Next February, the Chinese company BYD will celebrate its 30th anniversary since its foundation. Just a youngster according to the most traditional coordinates of this industry, where many manufacturers have already surpassed their first century of existence.
The fact is that BYD (Build Your Dreams) has achieved a lot in such a short time. For example, from being a start-up with only 20 employees based in Shenzhen - the spearhead of the Chinese Silicon Valley - dedicated to manufacturing batteries for mobile phones, to expanding into other areas such as electronics, rail transport, and, above all, car manufacturing.
An expansion that has turned it into a company with over 900,000 employees worldwide (80% in automotive) and generated ¤77 billion in revenue in 2023, with a net profit of ¤3.85 billion. This was achieved after selling just over three million plug-in vehicles, making it a global leader in these technologies, and the first Chinese brand to enter the top 10 global manufacturers, even if it was at the bottom of the list.
"Founded in 1995 as a mobile battery start-up"
That record was shattered in 2024, reaching 4.25 million passenger cars, including the luxury brand Denza, but excluding commercial vehicles. With this figure, it will have already positioned itself among the top five and, with a bit of luck, only behind Toyota and Volkswagen. In 2023, it even snatched the lead in China from Volkswagen, the world's largest market, which the German company had dominated for decades. In 2024, BYD's dominance there has been unquestionable.
Over 500,000 cars sold in December
What is also surprising is the increasing speed at which it has progressed. For instance, it took a whopping 13 years to reach its first million vehicles produced, then only 18 months to reach three million; and nine months to reach five million... And in November, it celebrated the production of the first 10 million plug-in vehicles (or new energy vehicles, as per Chinese jargon). This milestone was achieved with a luxury minivan Denza, which ended up in the hands of Feng Ji, the founder and CEO of the video game company Game Science.
"They have control over almost the entire electric car value chain"
In the same vein, its sales have grown exponentially in the last five years since in 2019, after three consecutive years of decline, it barely sold 430,000 cars. That's almost 100,000 fewer than it sold in just December of last year, its best month ever.
In the right place at the right time
It could be said that BYD has been in the right place at the right time... but it has also played its part. It has benefited from Beijing's shift in the automotive industry when, realizing that the future was not in combustion engines, it forced the transition to electric vehicles. This was done by injecting billions of euros in subsidies that the EU later deemed illegal, leading to additional tariffs on electric vehicles made in China. BYD's vehicles have to pay an additional 21%, even though it is a private company where investors as savvy as Warren Buffet have maintained a very strong position for over 15 years.
"The perception that this support is illegal is unfounded and I believe it is based on fear of the sudden growth of Chinese automakers during the pandemic," said Stella Li, vice president in charge of expansion in Europe and America, in a recent interview with this newspaper.
Indeed, Li pointed out that the competition is so fierce in their country that "you are literally forced to survive by continuously improving quality, performance... Additionally, the Chinese consumer has become so demanding that at the slightest issue, they halt the purchase."
BYD's vice president acknowledged that, although they were on the brink of bankruptcy several times, they were clear that the combustion engine car could not be the core of their business. This path went against their government's guidelines and would exclude them from official funding.
So in 2017, they announced they would stop producing pure combustion engine vehicles and, since April 2022, they only manufacture plug-in hybrids and pure electric vehicles. They also made a strong commitment to R&D. Today, they have more than 102,000 engineers working in 11 centers, filing an average of 32 patent applications per day, with over 48,000 accumulated requests. In just the first three quarters of 2024, they invested over ¤4.4 billion in this area and announced they would allocate another ¤13 billion to integrate Artificial Intelligence into their processes.
"Among their 900,000 employees, there are 102,000 engineers"
Another strength of BYD that stems from its origins is control over almost the entire electric car value chain, starting from battery production, through motors or electronic architecture, and culminating in managing the entire propulsion system.
The majority of their factories currently produce PHEVs. In 2024, they produced nearly 2.5 million units of these models, compared to 1.77 million pure battery electric vehicles. In other words, they were just about 20,000 units away from surpassing Tesla as the global leader in 100% battery-powered vehicles.
"In 2024, they were just 20,000 vehicles away from surpassing Tesla as the leader in battery-powered cars"
The company led by Elon Musk experienced a slight 1% decrease in registrations last year, and it seems only a matter of time before BYD overtakes it. In fact, they have already surpassed Tesla on occasion, although Stella Li downplayed this supposed competition by stating that they are not rivals with Tesla, "but we do have a common enemy: the combustion engine."
Whether they achieve this sooner or later will depend, first, on their local market. Over 90% of their production last year remained in the hands of Chinese customers, where competition is fierce, and it is not expected that demand will grow at the same pace by 2025.
However, they are also expanding internationally, especially in Europe and America, where they have just begun their journey. In Europe, they already have a solid commercial presence, and before the end of 2025, their first car factory in the region should be operational. Located in Hungary, the goal is to produce around 200,000 vehicles per year, thus avoiding the additional tariffs approved by Brussels last autumn. However, these tariffs have led to putting on hold the project to build a second factory in Turkey, with Spain once again ruled out.
The situation in Mexico seems more complicated. Months ago, BYD announced plans to establish a plant in that country. This would also supply the US and Canadian markets under the free trade agreement that governs relations between the three countries.
However, when Trump announced his candidacy for the White House, BYD stated that they would not make any decisions until the outcome of those elections. With the politician about to start his second term, there are no updates beyond the continuous threats from the Republican politician to impose brutal tariffs on brands that prefer to make these industrial investments in Mexico, then sell their cars at a better price in their northern neighbor.
"The BYD Seal U i-DM is a plug-in hybrid with up to 125 km of range"