(Bloomberg) — Uber Technologies Inc. will team up with BYD Co. to put 100,000 electric vehicles onto the ride-hailing company’s platform, in a major deal between American and Chinese businesses that notably excludes the US.
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Under the multiyear partnership, the two companies will offer drivers lower vehicle pricing and financing. The tie-up will start in Europe and Latin America, then expand to the Middle East, Canada, Australia and New Zealand, Uber and BYD said Wednesday in a statement.
The alliance bolsters Uber’s efforts to transition the fleet of vehicles on its ride service to EVs — an initiative Chief Executive Officer Dara Khosrowshahi warned early this year was running off track. It’s also a boon to BYD, which has been one of the world’s fastest-growing automakers the last few years. That expansion has largely been driven by climbing the sales ranks within China’s massive car market, and the company is now embarking on an expansion into countries where its brand is less established.
“We look forward to seeing our cutting-edge EVs become a common sight on the streets of cities worldwide,” said Stella Li, the executive vice president of BYD and chief executive officer of BYD Americas.
Uber shares jumped more than 2% shortly after the start of regular trading Wednesday in New York. BYD shares have risen more than 6% this year in Hong Kong, boosting the company’s market capitalization to HK$734.6 billion ($94 billion).
The pairing up cuts against increasing tensions between Washington and Beijing over the future of the automotive industry. China has built a formidable lead in batteries and the EV supply chain, and the US has been trying to push back against that dominance with a combination of punitive tariffs and tens of billions of dollars in tax credits for companies and consumers.
Uber and BYD make no mention of the US in their statement, likely because the market is virtually closed off to the carmaker. President Joe Biden has vowed to increase tariffs on Chinese EVs to 102.5% this year, ratcheting up a rate that former president Donald Trump raised to 27.5% during his four years in the White House.
The European Union and countries including Canada have since followed suit in adopting or considering higher duties on Chinese EV imports, which could further complicate Uber’s objective for 100% of its rides in US, Canadian and European cities to take place in electric vehicles by 2030.
One of the company’s challenges has been the dearth of affordable, long-range and relatively spacious EVs to compete with low-cost cars powered by combustion engines that are popular among ride-hail drivers, such as the Toyota Prius.
BYD has been making a concerted push to manufacture vehicles outside its home market, with a new plant in Thailand now online and plans for factories in Brazil, Hungary and Turkey. In February, the company agreed to supply cars to Vemo, a Mexico City-based startup offering electric taxis through Uber’s app. It also was one of the lead sponsors of the Euro 2024 and Copa America football tournaments, boosting brand awareness across Europe and the Americas.
EV Barriers
Surveys have shown the price of EVs and availability of financing remain key barriers for drivers to switch from gasoline-powered cars, the companies said. BYD vehicles have lower costs of maintenance and repair, and are well-suited for ride-sharing due to the wide range of models, they said.
The deal may also include discounts on charging, vehicle maintenance, insurance and lease and financing offers.
Uber teamed up years ago with US rental-car company Hertz Global Holdings Inc. to offer perks to drivers renting Teslas, though Hertz has recently been selling off much of its EV fleet.
The ride-hailing company also has partnered with charging network providers such as EVgo and Revel Transit Inc. to offer discounts to its drivers. In London, Uber has committed to investing £5 million ($6.4 million) in public EV chargers.
Uber still has a ways to go to fully transition its millions of drivers to EVs. As of the end of the first quarter, Uber said 8.2% of ride-share trip miles in the US and Canada and 9% of miles in Europe were completed in zero-emission vehicles.
In their joint statement, Uber also touted the automated-driving capabilities of BYD’s vehicles, and the two said they’re well-placed to scale autonomous-vehicle capability in the future. Uber currently works with Alphabet Inc.’s Waymo to provide driverless rides in Phoenix and is offering autonomous deliveries in some parts of the US and Tokyo.
Shares of Uber and its smaller peer Lyft Inc. jumped after Bloomberg reported earlier this month that Tesla had postponed its unveiling of robotaxi prototypes. While Chief Executive Officer Elon Musk has for years harbored ambitions to take on Uber and Lyft with an app-based ride service based on a shared fleet of driverless Teslas, the EV maker has yet to put a driverless vehicle on the road or launch a ride-hailing service.
–With assistance from Ed Ludlow and Danny Lee.
(Updates share move in the fifth paragraph.)
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