BYD has not only defeated Tesla, it is making Tesla lose face:
• Selling 4 million electric vehicles in 2024 (twice that of Tesla).
• Tesla, Ford, and Toyota are all scrambling to use its batteries.
• Buffett invested $232 million to acquire 10% of the shares.
How did China quietly turn BYD into the world's largest electric vehicle giant? 🧵
Musk once laughed at BYD, thinking it could never compete with Tesla.
But now, BYD not only forces Tesla to lower prices but also makes Musk consider exiting the Chinese market.
How did BYD make Musk completely change his mind? 👇
In 1995, chemist Wang Chuanfu founded BYD, initially making mobile phone batteries for Nokia.
In 2003, he acquired a state-owned car factory on the brink of bankruptcy with no prior experience in car manufacturing.
Everyone laughed at him until Buffett invested $232 million to acquire 10% of BYD.
But the key to this story actually starts with the Chinese government...
20 years ago, China was rapidly growing into the world's largest oil importer.
With the development of the automotive industry, China's dependence on oil is also deepening.
At that time, the Chinese car market was almost monopolized by foreign brands.
The Chinese government must take action, and quickly...
China is well aware that in the fuel car sector, they can no longer catch up with Japan and Germany.
So, they made a key decision: not to compete in the fuel car market, but to overtake directly in the electric vehicle market.
From 2009 to 2022, the Chinese government invested $29 billion in the electric vehicle industry, fully promoting its development.
It should be noted that batteries typically account for 30%-40% of the total cost of electric vehicles.
Thus, China began acquiring mines globally and establishing refineries to ensure that the supply chain of key battery materials is firmly in their hands.
Today, China dominates the global battery materials processing sector:
• 100% of graphite processing capacity.
• 75% of cobalt processing capacity.
• 60% of lithium processing capacity.
Even if other countries have these mineral resources, they still need to transport raw materials to China for processing.
At the same time, the Chinese government has also introduced a series of policies to help BYD expand rapidly.
In Shenzhen alone, all 16,000 buses have been replaced with BYD's electric vehicles. Sales immediately surged, and revenue followed suit.
Subsequently, BYD launched the 'blade battery'—a lithium iron phosphate battery characterized by:
• Not using expensive nickel and cobalt.
• Charging to 80% in 30 minutes.
• Extremely high safety (will not catch fire even if punctured).
• Production costs are 30%-40% lower than traditional batteries.
In 2020, BYD's blade battery passed the industry's most stringent 'puncture test', while batteries from other brands often exploded in this test.
When testers pierced BYD's blade battery with a nail—nothing happened, no fire, no explosion.
The entire industry was shocked, and even Tesla could not ignore this technology.
By 2022, Tesla began using BYD's batteries in the Model Y produced at its Berlin factory.
But it's not just Tesla—now, BYD's batteries are also used by Toyota, Kia, and Ford.
Even Apple's secret car project chose to collaborate with BYD.
BYD almost controls all the core processes needed to produce electric vehicles:
• Mining lithium in-house.
• Refining minerals in-house.
• Producing chips and semiconductors in-house.
• Manufacturing batteries in-house.
• Producing motors in-house.
This entire complete supply chain allows BYD's car manufacturing costs to be much lower than those of Western car companies, even making them feel scared.
In 2023, BYD launched an electric vehicle named 'Seagull' with a range of 322 kilometers, priced at only $11,500.
This price is only 1/4 of Tesla's cheapest model!
Why can this be achieved? BYD makes only $1,200 profit per vehicle sold, while Tesla's is as high as $9,000.
BYD relies on volume, while Tesla relies on high profit margins.
BYD's annual production capacity has now exceeded 4 million vehicles.
In 2024, BYD surpassed Volkswagen to become the best-selling car brand in China.
Its R&D strength is equally impressive:
• Over 100,000 R&D personnel.
• More than 39,000 patents.
• Annual R&D investment of $5.7 billion (higher than Tesla's $3.9 billion).
Wang Chuanfu is not the only one operating BYD.
He built a top-notch management team responsible for daily operations, while he focused on the company's development strategy for the next 20 years.
This is the true mark of a high-level manager.
Many entrepreneurs often get bogged down by trivial matters and cannot focus on truly important things.
All successful entrepreneurs understand how to delegate power to allow the company to grow faster.