BYD exhibits its cars ahead of the Munich Motor Show in September. Krisztian Bocsi/Bloomberg

China’s BYD Co. bills itself as the biggest car brand you’ve never heard of. It might need a different tagline soon.

The automaker is poised to surpass Tesla Inc. as the new worldwide leader in fully electric vehicle sales. When it does – likely in the current quarter – it will be both a symbolic turning point for the EV market and further confirmation of China’s growing clout in the global automotive industry.

In a sector still dominated by more familiar names like Toyota Motor Corp., Volkswagen AG and General Motors Co., Chinese manufacturers including BYD and SAIC Motor Corp. are making serious inroads. After leapfrogging the US, South Korea, and Germany over the past few years, China now rivals Japan for the global lead in passenger car exports. Some 1.3 million of the 3.6 million vehicles shipped from the mainland as of October this year were electric.

“The competitive landscape of the auto industry has changed,” said Bridget McCarthy, head of China operations for Shenzhen-based hedge fund Snow Bull Capital, which has invested in both BYD and Tesla. “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 began preparing long ago to be able to do this faster than anyone thought possible, and now the rest of the industry has to race to catch up.”

The passing of the EV sales crown also reflects the shift in competitive dynamics between Tesla’s Elon Musk, the world’s richest executive, and BYD’s billionaire founder Wang Chuanfu.

Whereas Musk has been warning that not enough consumers can afford his EVs with such high-interest rates, Wang is firmly on the offensive. His company offers half a dozen higher-volume models that cost much less than what Tesla charges for its cheapest Model 3 sedan in China.


When a Tesla owners’ club shared a clip in May of Musk snickering at BYD’s cars during a 2011 appearance on Bloomberg Television, Musk wrote back that BYD’s vehicles are “highly competitive these days.”

The likely change in the global EV pecking order marks the realization of a goal that Wang, 57, set back when China was just starting to foster its now world-beating electric car industry. While BYD continues to pull away from Tesla and all other auto brands at home, replicating its runaway success abroad is proving tricky.

Europe looks poised to join the US in slapping Chinese car imports with higher tariffs to shield thousands of manufacturing jobs. Other countries’ EV markets are still in their infancy and aren’t nearly as lucrative. Management views the US as virtually off-limits due to the escalating trade tensions between Washington and Beijing.

Wang is no Musk – he eschews social media and largely steers clear of the limelight. But in an uncharacteristically brash address delivered weeks before the European Union opened an investigation into how China has subsidized its EV industry, Wang declared the time had come for Chinese brands to “demolish the old legends” of the auto world.

While many car buyers outside of China are still only dimly aware of BYD, Warren Buffett surely isn’t. In 2008, Berkshire Hathaway Inc. invested about $230 million for an almost 10% stake in the Chinese automaker. When Berkshire started paring its holding last year – BYD shares were trading near their all-time high – the value of its stake had soared roughly 35-fold to around $8 billion.

The late Berkshire Vice Chairman Charlie Munger saw BYD primarily as a battery play. On Bloomberg TV in May 2009, he said the company was working on “one of the most important subjects affecting the technological future of man.” Munger’s family had invested in the company years ahead of Berkshire, and he told an interviewer weeks before his death in November that he had tried to dissuade Wang from getting into the car business.


BYD acquired a failing state-owned automaker in 2003 and introduced its first plug-in hybrid – called the F3DM – in 2008. A New York Times reviewer panned its exterior design, calling the compact “about as trendy as a Y2K-era Toyota Corolla.” The company sold all 48 units in the first year.

Around that time, China started subsidizing plug-in car purchases. Support from the government extended from cities and provinces to the national level, spanning tax breaks for consumers, production incentives for manufacturers, help with research and development, and cheap land and loans.

As a rare automaker that also made its batteries, BYD was uniquely positioned to benefit. Before entering the car business, it was the first Chinese lithium-ion supplier to Motorola and Nokia in the early 2000s. To scale up output before consumers embrace EVs, the company targeted automotive segments that would need lots of cells. Its first electric bus launched soon after the F3DM.

“BYD was a miracle,” Munger told the podcast Acquired in an episode that aired in October. He called Wang a genius, saying he kept the company from going broke by working 70-hour weeks and described him as a fanatical engineer. “The guy at BYD is better at actually making things than Elon is,” he said.

Roughly a decade and a half into making cars, BYD had mustered the smarts to bring plug-in car prices down to levels comparable with combustion engine vehicles. But its lineup still lacked good looks.

In 2016, the company hired Wolfgang Egger as design chief, a role he previously played for Audi and Alfa Romeo. It also lured away other international executives, including Ferrari’s head of exterior design and a top interior designer for Mercedes-Benz.


BYD’s Wang Chuanfu greeting attendees at an event in Santiago on Oct. 6. Cristobal Olivares/Bloomberg

By the time China invited Tesla to build the country’s first car plant fully owned by a foreign entity, BYD was no longer resigned to making no-frills econoboxes. Now, its most expensive model – the Yangwang U8 sport utility vehicle – costs $152,600.

While the level of government subsidies has played a role in China’s tremendous EV growth, Paul Gong, UBS Group AG’s head of China autos research, believes the bigger factor is the level of competition that this support spawned.

“They have to work on the innovation, they have to try and find what consumers want, and they have to optimize their costs to make sure their EVs are competitive in this highly competitive market,” Gong said. After tearing down a BYD Seal sedan and finding a 25% cost advantage over legacy competitors, his team concluded that Chinese manufacturers are likely to own a third of the global car market by the end of the decade.

For now, Tesla still has BYD beat on key metrics including revenue, income, and market capitalization. Analysts at Bernstein expect some of those gaps to close considerably next year – they’re projecting Tesla will generate $114 billion in sales to BYD’s $112 billion.

Wang grew up the second youngest of eight children in the impoverished village of Wuwei in eastern China’s Anhui province. His parents died when he was a teenager, and his older siblings supported him through his high school and university education.

Through the early years of his working life, Wang was based in Beijing, working as a mid-level government researcher on rare-earth metals critical to batteries and consumer electronics. He founded BYD in 1995 in Shenzhen with the help of an almost $300,000 loan from a friend. He’s now worth $14.8 billion, according to the Bloomberg Billionaires Index.


Wang has racked up the air miles in 2023, crisscrossing the globe between auto shows, new market launches, and meetings with heads of state. He’s touched down in countries including Japan, Germany, Vietnam, Brazil, Mexico, and Chile – a travel schedule befitting the leader of a company that’s set up shop in some 60 countries and territories in just the last two years.

Analysts expect BYD to launch its third-generation EVs next year offering more technology, such as automated-driving capabilities. That’s one area where BYD falls short with its more affordable products versus upstarts like Nio Inc. and Xpeng Inc. Even as the number of auto rivals in China has shrunk from over 500 to around 100, new entrants continue to emerge, including well-funded tech giant Huawei Technologies Co.

When Bloomberg News asked Wang in March whether BYD had aspirations to be as big as Toyota, which in 2023 will be the world’s top-selling overall carmaker for a fourth straight year, he said the development of the EV industry will lead to an industry reshuffle.

“How a car company performs will depend on its tech and response,” he said. “BYD in China’s electrification is the winner for now, but how it will go tomorrow, we can’t say for sure. But we will lean into our advantages and keep making good products.”

But staying at the top will require a different mindset than getting there, said HSBC Qianhai Securities Ltd. head of China autos Yuqian Ding.

“When you become the No. 1, the mandate suddenly changes,” she said. “You’re going to redefine yourself – you’re going to have to find a way to beat yourself.”


With assistance from Jinshan Hong, Linda Lew, Chunying Zhang, James Mayger and Tom Hancock.

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