Is BYD to Remain #1 EV Maker Due to Pricing?

Investment Analysis Clubs Macro Economic Trends and Risks
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Fortune magazine seems to think so.

BYD’s vertical integration seems to be the secret sauce.

The question yet remains about quality and reliability of BYD offerings. I expect that question will be answered once they are more widely available and tested against Tesla’a & Kia models.

Made in China is no longer a pejorative.
Tesla is exporting China made Model Y to Canada.[1]

“No one can match BYD on price. Period,” Michael Dunne, CEO of Asia-focused car consultancy Dunne Insights, told the Financial Times . “Boardrooms in America, Europe, Korea and Japan are in a state of shock.”

BYD can keeps its costs low in part because it owns the entire supply chain of its EV batteries, from the raw materials to the finished battery packs. That matters because a battery accounts for about 40% of a new electric vehicle’s price.

Currently in the U.S., made-in-China EVs are subject to a 25% tariff, which goes atop a 2.5% tariff on imported cars.

But if BYD or other Chinese carmakers were to come in with a $20,000 car, noted Dunne, they’d still be a “good position” despite the high tariffs, given that the average price of a new car in the U.S. this year is about $48,000.

Even today, BYD’s Dolphin hatchback starts at $33,000 in Britain, according to Reuters, or nearly 30% below the starting price of the VW’s rival ID.3 hatchback.

But BYD is planning to export much cheaper models to markets around the world, including Europe, South America, and Southeast Asia.

[1] https://www.autoweek.com/news/industry-news/a43684884/tesla-exporting-models-china-to-north-america/

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Interesting in light of the people who tell me other manufacturer can’t survive because uh, Tesla manufacturing, Tesla supply chain, etc. etc.

Of course BYD makes no headway in the US because of government action, something I’m sure Musk ignores in assessing his success.

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Is BYD to Remain #1 EV Maker Due to Pricing?

Did Fortune just discover the Economic Law of Supply and Demand and the market clearing function of price? Grains of sand on the beach are free, the supply is inexhaustible.

What Is a Clearing Price in Securities, Products & Services?.

Volume does not equate equate to yield, to return on capital. Each competitor has to determine their market segment.

BTW, Sandy Munro has praised BYD saying it will become the largest car company in the world. While this may worry some people remember Japan. They bought Rockefeller Center on the East Coast and Pebble Beach Golf Club on the West Coast but they didn’t overtake America despite all the fear mongering.

The Captain

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I find it surprising that you either don’t think manufacturing efficiency is important or that you think it impossible for Tesla to have a sustainable manufacturing advantage with EVs in the same way that Toyota had for a long time with smaller ICEs.

BYD has really only just begun competing directly with Tesla. Prior to this year, most of their sales were coming from hybrids, PHEVs, and BEVs priced well below the Teslas. That is still largely the case, at least in China.

It is a fascinating competition between two different sales strategies. BYD is the traditional many offerings in many categories with many models at different price points, while Tesla offers a small number of models with limited variations.

Worth noting that the only two business models shown so far to be successful in the EV industry are both very different from the norm. BYD’s advantage is that it makes its own batteries allowing it unprecedented control of EV costs. Tesla is singularly focused on production efficiency to the point of making only a handful of models and coordinating their development with that of the corresponding gigafactory. Both are vertically integrated, BYD probably more so.

We have yet to see whether the ICE/hybrid OEM business model can compete with these in the making of BEVs. Doesn’t seem promising so far. If not, then the question becomes which OEMs are able to embrace vertical integration or battery manufacturing or otherwise adapt the business practices of BYD and/or Tesla. That would seem to require a pretty major change in corporate culture, something huge companies often find impossible to pull off.

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BYD 5 best selling EVs in China:

Qin Plus-$14,000 to $24,700.
The Qin Plus, BYD’s bestseller — the top-ranked across all new energy vehicles in China — sold nearly 400 more units than Tesla’s Model Y in the six months ending in November.

The compact car comes in hybrid and battery-only versions. It’s part of BYD’s legacy series of cars named after Chinese dynasties.

Seagull-$10,310 to $12,545
The Seagull is a budget-priced boxy hatchback that BYD launched less than a year ago in spring 2023. The battery-only car comes in neon yellow-green, peach, black and white.

Song Plus NEV-$22,325 to $29,310
a compact SUV that comes in hybrid and battery-only versions.

Yuan Plus- $18,972 to $22,883
BYD’s Yuan Plus is a compact, battery-only SUV.

Dolphin-$16,317 to $19,530
BYD’s small Dolphin electric car is another one of the company’s mass market vehicles that comes with the internally developed blade battery.

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