BYD is building up huge production capacities in China within a very short time. This means that the Chinese electric car manufacturer could soon overtake Toyota - and VW.
Shenzhen - The German car manufacturer, which has been spoiled by success for many years, has a hard time in China. One reason is the boom in the market for electric cars, which is largely bypassing them. According to the German Association of the Automotive Industry (VDA), VW, BMW, Audi, Mercedes and Porsche sold around 4.4 million cars in China last year, which corresponds to a market share of 19.1 percent. But in the rapidly growing electric car business, of which a total of 5.7 million were sold, the market share was only a meager five percent.
Chinese e-car manufacturers are expanding abroad: exports have tripled
The winners are Chinese manufacturers such as BYD, Nio, GAC Aion, Xpeng or Li Auto, who are rolling up the domestic market with their electric models. Foreign suppliers have also fallen behind, among other things, because they do not meet the tastes of Chinese consumers. Part of VW's problems in its most important market is likely to be the lack of entertainment functions and networking offers in the car. The Wolfsburg-based group has reacted to this by replacing the management of the software division Cariad and strengthening development in China.
The triumph of domestic suppliers alone is causing growing nervousness among foreign competitors. So far, the Chinese market has always stood for rich sales and profits. Even more dangerous, however, is that Chinese manufacturers are expanding into other countries with verve. According to the Chinese Automobile Association CAAM, Chinese car exports have tripled since 2020 to around 2.5 million vehicles annually. That's just a little less than Germany, according to the German Association of the Automotive Industry (VDA), 2.61 million vehicles were exported from Germany last year.
In Europe, the share of BYD & Co is still small, but it is growing. According to a study by Allianz Trade, competition from China could cost European manufacturers 24 billion euros if they increase their market share in Europe to ten percent by 2030.
BYD production of electric cars at the plant in Shenzhen, China © BYD/Image
Chinese e-car manufacturer BYD: Could soon overtake Toyota and VW
A look at BYD shows that this figure may still be too low. According to their German LinkedIn page, the Chinese manufacturer had sold a total of over 2022.3 million vehicles with alternative drives by the end of 3. It also prides itself on being the only manufacturer to develop and produce its own battery technology.
But that's just the tip of a huge iceberg. This year alone, BYD plans to sell three million cars, and the number is growing rapidly. According to WirtschaftsWoche, the manufacturer is building up huge production capacities in China, and within a very short time. The report is based on a satellite image analysis that shows the construction progress of new plants. According to this, BYD could soon produce more vehicles than Toyota or VW. Previously, BYD produced cars at five locations in Shenzhen, Xian, Changsha and Changzhou.
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Chinese e-car manufacturer BYD: Large production capacities will be built up within a very short time
For example, a new, huge BYD factory in Hefei in Anhui Province will soon be able to produce 1.32 million passenger cars annually. By way of comparison, a maximum of around 800,000 vehicles per year can roll off the production line at VW's main plant in Wolfsburg. In addition, BYD has had a large number of dormitories built for the workers at the factory. The speed at which construction is taking place is also food for thought. In Hefei, for example, only about ten months are said to have passed from the groundbreaking ceremony to the first car delivery.
That's not all. The new plant in Zhengzhou in Henan province is currently expected to have a capacity of 500,000 vehicles. In addition to the car plant, there are three huge battery factories here. In the coming years, the capacity is to be expanded to over one million units.
Chinese e-car manufacturer BYD: New production capacities are needed for domestic market
In Jinan, Shandong province, BYD is building a car factory and several battery factories. Vehicle production is said to have already started and will soon amount to 300,000 cars per year. Another plant with an initial capacity of 200,000 cars per year will be built south of the city of Fuzhou in Fujian province.
According to WirtschaftsWoche, the new BYD plants are primarily intended to serve the domestic market. In order to roll up the European market, the company would have to set up production on the Old Continent, as imports from China are too expensive. But that seems to be within the realm of possibility. "BYD's goal is to become a major player in Germany in the field of electric cars. Just as BYD is also a big player in China," said Lars Pauly, BYD sales manager in Germany, in an interview with the business magazine.