On February 8, 2024, BYD electric vehicles waiting to be shipped were stacked at the Taicang Port International Container Terminal in Suzhou, Jiangsu Province, eastern China.
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against in the game Tesla Facing the global electric vehicle market, Chinese automakers BYD Despite growing barriers in the U.S. market, the company has made strong inroads into overseas markets.
The Shenzhen-based company has been testing the waters in several countries, often achieving some immediate sales success within a year of entering.
Amid policy uncertainty over China’s electric vehicle exports to major markets such as the United States and Europe, BYD is seeking to boost overseas sales by moving production to regions considered friendlier. The company already has operations in Thailand, Brazil, Indonesia, Hungary and Uzbekistan are in the pipeline.
“They are targeting countries that do not have strong domestic auto industries, and from a policy perspective, these countries may face less political resistance or resistance,” said Xiao Feng, a research analyst at CLSA. He noted that recent developments in the United States highlight that the need to take this approach.
The Biden administration said last month it had begun an investigation into whether Chinese-made vehicles pose a national security risk and raised the possibility of restricting the vehicles. The United States is trying to support the popularization of electric vehicles in the country, but the sales penetration rate is far lower than that in China.
BYD is moving quickly, starting with Thailand, where it expects its first factory outside China to be operational by the end of this year. In January this year, the automaker overtook Toyota to take the top spot in Thailand’s passenger car sales rankings, despite not having any sales in the country a year ago, according to Marklines.
Once operational, the Thai factory may serve the rest of Southeast Asia.Ernst & Young forecasts region’s electric vehicle market will double to at least $80 billion per year sales over the next ten years.
BYD has become the best-selling electric vehicle brand in Southeast Asia, having captured more than a third of the market last year after selling almost no cars in the region, according to Counterpoint Research.
Advantages with Tesla
BYD sold 70,000 electric vehicles in Southeast Asia last year, accounting for 35% of the market, leading its competitors Vinfast and Tesla, according to Counterpoint Research.
One of BYD’s advantages over Tesla is that it offers a wide range of products in the mass market, as well as hybrid and battery-powered vehicles. Tesla specializes in making higher-priced battery-only cars. Having a hybrid option would be beneficial in emerging markets where battery charging infrastructure is still limited.
Canalys automotive analyst Alvin Liu said Southeast Asia will likely remain BYD’s strongest overseas market in the short term as the company works to achieve its goal of doubling vehicle exports to 500,000 vehicles by 2024 from last year.
“The Southeast Asian electric vehicle market is still in its early stages, and consumer habits need to be cultivated,” Liu said. “Cost-efficiency” is particularly important, he added, with BYD’s Atto 3 and Dolphin models sold at very competitive prices in the region.
The company also plans to invest US$1.3 billion to build an electric vehicle factory in Indonesia in 2024. Local media reported in January. This year, BYD also It is said There are plans to significantly increase the number of stores in Singapore and the Philippines.
The company did not respond to a request for comment on the reported plans.
While BYD did not break down capital expenditures by country, it disclosed auto-related capital expenditures of 81.52 billion yuan ($11.33 billion) in the first six months of 2023, nearly double the 45.94 billion yuan for all of 2022.
In stark contrast to Tesla’s direct sales model, BYD often relies on local dealers and partners for sales outside China.For example, at the end of 2022, BYD signed a Signed distribution agreement with Sime Darby Motors in Malaysia.
Americas Plan
BYD is expanding in Brazil and has its sights on Mexico, which borders the United States, despite growing U.S. scrutiny of China’s electric vehicle dominance.
Stella Li, CEO of the company’s Americas region told Reuters BYD is considering plans to build a factory in Mexico and has begun selling more electric vehicles there.
Bill Russo, founder and CEO of investment advisory firm Automobility, recently told CNBC’s “Squawk Box Asia” that if BYD does build a plant in the country, it could make it a “beachhead for the Americas.” ”.
“Mexico is part of the USMCA, so there may be opportunities to export from Mexico to North America,” he said, referring to the free trade agreement enacted in 2020 between the United States, Mexico and Canada.
Li Keqiang says BYD does not plan to sell passenger cars to the United States It is reported that End of February.
The automaker did not respond to a request for comment for this article.
To date, China remains BYD’s largest market. Last year, the company produced more than 3 million new energy passenger vehicles, of which more than 242,000 were sold overseas.
The rapid growth of BYD and other Chinese electric vehicle companies has other automakers worried.
In February, the Alliance for American Manufacturing issued a Report warning Low-cost Chinese imports could be an “extinction-level event for the U.S. auto industry” and calls for Washington to prematurely block imports from Mexico.
Just a few weeks ago, the company released news that BYD was far ahead of Tesla in vehicle production.
Europe and other markets
The global electrification wave brings potential market opportunities for Chinese automakers, especially as domestic growth slows.
Liz Lee, deputy director of Counterpoint Research, said: “BYD needs to look for more overseas opportunities in other regions where electric vehicle penetration will accelerate with the development of infrastructure to achieve long-term sustainable growth rather than losing ground with the U.S. share compared to European carmakers.”
BYD announced late last year that it would Open a factory In Hungary, January said production would Starting three years later.
The news comes months after the European Union announced an investigation into the role of subsidies for Chinese-made electric vehicles.
BYD also sells cars in Australia, the Middle East and Africa and announced the launch in January Produced at its joint venture factory in Uzbekistan.
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