Global Courant
The electric car industry used to be “Tesla and everyone else.” In recent years, however, this view has changed in “Tesla, BYD and everyone else,” according to Evercore. Chinese EV manufacturer BYD sold more NEVs, or new energy vehicles, than Tesla by 2022. Evercore noted that BYD’s sales expectations for China in 2023 could potentially exceed total electric vehicle sales in the US and EU combined as of 2022. BYD also offers a diversified product range, including performance sports cars and luxury models. “Simply put, if you are optimistic about electric cars or believe that large-scale electrification is the future, you MUST be familiar with BYD,” analyst Chris McNally wrote in a Monday note. “In many ways, such as battery and utility vehicle platforms, BYD is already a leader in TSLA and others. What the company doesn’t have yet is ‘western brand value.'” On Monday, US-traded shares were up 2%. Warren Buffett and Charlie Munger’s Berkshire Hathaway is a notable investor in BYD. Munger previously praised the company, saying, “The companies that survive are the ones that improve better and faster than the competition. That’s the essence of BYD.” As of May 30, Berkshire owned a 9.9% stake in BYD. However, Omaha’s Oracle has reduced its stake in the company by more than 50% since buying it in 2008. Evercore noted that BYD has experienced “massive growth” over the past five years, with total company revenue tripling from about $20 billion in 2018 to about $63 billion in the past year. “Additionally, BYD has been able to grow profitably, with automotive gross margins in ’22 comparable to TSLA’s leading post-price cut level of ~20%,” McNally said. The analyst said BYD’s success is also “due as much” to the strong supply side of its business. “BYD is arguably the most vertically integrated original equipment manufacturer in the world,” said McNally. The company does everything in-house, from chips and software to the production of buses and passenger cars. The company is also optimistic about BYD’s global expansion prospects. BYD began sales in Europe in 2022 and is already starting to put pressure on the European rental and fleet markets, McNally said. “Outside of China/EU, BYD has, in our view, the most attractive EV offering for emerging markets, where low-cost vehicles represent a significant opportunity,” added McNally. While most OEMs have more expensive EV options that don’t work in developing countries ($40,000+ ASPs), BYD’s sub-$20,000 cars can appeal to these emerging EV markets (for example, while it took China 10 years to achieve up to 1% EV penetration). , it only took Thailand a year to reach a similar level),’ the analyst continued. – CNBC’s Michael Bloom contributed to this report. Correction: Chinese EV maker BYD sold more NEVs in 2022, or new energy vehicles than Tesla In an earlier version, the statistic was mischaracterized.
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Keep an eye on “China’s dormant electric car giant.”
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