BYD surpassed Tesla as the world’s top seller of electric vehicles (EVs) at the end of last year, capping off the Chinese automaker’s meteoric rise. It delivered more completely electric vehicles than Tesla for the first time in the three months ending December 31, slashing Elon Musk’s company’s sales advantage for the year. So, how did a little-known Chinese battery manufacturer rise to become Tesla’s main opponent so quickly? BYD was created in 1995 in the Chinese megacity of Shenzhen by Wang Chuanfu, a low-key former scholar who currently controls the company. Wang claims that the letters BYD do not stand for anything specific. He stated that he chose a “rather strange” name to distinguish it from others.
It is China’s leading EV manufacturer, exporting electric taxis, buses, and other vehicles to Europe, South America, Southeast Asia, and the Middle East. Unlike Tesla (TSLA), it also produces plug-in hybrid vehicles. BYD’s largest overseas markets are now Israel and Thailand, where the Chinese manufacturer ranks first in EV sales. The Qin and Song models are its best-selling passenger automobiles. The Qin is a compact sedan that comes in plug-in hybrid and all-electric variants. BYD Song refers to a line of tiny crossover SUVs.
In comparison to Tesla, BYD is known for offering more cheap vehicles, which has helped them attract a broader range of customers
In comparison to Tesla, BYD is known for offering more cheap vehicles, which has helped them attract a broader range of customers. Its entry-level vehicle costs just over $10,000 in China, whereas the cheapest Tesla Vehicle 3 costs more than $32,000. The passenger cars produced by BYD are not currently available in the United States. However, its electric buses, which are manufactured in Lancaster, California, are sold throughout the country. According to his official CV in the company’s papers, Wang, an engineer, originally relocated to Shenzhen in the early 1990s to oversee a battery manufacturing business for a Beijing-based government research organization.
Government offices in China at the time were referred to as “iron rice bowls,” a common phrase denoting lifetime employment. However, Wang quickly left and formed BYD. His entrepreneurial path began concurrently with the opening of the Chinese economy to the rest of the globe. Deng Xiaoping, China’s former leader, established the country’s first special economic zone in Shenzhen, attracting hundreds of manufacturing firms attracted by the city’s open economic policies and lower labour and land costs. By 1997, Wang had expanded his tiny factory into a medium-sized cellphone battery manufacturer with yearly sales of more than 100 million yuan ($14 million).
The firm held nearly 8% of BYD as of late October, those shares are now worth 18.28 billion Hong Kong dollars
While that surprise decision angered the company’s strategic investors and triggered a 21% plunge in the company’s Hong Kong-listed shares, as Wang later described, he remained steadfast. “I build cars because I am optimistic about the future development of electric vehicles,” he said defiantly after the share price plunge, according to state-owned Beijing Business Today.
Wang was vindicated just five years later, in 2008, when he obtained a $230 million investment from his most renowned backer, Warren Buffett, who paid around $1 per share for a 10% interest. This vote of confidence helped lift the company’s shares by up to 1,370% in the following year. BYD introduced its first plug-in hybrid vehicle at the end of 2008. BYD has grown rapidly as an EV manufacturer since then, thanks in part to the Chinese government’s support for the industry. Buffett has been gradually trimming his stake in BYD since 2022, taking some of the enormous profits he has made. According to the most recent filing by Buffett’s Berkshire Hathaway, the firm held nearly 8% of BYD as of late October. Those shares are now worth 18.28 billion Hong Kong dollars ($2.3 billion).