The electric car market is going through a series of circumstances that pose a major challenge for the brands that dominate the production of this mobility technology. However, one Chinese car brand has managed to not only overcome current obstacles, but also increase profits by as much as 400%.
The BYD brand achieves the impossible: 400% growth in the midst of a crisis
The electric car crisis is mainly due to a shortage of demand due to high prices of this technology. Added to this is the obstacle of hostilities between Russia and Ukraine. The pandemic has also contributed to the problem by making imports more difficult and creating disruptions in the production of parts needed for electric cars.
The European market is a target that Chinese manufacturers have coveted for several years. As deals are signed with brands like Stellantis to produce 100,000 zero-emission cars, several EU countries are calling for restrictions on Chinese imports, which threaten local manufacturers with low prices.
Amid these disagreements, electric and hybrid car brand BYD has seen an impressive 400% growth over the past year, even as electric vehicles see a sharp drop in price. While most Asian companies operate at below-cost prices, BYD went from 2% to 10% of the market.
BYD’s key to success: mastering all stages of the supply chain
BYD began life in 1995 as a company specializing in manufacturing batteries for a mobile phone industry that was beginning to grow rapidly. As a supplier to brands such as Motorola, Siemens and LG, the company hit the mark by targeting the market that would experience the fastest growth this century.
In 2003, BYD became a brand of hybrid cars with rechargeable batteries. This is how it laid the foundation for the success of its business model, because every vehicle manufactured in its factories is produced from the battery to the chassis to the engine. This is howin 2010, the company managed to capture 5% of the local market, with quality models at affordable prices.
After this stage, the company lost momentum due to the exponential growth of competitors, geopolitical conflicts that affected the market, the semiconductor crisis that drove up the price of batteries, and the conflict between Russia and Ukraine. The pandemic would be a blow to most brands, but not to BYD, which relies almost entirely on imported inputs.
A Chinese car brand attacks the European market: local brands are worried
European manufacturers like Volkswagen, which dominated the market for fifteen years, are in great difficulty. On the one hand, the European Union plans toban combustion engines by 2035, on the other hand, the prices of electric cars have exploded due to the increasing cost of raw materials for batteries.
It is precisely China that retains a monopoly on the production of automotive batteries, so a booming electric car brand like BYD could threaten to shake the foundations of European industry.
Quelle est la meilleure énergie renouvelable ? La réponse va vous surprendre
A Chinese automobile brand in Europe: for or against?
France and Spain are leading a group of EU countries calling for tougher measures on the import of Chinese electric cars. To justify this request, they invoke unfair competition led by the State itself.