Is BYD the New Tesla Killer?
BYD is currently destroying the automotive markets all around the world. Thanks to China’s massive push towards Electric vehicles. BYD is a vertically integrated company that makes everything from Automobiles to Electronics and FinDerams. The brand that produces automobile components and electric vehicle batteries
Founded by Wang Chuanfu in 1995, BYD is the short form for Build your dream. The brand first started off as a battery manufacturing company. Quickly sensing the market. BYD Auto was launched in 2003 and has grown to become the world’s largest manufacturers for Electric Vehicles
Elon Musk and BYD
Musk has had different thoughts about BYD all through the years. During the start of BYD as a company when it was a domestic player in China. Tesla and Elon Musk often joked on BYD and the design language of the brand. Unable to gauge the potential that the brand possessed then and even now!
Funny enough in 2011, when Tesla was just on the roll in the rest of the world. In a 2011 Bloomberg interview, Elon Musk laughed out when the reporter suggested that BYD was their potential rival and when asked the question “Have you seen their car?” Musk replied that he didn’t see BYD as their competition.
Changing the stones, he replied in 2023 on a Post on X formerly known as “Twitter” “That was many years ago their cars are highly competitive these days”.
In the meantime, China’s push towards electric vehicles and electric vehicle technology has enabled BYD on their explosive growth in the world. Raw materials have rather been easy to source for BYD since countries in the African continent have signed various trade pacts with China.
A Chinese Brand
People couldn’t trust BYD for a lot of reasons. In India, People have a stigma towards China and Chinese products. BYD being one of them. The design language has been rather interesting and different compared to other brands in the world.
The 6Pistons Team and I have had the opportunity to test drive BYD vehicles and we have also had to face the rather “Different” and “Wanna-be futuristic” looking interior and UI.
The driving dynamics are fun – specially for the seal. Its fast and the head rush that it gives thanks to the electric drivetrain is just something else that no 60L rupee car can give
Batteries
We know batteries are difficult things to deal with. There is technology and there is safety. The battery technology is new and there are advances in the field every day.
BYD has made significant enhancements in developing new battery technologies. BYD has heavily invested in core component development spending almost CN 8 billion (INR 95Cr) in 2021. A rise of 13 percent from 2020. BYD spent a staggering CN 39.91 billion (INR 478 Crore) on R&D employing close to 102,000 people of which 60% of this workforce is under the age of 30.
The annual salary of each R&D person is around CN 212,000 (INR 25.4L)
BYD enjoys lower labour costs and capital as it is based out of China. Building batteries from NiCD to high value nickel – metal hydride (NiMH) and lithium ion Batteries (Li-Ion)
1. Lithium Iron Phosphate (LFP) Batteries:
BYD is known for its expertise in LFP batteries, particularly their Blade Battery, which emphasizes safety, durability, and high energy density. These batteries are widely used in electric vehicles (EVs) and energy storage systems. The Blade Battery features BYD’s Cell-to-Pack (CTP) technology, enhancing energy density and optimizing space.
2. Nickel Cobalt Manganese (NCM) Batteries:
BYD also manufactures NCM batteries, which are highly favored in consumer electronics and EVs due to their superior energy density and performance. These batteries are part of BYD’s comprehensive supply chain, ranging from mineral extraction to battery pack assembly.
3. Sodium-Ion Batteries:
In 2023, BYD entered the sodium-ion battery market, investing significantly in the development of this technology. Sodium-ion batteries are seen as a cost-effective alternative to lithium-ion batteries, with promising applications in energy storage and EVs.
4. Solid-State Batteries:
BYD is also investing in solid-state battery technology, aiming for mass production around 2027. Solid-state batteries promise higher energy densities and improved safety over traditional lithium-ion batteries. The company intends to introduce solid-state batteries in mid to high-end EVs by 2027, with broader adoption expected by 2030.
BYD sources all these batteries from different parts of the world namely - Brazil, Hungary, Chile, Australia, Indonesia, Thailand etc
1. Lithium:
BYD has secured lithium from multiple regions. In Brazil, the company acquired mining rights for two sites in the country's Lithium Valley, aiming to strengthen its supply chain. Additionally, BYD has made plans to acquire six lithium mines in Africa, ensuring a ten-year supply of this essential material. Within China, the company has invested in local suppliers, including a significant stake in a key lithium producer to stabilize its supply.
2. Cobalt and Nickel:
For cobalt and nickel, BYD primarily relies on domestic suppliers in China. One notable partner is Zhejiang Huayou Cobalt, a major producer of these crucial materials for battery manufacturing.
3. Sodium:
For its sodium-ion batteries, BYD sources sodium from domestic sources within China, aligning with the country’s growing focus on utilizing sodium for energy storage solutions.
China's Belt and Road Initiative (BRI) helps secure raw materials from Africa by trading infrastructure projects for valuable minerals like lithium, cobalt, and nickel. Many African countries, in need of development, repay loans by supplying these resources. This arrangement benefits companies like BYD by ensuring a steady supply of materials for EV batteries. However, it also creates a reliance on mineral exports, which raises concerns about long-term debt and the economic stability of these African nations.
BYD takes battery safety seriously, integrating several key features to ensure reliability. Their Blade Battery design stands out for its ability to minimize the risk of thermal runaway and provide stability, even under high-impact situations. The advanced thermal management system helps keep the battery at an optimal temperature, preventing overheating during use.
The Battery Management System (BMS) keeps a constant watch on factors like temperature, voltage, and charge level, alerting to any potential issues like overcharging or deep discharging. Additionally, BYD’s batteries are built to withstand extreme conditions, including impacts and even fire, without the risk of combustion or explosion.
Penetration testing is another critical part of BYD’s safety approach. The company rigorously tests the battery's resilience against physical damage, including punctures, to ensure that it won’t fail or catch fire if it’s accidentally compromised. This thorough approach is part of BYD's commitment to building EV batteries that are as safe as they are innovative.
The Future?
BYD and Tesla are both eyeing India’s growing electric vehicle (EV) market, each with ambitious plans. BYD aims to capture a significant share by offering affordable, high-quality EVs tailored for Indian consumers. With its advanced battery technology and cost-effective vehicles, BYD is positioning itself as a strong competitor, especially in a price-sensitive market. Tesla, known for its premium EVs, faces tougher competition in India as BYD’s value-driven approach could appeal to a broader audience. Both companies are planning local manufacturing, but BYD’s focus on affordability and local expertise may challenge Tesla’s dominance in the region. The competition between these two giants will shape the future of India’s EV industry in the coming years