BYD, China's dream of conquering the global automobile market

BeijingChina dreams of leading the electric car market, and sales data point it toward this goal. The leading Chinese brand, BYD, has announced that by 2024 it will surpass the sales revenue of the current market leader, Tesla. BYD is the acronym for build your dreams [Build your dreams]. And dreams are starting to come true. The company is celebrating its strong results for the last fiscal year, which put it ahead of Tesla. While Elon Musk's company had a turnover of $97.7 billion, BYD surpassed it with revenues of $107.2 billion.

The figures are somewhat falsified, as BYD has included the sale of hybrid cars in its accounts, and not just electric vehicles as its competitor does. However, it cannot be denied that the Chinese company is nipping at the heels of the American giant Tesla. Both companies sold practically the same number of electric vehicles in 2024 (1.76 million BYD and 1.79 million Tesla), but the Chinese company experienced a 29% increase in sales, driven by its hybrid models.

That's not the only good news, because a few weeks ago BYD announced a new technology that will allow electric vehicle batteries to be charged in five minutes, giving them a driving range of around 400 kilometers. This means that the time it takes to charge the battery is comparable to the time it takes to fill the gas tank of a combustion engine car.

In February, the company already announced that it would incorporate the God's Eye driver assistance system for free in all its models and, as if that weren't enough, it is about to market a new model to compete with the Tesla Model 3 at half the price. All of this puts BYD in the position to definitively snatch the throne from Tesla.

The main threat to BYD's international expansion is tariffs, not only those from Trump, but also those from the EU and other countries that question the heavy subsidies that the Chinese automobile industry receives. BYD's factory in Hungary, the bridge to enter the European market, is under investigation by Brussels. Factories in Mexico are pending US tariffs, and in Brazil, the working conditions at the new factory are being investigated.

BYD's success has a name: Wang Chuanfu, founder and CEO of the company. He was born in 1966 in Anhui province. His official biography is similar to that of other successful Chinese figures who embody the self-made man ideal so beloved by the Chinese public and which, in a way, emulates the American Dream.

A self-made man

He was born into a peasant family and orphaned at a young age. He was raised by his four siblings, who helped him attend university and study chemistry, physics, and metallurgy. His family also raised the money for him to quit his job as a researcher at a state-owned company and start his first business in 1995: BYD, a battery factory in Shenzhen. It became a leader in batteries for mobile phones and other electronic devices. Batteries have always been at the heart of Wang Chuanfu's business.

In 2003, he made the move into the automotive industry and bought a small state-owned company in crisis. It began manufacturing cars with combustion engines, but the infrastructure allowed him to open his first car battery factory. The final push came in 2008, when he managed to capture the attention of American investor Warren Buffett, who injected $230 million into BYD.

The goal has always been to create an electric car that's as cheap as combustion-powered cars. According to experts, BYD has implemented a strategy of integrating all parts of the supply chain within the company to reduce costs: from access to lithium mines and battery development to technology to improve assisted driving.

In China, dreams come true with powerful alliances with the government: Wang is a member of the Chinese Communist Party and has become one of the richest men in the country. Dreams also come true through five-year plans and a strictly planned economy that isn't afraid of losing money on mistakes. Electric cars have been a priority and a state policy. China was aware that it couldn't compete with gasoline-powered cars, but it wants to lead the way in electric technology.

Plans to develop this market have been in place since 2010. Local governments have been incentivized to invest in the industry, and so many companies have been created that some brands haven't even marketed a car yet. China's advantage remains, above technology, price. Low costs make its cars very competitive. And we mustn't forget that the Asian giant has a large market: in 2020, China already accounted for half of global electric car sales.

Since 2017, large fleets of BYD electric buses and taxis have been circulating in its home city of Shenzhen, a metropolis of 22 million inhabitants. In contrast, in Beijing, they began circulating on the streets about three years ago; most are commercial fleets of Didi (the Chinese Uber).

The central government has currently required state-owned companies and their employees to buy cars from domestic brands. A difficult competition to match.