All charged up

Made up 40% of new EV sales

As a challenging year comes to a close for the Chinese economy, BYD Auto will look back on its own achievements with some satisfaction.

Despite all the Covid-related disruption to supply chains, as well as the associated hit to consumer confidence, the Shenzhen-based carmaker has set sales records for nine months in a row since March.

In November it delivered another 230,427 pure electric and plug-in hybrid cars – or nearly 40% of new-energy vehicle sales in China in the period, says the China Passenger Car Association.

Industry insiders say that the slowdown in the economy may actually have helped BYD in persuading drivers to choose its brands over more expensive alternatives. BYD has also kept its supply chain moving through the paralysis of the pandemic better than its rivals, while its cars have been impressing consumers as desirable choices in the local market.

“BYD’s vehicles running on its blade batteries are increasingly well received by Chinese consumers,” Tian Maowei, a sales manager at a dealership in Shanghai, told the South China Morning Post this week. “BYD is now a reputable car brand in China.”

In the months ahead BYD will be trying to extends its own portfolio of vehicles, including the addition of at least two new brands targeting the premium end of the market.

A high-end SUV set for launch in the early weeks of next year has been designed to appeal to young professionals, “with disruptive technologies and products”, the company says. An anticipated price range starting at Rmb800,000 but peaking at Rmb1.5 million ($214,614) will also make the Yangwang (literally meaning “looking up”) the most expensive choice in the BYD garage.

Another more mysterious model is being built for a younger audience interested in style and fashion, the company adds, with the promise of a new brand “grounded in highly professional and personalised identities, to meet the diversified demand of consumers”.

Higher-end choices like these should give BYD more scope to stretch out its profit margin at a time when its vertically integrated manufacturing model is benefiting from economies of scale across its fast-growing production volumes.

Meanwhile, the Shenzhen-based company is accelerating its global expansion plans.

BYD announced this week it will start selling its first EV model called ATTO 3 in Japan starting early next year. The car will cost ¥4.4 million ($32,736), which is comparable with Nissan Motor’s electric Leaf, Japan Times reported, which sells for ¥3.7 million. BYD’s Japan team is planning to introduce two more models by the end of 2023 and more than 100 dealerships in Japan by the end of 2025, the company said.

Of course, one less positive story in an otherwise stellar year for BYD was the sale of some of its shares by longstanding investor Berkshire Hathaway, which merited intense debate this autumn. Rumours that Warren Buffett wants to exit one of his highest-profile investments in China have dragged down the stock at a time of wider weakness in the equity markets, contributing to a decline of almost 30% in BYD’s share price in Hong Kong since July.

Buffett, who first invested in BYD in 2008, disclosed the first sales of his position in August and disposals continued into November as Berkshire reduced its stake to a fraction below 16% of the company, down from just over a fifth previously.

But Stella Li, an executive vice president at the carmaker, fired back at the speculation that Buffett will say a fuller goodbye to BYD in comments to Bloomberg this week that it was “natural” to cash in some of his position, which has ballooned in value over the last 14 years.

“I don’t feel this is any indication he’s abandoned BYD,” she added, claiming that the American billionaire “loves” the company and its management.

BYD’s shares jumped 6.9% in Hong Kong on Wednesday morning, following her comments.

Even after the disposals, Berkshire’s remaining stake carries a value of around $4.5 billion, Bloomberg also noted. 

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