The Wall Street Journal video discusses Chinese electric vehicle (EV) manufacturer BYD, backed by Warren Buffett, and its growing dominance in the Chinese EV market. By 2022, China will account for more than half of all EVs sold worldwide, making it a crucial market for any company looking to dominate the growing industry.
While Tesla is the best-known EV brand, BYD has surpassed it in terms of overall sales with its strategy of offering consumers a range of affordable all-electric or plug-in hybrid options. Although Tesla has higher profit margins, BYD’s vertical integration, particularly its battery production, provides stability along the supply chain, even during disruptions.
The two companies use different types of batteries, with BYD using a lithium iron phosphate battery known as LFP. This battery is cheaper but has a shorter range, while Tesla primarily uses a more expensive battery that can charge a car for longer distances.
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Who is leading the EV market in China?
China leads the world in the electric vehicle (EV) industry, with the highest investment in EV research and development, earning the top score in Roland Berger’s e-mobility index in 2021. China’s EV production will increase 1.6 times year-on-year to reach 3.5 million units in 2021, with EV market revenue reaching US$102.2 billion.
Battery electric vehicles (BEVs) are more popular than plug-in hybrid electric vehicles (PHEVs), with sales of 2.9 million and 600,000 units, respectively.
BEVs have a 10.9 percent market share in China, and the country’s expanding EV charging infrastructure is adding to the appeal of BEVs. BYD is China’s top EV manufacturer and the world’s third largest, with a global EV market share of 8.8 percent in 2021, behind only Tesla and the Volkswagen Group.
Six Chinese models were among the top 10 best-selling EVs in the world in 2021, with SAIC-GM-Wuling leading the way for passenger BEVs with sales of over 424,350 units, surpassing Tesla and BYD.
BYD, which already dominates the electric vehicle market in China, is now beginning to expand its global presence. Although its passenger EVs are available for purchase in a few countries other than China, the United States is not one of them, partly due to the ongoing tensions between the two countries. At present, it is difficult for any Chinese automaker to claim that it is making a move into the U.S. market.