BYD's Rise in the Electric Car Market: A Threat to Tesla's Dominance?

A Glimpse into the Emerging Competition in the EV Industry

Exploring BYD's Rapid Expansion and Global Competitiveness

The CEO of Tesla, Elon Musk, no longer dismisses China's electric car manufacturer BYD. This company has not only effortlessly surpassed Tesla in the world's largest automotive market, China, but is also expanding its influence internationally. BYD now claims it must compete with long-established legends in the industry as it globalizes and faces other Chinese automakers.

One such legend is the American automaker Ford, with Chairman Bill Ford Jr. believing that "U.S. car companies aren't fully ready to compete with Chinese rivals that the world is paying attention to in the electric vehicle space." Just this June, he told Fareed Zakaria, "They have progressed very quickly, they have developed them on a large scale, and now they are exporting them." Musk once ridiculed BYD's car quality in a 2011 interview, but he tweeted that it was "years ago" and that "their cars are very competitive these days."

Charlie Munger, Warren Buffet's right-hand man at Berkshire Hathaway, played a role in the investment decision in BYD. Earlier this year, he stated, "Berkshire has never had a holding that's done better than BYD," adding that BYD is "way ahead of the Chinese Tesla."

This week, Wang Chuanfu, the Chairman of BYD, was reported by Reuters as urging Chinese competitors to make China an automotive powerhouse, describing him as a combination of "Thomas Edison and Jack Welch" for Chinese rivals.

He emphasized, "I believe it's time for Chinese brands to set a production milestone" and stressed that "it's emotionally necessary for 1.4 billion Chinese to witness Chinese brands globalizing."

BYD also shared videos about the history of other Chinese car manufacturers in the electric vehicle manufacturing industry, such as Nio, Xpeng, and Li Auto. The narrator concluded with the directive, "Our stories may differ, but they share the same direction. Erase the old legends and achieve a new global brand."

Nio's CEO, William Li, responded on Weibo, "I am proud of China's auto industry! We should learn from BYD's success." Other industry figures echoed similar sentiments.

However, Wang Weian Li, Chief Technology Officer of Great Wall Motors, reminded car manufacturers that they are all competing against each other. He brought up a similar fact last month when a consortium representing 16 automakers, just two days after pledging to avoid "unreasonable pricing," revoked this commitment, citing China's anti-monopoly law.

Regarding the buzz around BYD's video within China, some rival companies warned that regulatory risks for Chinese car companies could increase in Europe and elsewhere. While the United States has curbed the influx of Chinese cars into its market through protective trade policies, Europe has been less interventionist.

Regardless of the dynamics, Chinese automakers with strengths in battery and clean energy technologies are poised to benefit from the shift towards electric vehicles. Ford emphasized, "They may not be here, but we know they are coming. We need to be ready for the competition at some point."

Jim Farley, Ford's CEO, forecasted at a financial event last May, "We view China as a major competitor, not GM or Toyota. We see a future where China is a powerhouse in the electric vehicle market."