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The rise of China's Tesla killerhttps://www.businessinsider.in/tech/news/the-rise-of-chinaaposs-tesla-killer/slidelist/109463200.cms2024-04-20T21:32:11+05:30

The rise of China's Tesla killer

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Camilo FonsecaApr 20, 2024, 21:32 IST

The rise of China's Tesla killer — The Seal U is one of BYD's latest EV offerings.Anusak Laowilas/NurPhoto via Getty Images
Chinese automaker BYD briefly eclipsed Tesla as the world's top seller of electric vehicles.
Even without access to the American market, BYD's affordable EVs are popular in China.
BYD may not be a household name in America, but it recently made itself known in a big way.
For a brief moment earlier this year, the Chinese automaker unseated Tesla as the world's top seller of electric cars.
Even though you won't see a BYD car in America (yet), the company has built an affordable brand that's popular in China and elsewhere.
Here's the story of the company that proved it could outsell Elon Musk.

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BYD doesn't stand for anything — officially.

BYD doesn't stand for anything — officially. — The BYD nameplate is associated with the slogan "Build Your Dreams," but that came after the company was formed.picture alliance
Wang Chuanfu and a cousin founded BYD in 1995. Then a 29-year-old government researcher, Wang came from a family of rice farmers. He earned a university scholarship and eventually moved to the Special Economic Zone in Shenzhen to start his new company.
The "YD" in the name comes from Yadi, the village in Shenzhen where the company was originally located, according to one South Korean newspaper. The "B" was added later, supposedly as a promotional tool. Wang has said in interviews that, taken together, the "BYD" name didn't stand for anything in particular.
It was only later that Wang derived the slogan "Build Your Dreams." The company has also acquired another nickname: "Bring Your Dollars."

The company was originally a cell phone battery manufacturer.

The company was originally a cell phone battery manufacturer. — Hu Jintao, China's vice president in the 1990s, tests a Samsung cellphone. Samsung was one of BYD's earliest customers.Kim Jae-Hwang/AFP via Getty Images
The company's original business wasn't cars. It was cellphone batteries. BYD challenged established Japanese suppliers Toyota and Sony by providing a cheaper alternative. By 2002, companies like Motorola, Nokia, Sony Ericsson, and Samsung were all using BYD batteries.

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They started making cars in 2003.

They started making cars in 2003. — Peter Parks/AFP via Getty Images
BYD moved into the car business after buying Xi'an Tsinchuan, a failing state-owned automaker that was then an arm of defense contractor Norinco, according to the South China Morning Post.
The company launched its first car in 2005. The BYD F3 was a compact sedan that resembled the Toyota Corolla. It sold for as little as 40,000 yuan, or about $5,850.

Warren Buffett was a key early booster.

Warren Buffett was a key early booster. — Wang Chuanfu (left) welcomed investors Charlie Munger, Warren Buffett, and Bill Gates to celebrate the launch of the BYD M6 in 2010.Visual China Group via Getty Images
Billionaire investor Warren Buffett was one of the high-profile names to take interest in BYD early on. Looking to invest in China's booming car market, Buffett toured BYD's headquarters.
While the Berkshire Hathaway tycoon was there, Wang reportedly took a sip of battery fluid to prove how clean his batteries were, according to The Wall Street Journal. Buffett was so impressed by the experience, he offered to buy 25% of the company.
Wang declined that offer, but Buffett was not deterred. Berkshire Hathaway acquired a 10% stake in BYD — for $232 million — in 2008.

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Their first electric car drew scorn from Elon Musk.

Their first electric car drew scorn from Elon Musk. — Stan Honda/AFP via Getty Images
The company debuted its first fully electric vehicle, the e6, in 2010. Benefiting from Chinese government subsidies, it was able to compete with its Japanese counterparts.
But not everyone was impressed. Tesla CEO Elon Musk, in a 2011 interview, laughed when he was asked whether he considered BYD a serious rival to Tesla.
"Have you seen their car?" he said. "I don't think they make a good product. I don't think it's particularly attractive. The technology is not very strong."

BYD's hybrid cars turned it into a titan of Chinese automakers.

BYD's hybrid cars turned it into a titan of Chinese automakers. — Wang Chuanfu introduced the BYD Qin in 2012.AP Photo/Alexander F. Yuan
BYD established itself as one of the top automakers for hybrid vehicles in China in the 2010s. Its most popular offering was the Qin, introduced in 2012, which became one of the bestselling cars in China.
That wasn't the only offering that propelled BYD to prominence, however. The company also released the Tang, a hybrid SUV, and partnered with Daimler AG (now Mercedes-Benz) to make its Denza line.

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BYD took the EV crown from Tesla — briefly.

BYD took the EV crown from Tesla — briefly. — A BYD ATTO 3 in Bangkok.Athit Perawongmetha/Reuters
Even though most of its sales in the fourth quarter of 2023 came from the Chinese market, BYD made headlines across the globe when it seemingly did the impossible — it unseated Tesla as the world's top seller of electric cars.
The Chinese automaker rode the EV wave on the back of its new Seagull, which debuted for 73,000 yuan (about $10,000), as well as its Song, Qin Plus, Dolphin, Yuan Plus, and Han EVs.
Tesla reclaimed the crown in the first quarter of 2024, though both companies saw steep declines in their sales.

Don't expect to see a BYD car on American roads anytime soon.

Don't expect to see a BYD car on American roads anytime soon. — New BYD cars wait to be loaded onto a ship in China's Shandong province.Future Publishing
For a time, it looked like we were just a few years away from getting Chinese electric cars in the United States. A BYD executive said as much in 2017, and the company even hired Leonardo DiCaprio as a brand ambassador for English-speaking customers.
Since then, BYD has expanded overseas. The Chinese automaker is planning a factory in Mexico — alarming US officials — and even created its own shipping fleet in a bid to cut down on export costs.
But the company says it has abandoned its plans of selling its EVs to Americans. Analysts have pointed to geopolitical tensions and trade barriers between the two countries, as well as the slumping demand for EVs in the United States.

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