China’s leading electric-vehicle maker BYD has recently pledged to collaborate with its rival Tesla to combat the prevalence of petrol cars, emphasizing the need for unity against this common adversary. Stella Li, BYD’s executive vice-president, made the declaration during an interview with the Financial Times, asserting, "Our common enemy is the internal combustion engine car. We need to work together... to make the industry change." This cooperative spirit, she insists, is pivotal for the future of the automotive industry.
On the financial front, BYD has just launched Hong Kong’s biggest stock market listing in four years, raising $5.6 billion (€5.3 billion) to support its overseas expansion efforts. The listing highlights BYD’s ambition to bolster its market presence internationally as it moves to establish local production facilities across various countries, including Turkey, Hungary, and Brazil. During this share sale, BYD sold 129.8 million shares at HK$335.20 (€40.9) each, representing an 8% discount on the closing price from the previous day. These funds are pivotal as BYD aims to increase its foothold beyond the Chinese market.
Despite being fierce competitors, Li highlighted BYD's readiness to share technologies with retailers like Tesla. Specific areas of collaboration include autonomous driving software and various electric vehicle technologies, demonstrating BYD's commitment to innovative solutions, even amid growing geopolitical tensions between China and the U.S.
While BYD is making strides within the European market, Tesla has been struggling with lagging sales across the continent. Analysts speculate this downturn is partially attributed to CEO Elon Musk's increasing involvement in political matters, including his public support for far-right parties such as Germany's Alternative for Germany and his connections with U.S. President Donald Trump.
The backdrop of this competitive narrative is colored by the EU's recent imposition of tariffs on Chinese electric vehicles. The EU accused the Chinese government of unfairly subsidizing domestic electric vehicle companies, which has resulted in BYD facing additional tariffs of 17%, on top of the existing 10% levy. Notably, fellow automaker Geely is encountering its own hurdles, grappling with levies amounting to 18.8%, whereas state-owned SAIC Group is facing the most significant tariff at 35.3%. These tariffs not only increase prices but also raise concerns about the impact on Chinese EV sales within the EU, potentially complicate the market dynamics for companies like BYD.
The new tariff environment has prompted several Chinese electric vehicle manufacturers to pivot, focusing on hybrid vehicles, which are currently exempt from these tariffs. This strategic shift aims to retain their market share against the backdrop of growing competition and regulatory barriers within Europe.
Interestingly, BYD’s Blade battery technology, which employs lithium iron phosphate (LFP) formulations, has been gaining traction due to its efficiency and improved energy density, aiding its appeal among consumers. The Blade battery facilitates longer range for electric vehicles, which is increasingly significant as customers become more discerning about overall vehicle performance.
While BYD has set ambitious goals by fostering cooperation with rivals like Tesla, the path forward is laden with challenges posed by both competitive and regulatory landscapes. With the right balance of collaboration and innovation, BYD not only aims to solidify its position within the market but also contribute to the overarching fight against petrol-powered vehicles—a mission it believes will require unity across the industry.