2024 Climate Tech Companies to Watch: BYD and its affordable EVs [MIT Tech Review]

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It may not yet be a household name, but BYD is gaining recognition outside China for its affordable and accessible EVs. Despite regulatory scrutiny in the West, it’s determined to lower the boundaries to manufacturing and transporting its vehicles across the globe.

Five years ago, BYD was just another Chinese carmaker in a crowded field. Since then, the Shenzhen-based company has rapidly become the undisputed leader of China’s automotive industry, as well as the world’s biggest producer of electric vehicles (including both pure EVs and plug-in hybrids).  

Much of that growth is thanks to billions of dollars in government subsidies. The company also benefited enormously from the pandemic, when rising gas prices led to an EV boom. 

Another key to its success is its tightly controlled in-house production line. BYD can source everything through its own subsidiaries, from batteries and motors to the majority of the components required to make its affordably priced EVs and plug-in hybrid cars, electric buses, and monorails. This approach doesn’t just allow it to manufacture its vehicles at a lower cost than its competitors; the tight control also lets it innovate across its supply chain, rapidly incorporating new features into production.

Key indicators:

• Industry: Electric vehicles
• Founded: 1995
• Headquarters: Shenzhen, China
• Notable fact: BYD sold 3,024,417 “new energy” vehicles, which includes battery-only vehicles and hybrids, in 2023. That’s a year-on-year increase of 62%.

Potential for impact

Although sales of EVs are increasing globally, the majority of those new sales are being made in China. To expand its international market, which accounted for just 8% of its total sales last year, BYD is rapidly building factories across the world and investing heavily in a massive fleet of car-carrying ships. 

Over the past 18 months, the company has pushed into new markets, including Brazil, Australia, and Thailand, and announced that its new factory in Indonesia has produced its first batch of cars. It has begun work on its first European factory, in Hungary, and recently unveiled plans to invest $1 billion into a plant in Turkey, which will produce 150,000 electric and rechargeable hybrid cars a year. 

Caveats

BYD’s biggest challenges remain low brand awareness outside China and regulatory scrutiny in the West, which is becoming increasingly hostile toward Chinese companies. The US recently raised its already hefty tariffs on Chinese EVs in a bid to discourage companies from importing them into the US. It is poised to do even more. 

In a similar effort to protect the European motor industry from an influx of lower-cost Chinese-made EVs, the European Union has slapped the company and other Chinese automakers with tariffs in addition to an existing duty tax. To circumvent this, BYD’s Hungarian and Turkey production centers would allow it to export to the EU tariff-free.

These sorts of international economic tensions are likely to persist, if not worsen, as nations strive to dominate the clean industries that will define the coming century. 

Next steps

The affordability of BYD’s models is a key part of their appeal. The company’s cheapest car is the Seagull, which sells for less than $10,000 in China. BYD plans to start selling the Seagull in Europe starting next year. It also intends to open its Hungarian factory within three years. 

Better known for its batteries than for AI, BYD has long lagged behind the likes of Tesla when it comes to software. Now, it’s working on narrowing the gap. It recently unveiled the Xuanji smart car system, which includes automated parking and AI-powered voice recognition. In addition, it’s collaborating with chipmaker Nvidia to bring the next generation of car-focused chips to its models starting next year. 

BYD is also among the first automakers in China to obtain a license for testing cars equipped with Level 3 autonomous-driving capabilities, which means they can take over full control under certain conditions on designated highways. These self-driving capabilities will be put to the test in a partnership with Uber, in which future BYD driverless cars could be deployed to pick up customers—if they receive approval from governments across the world, that is.

Explore the 2024 list of 15 Climate Tech Companies to Watch.