Of 11 leading global automakers, only two reported net profit growth in the July-September quarter of 2024: Tesla and BYD. Nikkei Asia attributed the gap to their early, exclusive focus on electrified vehicles, while other manufacturers struggle to move away from gasoline cars. European and Japanese models have also been squeezed in the Chinese market, which pulled down earnings at those companies.
BYD’s executive vice president, Stella Li, does not treat Tesla as the enemy. “Our common enemy is the internal combustion engine car. We need to work together…to make the industry change,” she told the Financial Times. She did not describe a joint vehicle. Her idea is for major EV makers to push the shift to electrification together.
Li called China’s car market “the homeland for innovation” and said the government stays open to foreign automakers despite rising trade tensions with the European Union and the United States.
Tariffs and new plants
BYD’s growth has met resistance. The EU has put tariffs on Chinese EV makers, BYD among them, and is pressing Chinese firms to transfer intellectual property to European businesses in exchange for subsidies. Beijing, for its part, encourages domestic companies to limit investments in foreign automakers.
The European Commission argues that state-backed advantages explain much of China’s lead in electric vehicles. It lists discounted lithium and battery materials from government-controlled enterprises, tax incentives, low-interest financing and subsidized land for factories.
BYD is building plants in Hungary and Turkey, designed to sidestep the EU tariffs. Li played down the geopolitics. Consumers, she said, end up choosing the best product.
Sources
- Tesla, BYD race past legacy automakers in profits on early EV embrace
- BYD eyes EV dominance, sees cooperation with Tesla as key
