubbed the world's top "champion in competitive overdrive" in the smart electric vehicle sector—a title bestowed by its peers and warmly accepted by its Chairman, Wang Chuanfu. "Being 'competitive' is the essence of market economy," Wang said during a forum held on June 7. "All entrepreneurs must embrace and engage in competition to stand out."
这一称号并不算夸张。5月28日，比亚迪发布第五代DM（Dual Mode，双模动力）插电式混动系统，两款新车型搭载这项新技术，起售价均只有9.98万元。这是比亚迪向燃油车主力阵营发起的又一轮攻势。“比亚迪就想在这两年把我们‘卷死’。”一家主流燃油车企人士说。
This title isn’t an exaggeration. On May 28th, BYD unveiled its fifth-generation DM (Dual Mode) plug-in hybrid system. Two new models equipped with this technology were launched at a starting price of just RMB 99,800. This marks yet another aggressive move by BYD targeting the mainstream gasoline vehicle market. "BYD’s goal seems to be to outcompete us within the next two years," said a representative from a major gasoline car manufacturer.
比亚迪呈现出时不我待的紧迫感。据财新了解，国家主管部门希望国内能够在2025年出现一家销量达到500万辆的车企。官方虽未点名，但行业里清楚，只有比亚迪具备夺魁实力。
BYD is displaying a sense of urgency as if time is of the essence. According to Caixin, national regulatory bodies hope that by 2025, a domestic automaker will achieve annual sales of 5 million units. While officials have not named any specific company, industry insiders are well aware that only BYD has the potential to claim the top spot.
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- **BYD's Rapid Expansion**: BYD, led by Chairman Wang Chuanfu, has aggressively targeted the mainstream gasoline vehicle market with new plug-in hybrid systems and competitive pricing—selling 332,000 vehicles in May 2024 alone.
- **Performance and Strategy**: BYD ceased gasoline vehicle sales in 2022, achieving 3 million NEV sales by 2023 and expanding product lines extensively. It also ventured into global markets, entering over 70 countries.
- **Challenges and Competition**: Despite its rise, BYD faces stiff competition, technological gaps in autonomous driving, and the need to expand into mid-to-high-end markets, with rivals in both domestic and international markets closing in.
BYD (002594.SZ) has garnered the title of the world's top "champion in competitive overdrive" in the smart electric vehicle (EV) sector, a designation championed by its Chairman, Wang Chuanfu. Wang emphasizes that competition fuels the market economy and that all entrepreneurs must embrace it to excel [para. 1]. On May 28, BYD launched its fifth-generation DM (Dual Mode) plug-in hybrid system and introduced two new models priced at RMB 99,800, an aggressive bid to dominate the mainstream gasoline vehicle market [para. 2].
National regulatory bodies aim for a domestic automaker to reach annual sales of 5 million units by 2025, a target insiders believe only BYD can achieve. Until recently, BYD's sales never exceeded 500,000 vehicles annually [para. 3]. Wang Chuanfu highlighted that from 2017 to 2019 were BYD's "darkest moments," with net profits plummeting to just 230 million yuan in 2019. However, BYD pivoted successfully by focusing on new energy vehicles (NEVs) [para. 4]. Sales jumped from 730,000 vehicles in 2021, where 545,000 were NEVs, to 1.87 million units in 2022, doubling to 3 million units by 2023, with all sales being NEVs [para. 5].
BYD's price and cost strategies have been crucial in its rapid growth. The company launched the Qin Plus in early 2021, embodying extreme cost-effectiveness, which led to the proliferation of its product lines under challenging market conditions [para. 6][para. 7]. As of February 2024, BYD introduced the "Glory Edition," prioritizing affordability, thereby instigating a price war [para. 8]. Zhou Lijun from Yiche Research Institute credits BYD's rapid rise to significant price reductions over short periods [para. 9].
Despite its success, BYD faces mounting competition and challenges. Industry insiders believe it will have no domestic rivals in the next year or two, yet long-term competition remains [para. 10][para. 11]. As the NEV market evolves, intelligence and advanced features are becoming key competitive factors. Critics argue BYD lags behind firms like Huawei and XPeng Motors in this area [para. 12][para. 13]. Nevertheless, BYD's ability to adapt and its concerted efforts to catch up might secure its place in the top tier [para. 14][para. 15].
The company has also launched high-end sub-brands to expand its market reach, including Denza, Yangwang, and Fangchengbao, covering nearly all market segments [para. 16]. Internationally, BYD is making significant strides. Since 2021, it has entered over 70 countries and regions and announced plans for factories in Thailand, Brazil, Hungary, and Uzbekistan. This expansion resulted in a 300% year-on-year growth with 243,000 vehicles exported in 2023 and 176,000 units in the first five months of 2024 [para. 17][para. 18].
BYD's rapid rise is partly due to favorable market conditions and its battery production background, which most competitors lack [para. 19][para. 20]. However, increased competition in the hybrid market and potential turning points in the industry, such as autonomous driving, might challenge BYD's current strategies [para. 21][para. 22].
BYD initially struggled in the NEV market but adapted by aligning closely with government policies and launching suitable products such as the Blade Battery, a technical innovation that enhanced vehicle safety and efficiency [para. 23][para. 24]. Despite its controversial marketing tactics, BYD's vertical integration and obsessive pursuit of cost efficiency and rapid product updates have propelled its market position [para. 25][para. 26].
To counter BYD's dominance, competitors like Geely Auto and Great Wall Motors are developing independent battery supply chains and negotiating joint ventures [para. 27][para. 28]. Internationally, nations like the U.S. and the EU impose restrictive tariffs and duties on Chinese-made EVs, which poses a challenge to BYD's global ambitions [para. 29][para. 30].
Despite its success, BYD's rapid growth exposes risks such as dependence on governmental subsidies, production challenges, and the need for further integration in intelligence and high-tech features to sustain its market position [para. 31][para. 32]. As BYD expands, maintaining quality and innovation while managing market criticisms and adapting to new competitive pressures will be pivotal [para. 33][para. 34].
- BYD
比亚迪 - BYD (002594.SZ), chaired by Wang Chuanfu, is a leading global smart electric vehicle company known for its aggressive competition. Soaring from tough times in 2019, it now aims for significant growth by leveraging vertically integrated production, multiple brands, and international expansion. Challenges include competition and the need to improve in smart driving technologies.
- Li Auto
理想汽车 - Li Auto (NASDAQ: LI) is recognized as a leading Chinese electric vehicle manufacturer that excels in smart technology. It's mentioned in the article in relation to competitive pressure on BYD, highlighting that the market perceives Li Auto and other companies like Huawei and XPeng as leaders in automotive intelligence. Li Auto's strategic emphasis on smart cars places it in direct competition with BYD, especially in the growing mid-to-high-end vehicle segments.
- Xpeng Motors
小鹏汽车 - Xpeng Motors (NYSE: XPEV) is highlighted in the article as one of the leading companies known for its strengths in intelligent driving technology. It's mentioned alongside other top companies like Huawei and Li Auto as market leaders in the smart driving sector, posing a significant threat to BYD's competitive position in the next phase of the automotive industry.
- Geely Automobile
吉利汽车 - Geely Automobile (00175.HK) is a major competitor of BYD. It has made strides by producing its own lithium iron phosphate batteries, smart cockpit chips, and vehicle systems. Geely's sub-brands, such as Galaxy and Lynk & Co, have launched plug-in hybrid models to compete directly with BYD. In 2023, Geely's total sales were surpassed by BYD. Geely's hybrid powertrain joint venture with Renault targets global markets, including serving Mercedes-Benz.
- Great Wall Motors
长城汽车 - Great Wall Motors publicly accused BYD of using sub-standard fuel tanks in certain plug-in hybrid models, leading to allegations of unfair competition between the two companies. Despite this, the confrontation between BYD and Great Wall Motors was eventually unresolved.
- NIO
蔚来汽车 - The article does not provide specific information about NIO. However, it mentions that, in the context of the competitive electric vehicle market, companies like NIO, recognized for their intelligent technologies, are among the key players competing with BYD.
- CATL
宁德时代 - CATL (Contemporary Amperex Technology Co., Limited) is a major competitor to BYD in the battery industry. Known for its lithium iron phosphate batteries, CATL has launched similarly performing battery products to counter BYD's advancements. Facing pressure from other car manufacturers, CATL has selectively provided discounts to maximize battery sales and compete more effectively.
- Huawei
华为 - The article mentions that BYD plans to compete fiercely with Huawei's AITO brand in the mid-to-high-end market segment in 2024 and 2025. It also highlights that Huawei is recognized as a leading company in smart vehicle technologies, posing a significant challenge to BYD's market position.
- GAC Group
广汽集团 - GAC Group's chairman, Zeng Qinghong, suggested that once electric vehicles (EVs) account for over half of new car sales, regulatory authorities should consider promoting "equal treatment for gasoline and electric vehicles." He has submitted this proposal to the Ministry of Industry and Information Technology and the National Development and Reform Commission, suggesting that the preferential treatments for EVs may need reassessment as their market share grows.
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