Tesla’s primary competitor in the Chinese market, BYD, has weathered supply disruptions as well as domestic and foreign names to achieve 350% year-over-year profit growth. This achievement underscores the rapid rise of one of China’s formidable industrial conglomerates.
The Warren Buffett-backed conglomerate’s third-quarter net profit was 5.7 billion yuan ($786 million), breaking the previous record of 2.8 billion yuan set during quarter 2. This result is achieved by the company’s successful campaign to reach European car manufacturers in their own home turf.
Sales of its battery-powered and hybrid vehicles hit a record high of 538,704 in the third quarter, up 194% from a year earlier.
Last month, the homegrown Chinese brand announced that it would start selling three new European models later this year.
BYD started its business in the mid-1990s, with its founder, Wang Chuanfu, successfully making batteries for early mobile phones. The former professor ventured into the auto business two decades ago after buying a state-owned rocket car corporation. His electric car ambitions have drawn billionaire Warren Buffet’s Berkshire Hathaway into a major investor.
BYD is currently at the forefront of Tesla’s formidable rivals as the electric car race becomes increasingly fierce.
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The Shenzhen-based company is controlling its mineral and battery supply chain as well as its chips and other electronics very well. Rival Tesla is one of its battery customers.
According to the China Association of Automobile Manufacturers, China’s sales of new energy cars increased 94 percent year-on-year to 708,000 units in September. BYD dominated the market with a 30 percent share in sales year to September, 21% ahead of the SAIC-GM-Wuling joint venture.
Neil Beveridge, a Bernstein analyst in Hong Kong, said the Chinese market accounts for about 7 out of every 10 electric vehicles sold globally. Beijing has set a target for electric vehicles to account for 25% of new car sales by 2025, but the country is on track to reach 35% next year and 50% within the next three years.
Beveridge said growth was not only driven by affordable vehicles and deep government support, but also by China’s early rollout of low-cost electricity and charging infrastructure.
“While China is taking the lead, the question is whether the rest of the world can catch up” he added.
Source: FT
Source: Vietnam Insider