Chinese electric vehicle company BYD is not yet a household name in the U.S., but its bold blueprint to disrupt the global EV market could soon change that narrative.
The automaker, backed by Warren Buffett's Berkshire Hathaway, overtook Tesla as the world leader in EV sales in the final quarter of 2023, thanks in large part to its affordable cars.
"No one can match BYD on price. Period," Michael Dunne, CEO of Asia-focused car consultancy Dunne Insights, told the Financial Times. "Boardrooms in America, Europe, Korea, and Japan are in a state of shock."
A key BYD advantage lies in its complete control of its EV battery supply chain, enabling it to maintain low costs and undercut its competitors' prices, as Fortune notes. That it owns everything from raw materials to completed battery packs is a crucial element since batteries account for 40% of a new EV's price, according to Reuters.
The BYD battery itself is also "arguably the world's most advanced" of its kind, delivering "maximum energy density, safety and efficiency," Dunne said in his newsletter
It's concerning news for Tesla and other American EV automakers since those factors could help offset the 25% tariffs imposed in the U.S. for cars made in China added on top of a 2.5% tariff on all imported vehicles, according to Fortune.
Therefore, Dunne considered BYD to be in a "very good position" if it introduced an EV worth $20,000 to the U.S. The tariffs would bump the cost up to $26,000 at most, as he told the Financial Times, which is far less than the average price of $48,000 for a new car in the States.
Though most of its sales have come domestically, BYD has started to make waves overseas. Its Seagull compact sedan, starting at about $11,000, was an immediate hit in China and launched last September in Munich, while its Dolphin hatchback, starting at $33,000 in the U.K., is still 30% cheaper than Volkswagen's all-electric ID.3 hatchback, according to the Dunne Insights Newsletter.
BYD delivered nearly 1.6 million EVs in 2023, a 73% increase over the previous year, per the Associated Press, and that number could continue to climb after the company began selling cars in Indonesia, unveiled its plan to open a factory in Hungary, and was reported to have scouted locations in Mexico for another factory.
"The guy at BYD [company founder and CEO Wang Chuanfu] is better at actually making things than Elon is," the late Charlie Munger, who was Buffet's partner at Berkshire, said on the "Acquired" podcast last November, per Fortune.
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