They're calling it the "Tesla killer."
A Chinese company, BYD, last year overtook Tesla as the world's leading seller of fully electric cars — and is now poised to grow even more, The New York Times said, "building assembly lines in Brazil, Hungary, Thailand and Uzbekistan" and expanding exports to Europe. Just a few years ago, BYD was merely a battery manufacturer. Now it's an automotive powerhouse. And that's gotten the attention of Tesla CEO Elon Musk. "Frankly, I think if there are not trade barriers established," he said in January, "they will pretty much demolish most other companies in the world."
Musk didn't always see BYD as a threat, CNBC said. "Have you seen their car?" he said in 2011. "I don't think it's particularly attractive, the technology is not very strong." BYD launched its first car in 2008 — the same year that Warren Buffet's Berkshire Hathaway made a $230 million investment in the company. Buffet's cash "gave a boost to BYD's electric car ambitions." The company has also received a huge assist from "the Chinese government's huge support of the country's EV sector." BYD received $4.3 billion in state subsidies between 2015 and 2020.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
SUBSCRIBE & SAVE
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
How has BYD become so successful? The cars are cheap, Fortune said. "No one can match BYD on price. Period," said one expert. The company's cars are "not a common sight" on American roads. But that's probably just "a matter of time."
China's big head start
"The significance of the rise in the Chinese auto industry as part and parcel of the energy transition is hard to understate," Justin Worland said at Time. It's not just Tesla that is challenged. As electric vehicles become even more popular, Chinese companies like BYD will challenge the dominance of Western auto companies. "We see the Chinese as the main competitor, not GM or Toyota," Ford CEO Jim Farley said last year. And it's not just cars. Chinese companies have a head start on American companies in "a range of clean energy technologies, from solar panels to lithium-ion batteries."
One undeveloped market for BYD and other Chinese automakers: Europe. "Transportation bottlenecks have held them back," Nikkei Asia said. Established giants like Toyota have giant transport ships that can carry thousands of cars at a time to Europe, but Chinese EV makers have had to secure space on shipping lines. No longer. BYD just launched the BYD Explorer, a ship that can carry up to 5,000 EVs in a single voyage. That's a "pioneering move" that should open the continent to massive new sales.
But are the cars any good? One expert pronounced BYD's EVs as "good, rather than great," said The Guardian. Good might be good enough, though. In the U.K., analysts expect that "one in three EVs will originate from China by 2030."
'A real competitor in China'
BYD may face one significant obstacle to its continued growth. The Biden administration is considering tariffs and other restrictions on Chinese "smart car" imports "to address growing US concerns about data security," Fortune said. EVs, after all, "collect vast amounts of information about their drivers and surroundings." That's a big concern amid growing tensions between the U.S. and China.
But BYD brings another advantage to its competition with Tesla: Home-field advantage in the world's second-most-populous country. "We often lose sight of the fact that the Chinese economy represents 1.4 billion people," Citadel CEO Ken Griffin said at a recent conference. Watching the company overtake Tesla was "heartbreaking," Griffin said. "We've got a real competitor in China," he said. "And Elon's right, the West has to grapple with the issue."
Musk's counter-punch? A cheaper car. Tesla plans to begin production on a new lower-cost EV — code-named "Redwood" — starting in 2025, Reuters said. The entry-level vehicle is expected to be priced around $25,000, which should allow it to compete with "inexpensive EVs, such as those made by China's BYD." We'll see if that happens, though: "Tesla has a track record of missing its targets for launches and pricing."
Explore More
To continue reading this article...
Create a free account
Continue reading this article and get limited website access each month.
register for free
Already have an account? Sign in
Subscribe to The Week
Get unlimited website access, exclusive newsletters plus much more.
Subscribe & Save
Cancel or pause at any time.
Already a subscriber to The Week?
Unlimited website access is included with Digital and Print + Digital subscriptions.
Create an account with the same email registered to your subscription to unlock access.
Bagikan Berita Ini
0 Response to "BYD is a 'Tesla killer' - The Week"
Post a Comment