China's BYD to overtake Tesla as leading EV maker
Chinese carmaker BYD is on the verge of outpacing Tesla as the top global seller of fully electric vehicles (EVs). This shift, likely to happen in the current quarter, marks a pivotal moment in the EV market and reinforces China's increasing role in the worldwide automotive industry. As China competes with Japan for the lead in passenger car exports, companies like BYD and SAIC Motor Corp. are making significant strides in the field.
Changing competitive landscape
Bridget McCarthy, head of China operations for Shenzhen-based hedge fund Snow Bull Capital, stated, "The competitive landscape of the auto industry has changed." "It's no longer about the size and legacy of auto companies; it's about the speed at which they can innovate and iterate." BYD has been gearing up for this change for years, leaving other industry players scrambling to keep up.
Wang Chuanfu's vision for BYD
Since its founding, BYD's billionaire founder Wang Chuanfu has set ambitious targets for the company. Before the European Union launched an investigation into China's EV industry subsidies, Wang boldly proclaimed that it was time for Chinese brands to "demolish the old legends" of the automotive world. Despite facing obstacles in expanding overseas, BYD continues to outpace Tesla and other car brands domestically.
Warren Buffett's investment in BYD
In 2008, Warren Buffett's Berkshire Hathaway invested roughly $230 million for a nearly 10% stake in BYD. By the time Berkshire started reducing its holding last year, the value of its stake had skyrocketed about 35-fold to around $8 billion. The late Berkshire Vice Chairman Charlie Munger viewed BYD primarily as a battery play and lauded Wang as a genius and fanatical engineer.
Future challenges and opportunities
As BYD gets ready to introduce its third-generation EVs with more advanced technology, the company faces growing competition from newcomers like Huawei and Xiaomi. Yuqian Ding, head of China autos at HSBC Qianhai Securities Ltd., said, "When you become the No. 1, the mandate suddenly changes. You're going to redefine yourself — you're going to have to find a way to beat yourself."
