BYD: ALL YOU NEED TO KNOW
We answer 8 big questions about the world’s biggest electrified vehicle maker
Words Nick Gibbs | Imagery BYD
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You may not be familiar with the name BYD – though you’ll see its name at this summer’s UEFA EURO 2024™ football championship as the official e-mobility partner.
Standing for Build Your Dreams, the company originated in China as a battery maker 29 years ago. Today it’s a huge global organisation, employing more than half-a-million people across four major industries: electronics, new energy (solar power and energy storage), rail transit and electrified automobiles. And that vast industrial footprint is unified by a corporate mission: to reduce the world’s reliance on fossil fuels.
Electric cars are critical to this dream. BYD sold more than 3 million cars last year, with more than half pure electric (and the rest plug-in hybrids with a significant pure electric range).
The company is now expanding into Europe with plans for a factory here, and it entered the UK in 2023 with three EVs: the Dolphin hatchback, Atto 3 SUV and Seal saloon. The line-up is even more extensive overseas and includes a car catching the eye of automotive CEOs everywhere: the BYD Seagull.
This 3.8m-long electric city car epitomises BYD’s achievement in making electric cars affordable to the masses. It has a 190-mile range, a big touchscreen, seats four – yet costs the equivalent of just £8100 in China. How has BYD managed this? Read on to find out.
Pioneering F3 plug-in hybrid
F6 Dual Motor's Detroit debut
1. Where did BYD spring from?
BYD was created in 1995 by metals chemist Wang Chuanfu to make rechargeable batteries for mobile phones, but expanded into cars 10 years later after buying an underperforming state-owned car maker.
The first model was a combustion-engine saloon called the F3 sold to undercut the likes of the Toyota Corolla.
But Chuanfu wanted his new machines powered by the same battery technology used by the phones and in 2008 BYD showed off the world’s first mass-produced plug-in hybrid, the F6DM – DM for dual mode.
Showing confidence in its breakthrough technology, BYD revealed it at the first showpiece motoring event of 2008, the Detroit auto show, doubling down with the F3DM at Geneva a couple of months later. It was the start of something big.
2. So BYD makes combustion engine cars too?
Only plug-in hybrids now. As part of its corporate vision to ‘cool the earth by 1˚C’, last year BYD manufactured its 5 millionth electrified car and ceased production of pure combustion powered models, claiming to be the first mass-market car maker to do so.
The plug-in hybrids are now the only way you can burn gasoline in a BYD, but they’re being overtaken by EVs: BYD sold 1.57m pure electrics in 2023 and 1.43m plug-in hybrids.
The PHEVs are just as good value. Last year BYD launched a version of the brand’s best-selling Qin Plus saloon, a VW Passat sized car that now starts from the equivalent of £8,800. A steal for a plug-in hybrid with a 34-mile electric range.
BYD assembly is Hungary-bound
Warren Buffett bought into BYD
Manufacturing Blade batteries
3. What’s the secret to BYD’s AFFORDABILITY?
The company is incredibly vertically integrated, which means it makes a much higher proportion of parts itself. ‘Car maker’ has become the accepted generic term for firms like Volkswagen but in truth most are assemblers of bits made by others. BYD isn’t. In a teardown of the BYD Seal electric saloon overseen by analysts at the bank UBS, they found that 65% of the value of the car was built in house, as opposed to just 11% of a German-built VW ID3 electric hatchback. The figure was even higher than Tesla’s 57% for its US-built Model 3 saloon.
The strategy is to take in-house any part it can make more efficiently including batteries, electric motors and circuit boards, with the remainder outsourced. That way it can still make a profit on a £9k EV, and achieve price parity with combustion cars – crucial for stimulating widespread embrace of electric cars.
Like many successful industrialists before him, founder Chuanfu realised that to disrupt a market you need not just a good product, but you also need to rebuild the supply chain to make that product cheap enough to break customers’ well-established buying habits.
4. So BYD makes the battery itself? Like Tesla?
Tesla builds batteries to Panasonic’s design and in-sources from other cell suppliers. And one of those suppliers is – you’ve guessed it – BYD.
Early on in its life BYD bet that the future of automotive batteries lay with a chemistry called lithium iron phosphate, or LFP.
LFP did away with the need for expensive metals such as nickel or manganese but its range was only initially considered suitable for local delivery vans. BYD turned that thinking on its head with the Blade battery, launched in 2020, and now the market share of LFP for Chinese EVs is around 60 per cent according to analysis from the bank Bernstein. That has created a secondary market for BYD to sell batteries to rivals, including Tesla.
5. So the boss, Wang Chuanfu. Is he China’s Elon Musk?
In one sense Chuanfu (above) is a Musk-like character in his laser focus on taking battery electric cars mainstream. To have any hope of doing that, both men know this hinges on efficiency, hence their appetite for shaking up established norms in automotive technology and the supply chain. But BYD’s boss is different to Musk in one significant way: he has a much lower profile!
6. WhY was 2008 A BIG YEAR for byD?
That was the year BYD won investment and plaudits from probably the world’s most famous investor, America’s Warren Buffett.
Buffett’s company Berkshire Hathaway ultimately bought around a fifth of the company and made over a billion dollars selling back much of its stake as BYD grew. And 2008 was also when BYD expanded into electric buses, launched its first plug-in hybrid, began its energy storage business and branched out into solar panels. Quite the year.
BYD: from trucks...
...to container ships...
...to electric buses
7. So it makes more than cars and batteries?
BYD is now one of the world’s largest makers of electric buses, with more than 1500 delivered in the UK in partnership with Alexander Dennis. Take the 507 from London’s Waterloo station to Victoria station to try one.
It also builds trains, and one of the company’s innovative monorails swings past BYD’s vast Pingshan campus in Shenzhen where it builds and develops EVs. As it expands globally, BYD is also getting into the shipping business with seven roll on-roll off (RORO) car delivery vessels on order. Little wonder it employs almost 600,000 people around the world.
But for all its side bets into smartphones, semi-conductors, buses, energy storage and so on, bankers Bernstein ascribes 90 percent of BYD’s value to its car business.
8. And now it’s growing in Europe?
Yes. BYD now has 250 dealerships throughout the region, including 24 in the UK and counting.
The Atto 3 is already Europe’s best-seller in the electric compact SUV segment, with the Dolphin fishing in the small car market and the Seal saloon angling for Tesla Model 3 customers.
This year, BYD will launch its latest plug-in hybrid in the UK, the Seal U. But it’s not just about marketing imported cars: BYD has announced plans for its first European car factory, in Hungary. Such is the company’s focus on – and optimism about – cracking the European market.
