How did “BYD” reach the top in the electric car industry?

Underestimating competition in the market can possibly lead to its success, as every field contains unexpected surprises. Many small companies that have not gained enough fame have ended their fiscal year with a high evaluation and unexpected revenues and profits.

The aforementioned situation applies to the Chinese electric cars “BYD”, which has sometimes been underestimated by American billionaire Elon Musk. The technological advancements used in it have been ignored and the idea that it would be a competitor to his company’s “Tesla” cars, which hold a strong position in the automotive industry, has been ridiculed.

It becomes clear here the importance of having a good understanding of the competitor, similar to the saying: “Know your enemy” which was previously said by the Chinese general Sun Tzu in his book “The Art of War”.

Contrary to expectations by Musk and perhaps many others, “BYD” company was not affected but instead outperformed Tesla in the last quarter of the previous year, becoming the leading company in the electric car industry. It managed to sell a larger number of battery-powered cars compared to its American competitive company.

Diversify the field

Despite being known as a giant in the electric car industry, “BYD” company’s activities extend to a wide range of fields, ranging from batteries to mining and semiconductors, and this is the main reason behind its success.

The company was founded by chemist Wang Chuanfu in 1995 in the city of Shenzhen in southern China, which is an important technological center in the country. The company started with 20 employees and a capital of 2.5 million Chinese yuan, which is approximately equivalent to 351,994 dollars.

In 1996, the company began producing lithium-ion batteries, which are used in modern smartphones, coinciding with the increasing use of mobile phones. The company continued to supply Nokia and Motorola with its batteries in 2000 and 2002, and at that time, these two companies were giants in the mobile phone industry.

The company “BYYD” was listed on the Hong Kong Stock Exchange in 2002 following its success in manufacturing lithium batteries.

Turning point

The company continued in this state until 2003 when it acquired a small car manufacturing company called “Xian Xinshuan Automobile”.

Two years later, her first car “F3” was launched, powered by an internal combustion engine. Then in 2008, the F3DM was launched, marking her first foray into the electric car industry, as it was an electric hybrid vehicle. In the same year, the company received a $230 million investment from Berkshire Hathaway, a company owned by American billionaire Warren Buffett, which supported BYD’s ambitions in the electric car market.

The company continued its progress in the field of electric cars, where it has become known as a battery manufacturer. In 2020, the company launched the “Blade” battery, which many believe contributed to the company’s growth in the electric car industry.

This battery is a “lithium iron phosphate” battery, and many battery manufacturers were avoiding it at that time because they believed it had low energy density.

The “BYD” company complied with adding the “Blade” battery in the Han car, which is a sports sedan released in 2020 and is considered a competitor to the Tesla Model S. It continued to be used in newly launched cars.

In 2020, a total of 130,970 fully electric cars were sold, while 1.57 million battery electric cars were sold in the previous year.

The secret of success

Blade’s contribution to BYD’s success in the electric car industry is due to the progress it has achieved. As a result, Blade enjoys strategic investments and ventures beyond car production.

“PXWY has demonstrated its strong presence in the high-tech industry, successfully achieving remarkable flexibility by providing batteries to prestigious companies such as Apple, a company that may be difficult to satisfy.”

Then Wang Chuanfu, the company’s founder, started to have a sufficient amount of money to establish a local Chinese brand for car manufacturing. He was able to focus on technological development of batteries, which made it easier for him to sell the products to other car manufacturing companies.

The company continued its ongoing and arduous efforts to improve the design, engineering, and quality of its manufactured vehicle range.

What has been achieved over the past 15 to 20 years has made it surpass Tesla in the fourth quarter of 2023.

Initially, the company did not immediately start manufacturing fully electric cars and instead continued to sell hybrid cars, which analysts considered to be the main factor in the company’s success initially.

When the Chinese electric car market first emerged, “BYD” chose to launch both battery-electric vehicles and hybrid electric vehicles simultaneously.

This strategy proved successful in dominating the market at a time when the transportation infrastructure was unstable, and users did not have a completely clear vision of the benefits of electric vehicles.

On the other hand, the characteristics of the plug-in hybrid electric car, such as high fuel efficiency and no concerns about range, have played a crucial role in helping the company achieve success in the market.

The government support cannot be ignored, as the Chinese government provides significant support to the electric car sector in addition to its own “BYD” tactics.

In recent years, Beijing has provided financial assistance to incentivize electric car buyers and has offered support to this industry. These measures began around 2009, as the company sought to enhance its efforts in the field of electric vehicles.

The company received a total of $4.3 billion in support from the government between 2015 and 2020. After achieving dominance in the electric car market in China, the company expanded strongly into international markets and began selling its cars in countries such as the United Arab Emirates, Thailand, and the United Kingdom.