China's BYD was a battery maker trying to build cars when it showed off its newest model in 2007. American executives at the Guangzhou auto show
gasped
at the
car's uneven purple paint
job and
the poor fit of its doors. .
"They were
the laughing stock of the industry
," said Michael Dunne, a China auto industry analyst.
Nobody laughs
at BYD now.
The company surpassed Tesla in global sales of all-electric cars late last year.
BYD
is building assembly lines in Brazil, Hungary, Thailand and Uzbekistan
and is preparing to do so in Indonesia and Mexico.
It is rapidly expanding its exports to Europe.
And the company
is poised to overtake the Volkswagen Group,
which includes Audi, as the market leader in China.
BYD Chinese electric cars.
Photo: The New York Times
BYD's sales, more than 80% of them in China,
have increased by about 1 million cars in each of the last two years
.
The last automaker to achieve that in just one year in the U.S. market was General Motors, and that was in 1946, after GM suspended passenger car sales for the previous four years due to World War II.
"BYD's growth
is unlike anything the industry has seen in many decades
," said Matt Anderson, curator of transportation at the Henry Ford Museum in Dearborn, Michigan.
Based in Shenzhen, the center of China's electronics industry, BYD has shown how Chinese automakers can take advantage of the country's dominance in electrical products.
The largest electric car market in the world
No company has benefited as much from China's adoption of battery electric cars and plug-in gasoline electric cars.
These vehicles together account for
40% of China's auto market, the world's largest,
and are expected to account for more than half next year.
BYD sales have increased by about 1 million cars per year.
Photo: Gilles Sabrié/The New York Times
Like most Chinese automakers, BYD does not sell its cars in the United States
because Donald Trump-era tariffs remain in place
, but BYD does sell buses in the United States.
BYD is leading China's electric car export push and is rapidly building
the world's largest car carriers
to transport them.
The first of the ships, BYD Explorer No. 1, is on its maiden voyage from Shenzhen with 5,000 electric cars on board and is expected to arrive in the Netherlands on February 21.
With the success of China and BYD has come greater scrutiny.
BYD is rapidly building the world's largest car-carrying vessels.
Photo: Ore Huiying/The New York Times
Tesla CEO Elon Musk warned about the strength of Chinese electric car exports in a company earnings conference call in January.
"Frankly, I think
if trade barriers are not put in place
, they will virtually
demolish most other companies in the world
," he said.
Help from the Chinese government
Rapid advances by BYD and other Chinese automakers in Europe have sparked a European Union investigation into
Chinese government subsidies
and could result in tariffs.
A saleswoman and customer at a BYD car dealership in Shenzhen.
Photo: Gilles Sabrié/The New York Times
BYD's annual reports show a total of
$2.6 billion in government assistance
from 2008 to 2022. And that doesn't include other aid, like making sure taxi companies in BYD's hometown
buy only BYD electric cars.
BYD declined to comment on the subsidies.
In a statement, the company said BYD Explorer No. 1, its new ship, "signals an important milestone for BYD as it expands into international markets and contributes to the development of the global new energy vehicle industry."
China has built enough factories to make more than twice as many cars as its market can buy.
This has led to a price war in China,
particularly between BYD and Tesla
, with discounts causing huge losses.
One of BYD's newest models, the subcompact Seagull, starts at
less than $11,000.
BYD headquarters.
Photo: Gilles Sabrié/The New York Times
A housing crisis and a stock market crash are making Chinese consumers
more cautious about buying a car
.
But BYD's low manufacturing costs have left it better positioned than most rivals
to survive any
prolonged sales slowdown and industry shocks.
Origin and destination
BYD Chairman Wang Chuanfu founded the company in 1995 to make batteries for Motorola and other consumer electronics companies.
He had studied at Central South University in Changsha, an elite institution famous for battery chemistry research.
But
he dreamed of making cars.
BYD now has
its own walled city in Shenzhen,
a southeastern city next to Hong Kong.
An airport-style monorail transports workers from the company's 18-story apartments to BYD's office towers and research labs.
Liu Qiangqiang, an engineer at the Shenzhen center, said his auto development team's staff had nearly tripled since he joined the company from GM 15 months ago.
"The pace
is fast
," he said.
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