BYD outstrips Tesla as Earth warms
- BYD electric cars’ price attractiveness boosts sales.
- The company now produces more cars than Tesla.
- BYD is also strong in trucks, forklifts and industrial vehicles.
Elon Musk once scorned the cars produced by Chinese EV manufacturer BYD, saying, “I don’t think they have a great product. I don’t think [the BYD car is] particularly attractive, [and] the technology is not very strong.” But last year saw the Chinese company produce more EVs than the US-based Tesla.
The brainchild of battery specialist Wang Chuanfu, BYD has grown over the last 30 years, and produced 42,000 more vehicles than its main Western rival, Tesla, in 2023. In addition to private vehicles, BYD is also the world’s largest manufacturer of battery-electric buses and has contracts with several metropolitan authorities, including Los Angeles, Amsterdam (Holland), and Frankfurt (Germany). The company is also highly active in industrial vehicle manufacturing, such as forklifts, in-facility vehicles like those found in large warehouses and distribution centers, and freight-carrying trucks.
Chuanfu is one of the world’s wealthiest individuals, having built a global business empire from its beginnings as a small producer of replacement batteries for consumer devices.
BYD electric cars priced competitively
The company is planning to open production facilities in Hungary to target the European market and has its sights set on a manufacturing plant in Mexico, from where it can approach the highly lucrative North American market. BYD electric cars prices are low: the company offers a vehicle in its domestic China market for the equivalent of $10,000. Small wonder that the highly-protected US automotive sector is worried. Even Elon Musk has backtracked on his criticism of BYD, stating that his comments were made years ago. Now, he says, “Their cars are highly competitive these days.”
Tesla’s market valuation at the time of writing was ten times more than BYD’s at $780bn, yet it’s worth remembering that market valuations are often driven by factors outside the pure market-led influences such as numbers of sales. In Tesla’s case, the “Musk” effect is a factor, where trust in a company, apparent in its market value, can be inflated or deflated by the reputation of the people making decisions at the head of the business.
Electric vehicles are in increasing demand. The International Energy Agency predicted that there would be around 14 million EV sales by the end of 2023, a 35% increase from the previous year. According to The Financial Times [paywall], executives at BYD hoped to capture 10% of the global market for electric vehicles.
Choosing a green car
Electric vehicles are often positioned as offering a lower overall carbon footprint from conception, through R&D and production, through use, and to eventual scrapping or recycling. The green credentials of any EV depend on many factors, though. For electric vehicle owners in France and parts of Scandinavia, the costs of running an EV and total life emissions are lower than in Poland, for example. In the latter, electricity generation is dominated by coal burning, while France and Scandinavia’s proportion of “green” energy is higher, lowering carbon output. In the UK, running an electric vehicle costs owners around 30% less than a petrol or diesel version of the same make and model.
Environmentalists are quick to point out, however, that green electricity – generated from renewable sources – is produced in addition to carbon-heavy “traditional” power, rather than as a replacement. Lowering one’s carbon footprint requires more action, therefore, than switching to an electrically-powered personal transport vehicle.
Cheap electric vehicles like those potentially offered by a new generation of Chinese manufacturers like BYD will therefore not, on their own, reduce climate change. The price of BYD electric cars makes them attractive, certainly, but in no sense the green panacea they may wish to be.
Increased demand for electricity will add weight to the global demand for fossil-fuel-generated electricity, not reduce it. The dream of a $10,000 electric car may assuage more consciences among drivers who can afford it, but do little to avert the accelerating climate catastrophe that current weather conditions globally are showing.
22 February 2024
21 February 2024
21 February 2024