Weekend Long Read: BYD Founder’s Pioneering Role in China’s EV Dominance

To commemorate its 15th anniversary, Caixin has republished a series of insightful interviews with important figures in China, focusing on critical issues like climate change and the China-U.S. tech war. Included are the journeys of businesses like BYD Co. Ltd., which surpassed Tesla as the largest EV manufacturer in 2023. [para. 1][para. 2]

BYD's evolution, led by founder Wang Chuanfu, highlights its transformative journey from a humble battery business in the 1990s into a global EV powerhouse, marked by significant milestones such as acquiring Xi’an Qin Chuan Automobile in 2003 and putting its first pure electric car concept, the ET, on display in 2004. [para. 3][para. 4] Warren Buffet's investment in 2008 spurred the release of BYD's first hybrid vehicle. [para. 5]

However, BYD faced several challenges, such as skepticism about EVs and reliance on government subsidies. Its overambitious sales targets led to inventory backlog issues. [para. 6][para. 7] Reflecting on these, Wang adjusted his approach, recognizing the limitations of pure EVs due to the inadequate charging infrastructure and shifted focus towards hybrids. [para. 8][para. 9]

This change stabilized BYD, propelling it to a dominant 50% market share in China's hybrid sector by 2023. Yet, new challenges emerged in 2019 with reduced subsidies and increased competition. BYD's resilience during the Covid-19 pandemic stemmed from technological advancements, such as the "blade battery" and an integrated supply chain, leading to unprecedented vehicle sales and substantial revenue and profits in 2023. [para. 10][para. 11]

In an interview with Caixin, Wang attributes their success to adapting strategies in constraints like charging infrastructure, and forecasts plug-in hybrids, accounting for 70% of the future market. He underscores the challenges from entrenched industries opposed to electric vehicles and stresses gradual expansion in charging facilities. [para. 12][para. 13]

BYD’s new-energy vehicle growth is driven by energy security, environmental concerns, and industry transformation, with increased government policy support. While still deemed essential, government backing will eventually recede as the market matures. BYD’s alignment with government initiatives, especially in adopting electric buses for public transport to reduce emissions, is strategic. [para. 14][para. 15]

Despite initial public hesitance and industry skepticism, BYD’s continued investments have paved the way for its current market readiness. The company plans to bolster production capacity to meet the rising demand, aiming to leverage policy directions favoring new-energy vehicles. [para. 16][para. 17][para. 18]

Although the entry of foreign brands in the low-end market intensifies competition, BYD aims to rely on innovation and the existing conducive environment rather than following past practices of trading market access for technology. The firm emphasizes coordination between traditional and new-energy car business sectors, leveraging its foundation in traditional vehicle platforms. [para. 19][para. 20][para. 21]

For BYD, rapid growth in the new-energy segment is anticipated, with expectations of significant increases in sales revenue from new-energy vehicles. While state policies are instrumental, the firm also recognizes the necessity of engaging private consumers for sustained growth. [para. 22] The company remains selective in participating in the construction of charging stations, cooperating with city promotions to reduce local protectionism gradually. [para. 23]

Contact information for editors Kelsey Cheng and Jonathan Breen is provided for further insights. [para. 24]