BYD and other Chinese manufacturers are going global. Now, faster than ever before. Just one more competitor in some markets, Chinese vehicles threaten industrial stability in some markets.
EkaLore has been releasing our analysis, notes, and perspectives on the Alien Invasion of the global vehicle markets. First, by Tesla, and now watching as new entrants onto the global vehicle markets worth trillions as the energy transformation accelerates. In this release, EkaLore looks again at BYD whose motto is “Build Your Dreams”) – arguably the largest volume producer of Alien Invasion to follow Tesla.
BYD is a Chinese-based vehicle manufacturer, (BYD Auto brought in 2003) which has two historical key parallel business sectors now coming to be huge advantages in the global vehicle markets. BYD has an integrated operating sector devoted to semiconductors and electronics manufacturing. These sectors strongly compliment the vehicle manufacturing operations in areas weak, or non-existent, in many traditional vehicle manufacturers.
BYD also is a strong global competitor in building batteries. Even Tesla and Toyota are customers for specific batteries. For context, BYD is estimated to have manufacturing capacity for 70-80 GWH of batteries per year and hold about a 15% global marketshare. This is about the same capacity as LG Energy, and is almost double the capacity of Panasonic (Tesla’s primary supplier). This is substantially more than double the 2022 capacity of SK ON (supplier to Ford, Hyundai, and VW). More importantly BYD began building large scale battery manufacturing plants in 2018 with an investment estimated at USD$1.51B. BYD has vertically integrated these operations all the down to a 2022 announced, Euro4.1B, battery plant, lithium mine, and refining operation in Jiangxi Province. This complex alone is estimated to have a capacity of 100000 tons of lithium for 30 GWH of batteries. Using LFP battery chemistry BYD installed 21.1 GWH of utility-scale battery storage in a 1Q2023. Like its much larger competitor, CATL, BYD is currently looking to bring Sodium-Ion Battery technology to the marketplace in volume during 2023. BYD would look to package lithium-ion and sodium-ion in dedicated and split-chemistry blade packaging.
BYD has only minor operations focused on electric buses and industrial applications in the United States started in the early 2010s. In Europe, BYD now sells in Norway, Sweden, Denmark, France, Germany, Netherlands, Belgium, Austria, Spain, and the UK. More countries are coming in Europe as BYD scales out sales and service operations that first launched in 2021. BYD also sells in India, Costa Rica, Australia, Brazil, Mexico, Israel, and Singapore. Sales efforts are starting soon in Ireland, Finland, Iceland, Uzbekistan, BYD’s CEO has noted that export sales will focus on market other than North America, Korea, Japan, Germany, France, and countries with large entrenched domestic manufacturing. The export goal for 2023 has been socialized as 300000, compared with only 56000 for 2022, for BYD.
Manufacturing operations are going global as a Thailand plant has been announced. A vehicle component manufacturing plant is announced for Vietnam. An announced USD$290M Chilean operation, located in Antogafasta, will construct up to 50000 tons of lithium iron phosphate cathode materials per year when completed in 2025 with 500 new jobs. BYD has ceased making internal combustion engine-only vehicles in March 2022. BYD has focused on vertically integrated manufacturing for EV/PHEV believing the Chinese market will tip in 2023 to buying a majority of NEV over ICE.
In North America BYD is better known as one of Berkshire-Hathaway’s successful Chinese investments where the stake has been significantly cutback as Charlie Munger’s investment takes profits off the table leaving a minor stake without risk. BYD is expanding global operations while competing fiercely in its home domestic market.
Risks for BYD in global marketspaces include geopolitical risks, access to subsidies for China-manufactured vehicles, safety reputation (anecdotal reports of problems), and getting regulator approvals for access to marketspaces.
In a companion segment see the Background of BYD and more context for its Alien Invasion.
For additional analysis and notes see http://www.ekalore.com
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