China’s growing importance in the automotive sector
is particularly evident in the manufacturer BYD. The electric car manufacturer led by founder and CEO Wang Chuanfu (57) has big plans. The company wants to do so this quarter Tesla overtake in the sale of fully electric vehicles, as shown according to a report by the Bloomberg news agency.
At the moment, Tesla is still leaving BYD behind in key metrics such as sales, income and market capitalization. Analysts at Bernstein, however, expect some of these gaps to close next year – estimating that Tesla will generate $114 billion in sales compared to BYD’s $112 billion in sales.
Chinese car manufacturers, which have been subsidized by the state with up to $100 billion in recent years, have built up high production capacities that significantly exceed current domestic demand. So increasing car experts are the logical consequence: After China in recent years the USA, South Korea and Germany has already overtaken it, it will probably do the same as the world’s largest car exporter this year Japan leave behind. Of the 3.6 million vehicles shipped from mainland China by October of this year, 1.3 million were electric vehicles – i.e. pure electric cars and plug-in hybrids. Thanks to numerous new mega-freighters that will leave Chinese shipyards in the next two to three years, China is likely to significantly increase its e-car exports – especially to Europe, experts predict
.
In addition, there is a tense economic situation. While Tesla boss Elon Musk (52) warned that not enough consumers can afford his electric vehicles given the current high interest rates, Wang Chuanfu is going on the offensive. His company offers half a dozen models in larger volumes that cost much less than what Tesla charges for its cheapest Model 3 sedan in China.
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The Chinese company has big plans for the coming years, as Bloomberg reports. Analysts expect BYD to launch its third generation of electric cars as early as next year. This should offer even more technology, such as automated driving. Even though the number of automotive competitors in China has shrunk from over 500 to around 100, there are always new market participants, such as the tech giant Huawei Technologies.
Tesla boss now sees BYD as a competitor
Elon Musk is now also taking competitors from China seriously. After a Tesla fan club shared a clip online in May in which the Tesla boss made fun of BYD’s cars during an appearance on Bloomberg Television in 2011, the CEO now said that BYD’s vehicles ” “very competitive these days.”
In contrast to Musk, BYD boss Wang avoids social media and the spotlight. In an uncharacteristically brash speech, however, he delivered weeks before the start of an EU investigation into Chinese subsidies Electric car industry Wang said the time had come for Chinese brands to destroy the “old legends” of the auto world.
The extremely rapid growth also makes BYD attractive for investors. In 2008, the investment company invested Warren Buffett (93), Berkshire Hathaway, around $230 million in a nearly 10 percent stake in the Chinese automaker. When Berkshire began reducing its holdings last year – BYD shares were trading near their all-time highs – the value of its stake had increased 35-fold to around $8 billion.
Star designer goes to China
BYD, short for “Build your Dreams,” acquired a bankrupt state-owned automaker in 2003 and introduced its first plug-in hybrid car, the F3DM, in 2008. A New York Times journalist called the small car “about as trendy as a 2000 Toyota Corolla” in a review at the time. The company only sold 48 of them that year.
But management quickly brought new know-how to the company, lowered prices and changed the design. In 2016, the company hired Wolfgang Egger (60) as head of design, who had previously worked for Audi and Alfa Romeo was active. Other international executives were also poached, including the head of exterior design at Ferrari and a top interior designer at Mercedes-Benz. The range has also increased in the price segment. The now most expensive model – the BYD Yangwang U8 Sport Utility Vehicle – costs 1.09 million yuan (around 139,000 euros).
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The car manufacturer is also planning to do so in Hungary to build its first European car factory. Thousands of jobs will be created there. The Chinese company currently already has facilities in theUSA,Brazil,JapanandIndia.