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As the top producer of electric cars worldwide, Chinese BYD nearly surpasses Tesla

In its rear view mirror is a Chinese competitor for electric vehicle manufacturer Tesla

Build Your Dreams, or BYD, saw a spike in stock price this week following the company’s announcement that third-quarter earnings would more than quadruple over the previous year. In terms of quarterly production, BYD now leads Tesla, while in terms of global sales, it trails the American automaker. Its success also demonstrates the rapid expansion of China’s auto industry. As the country surpassed Japan this year to take the top spot globally in auto exports. It’s a glimmer of hope in a flagging Chinese economy beset by a catastrophic real estate crisis and historically high unemployment.

On the down side, however, Beijing’s relations with many of the nations that it exports electric cars to, namely the US and the EU, are becoming more strained. This is just another illustration of how difficult. It will be for Western nations to wean themselves off of their dependency on Chinese commodities as the globe transitions to new, cleaner technologies.

Build Your Dreams

BYD was first a battery manufacturer before branching out to build cars, unlike automakers who later expanded to build electric models. Wang Chuanfu, the company’s CEO, was born in Wuwei County in 1966 to a farming family in one of the poorest counties in China. He is currently estimated to be worth $18.7 billion. When Mr. Wang was a teenager, his elder brother and sister reared him as an orphan.

BYD Auto was predicted by US billionaire investor Warren Buffett to become “the largest player in a global automobile market. That was inevitably going electric” when he purchased a 10% investment in the company in 2008. He was correct, too. Thanks in great part to BYD, China now produces the majority of EVs worldwide. Beijing is also eager to hold onto its advantage. In June of last year, it provided EVs with the largest tax relief possible. Totaling $72.3 billion over the course of four years, just as sales were slowing down.

According to Analysts

As per analysts, BYD’s original business, batteries, is responsible for its rise. Being some of the priciest components of an EV, BYD may save a significant amount of money by producing them internally. Rivals, like as Tesla, get their batteries from other producers. A UBS analysis says that the BYD Seal outperforms Tesla’s Chinese-made base Model 3 sedan by 15%. The Seagull, BYD’s entry-level EV, retails for $11,000. A Model 3 vehicle that Tesla recently unveiled had a base price of about $36,000 in China. The Chinese corporation also appears to be successful outside of the EV industry; early this year, it overtook Volkswagen of Germany as China’s best-selling automaker.

BYD Vs Tesla

When questioned about BYD and its Chinese rivals in a 2011 television appearance, Elon Musk chuckled. At the time, Tesla was still a relatively new publicly traded business and had just shown off a prototype for the Model S. The first vehicle they planned to sell. Mr. Musk is undoubtedly regretting his comments now. According to recent data from the China Passenger Car Association. Tesla sold 74,073 Chinese-made electric vehicles in September, nearly 11% fewer than the same month the previous year.

China, the largest automobile market in the world, relaxed regulations to permit foreign companies. To fully operate production and sales activities in the nation in an effort to increase the number of electric vehicles sold there. Prior to that, businesses like Toyota and General Motors need a local partner in order to establish a manufacturing in China. Tesla took advantage of the chance when that changed. Even now, Tesla ranks second in China’s EV sales and is the country’s top exporter of electric vehicles built in China.

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