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BYD – a look at China’s key EV and battery player

21 Apr 2021 (Last Updated May 12th, 2021 16:52)

As the automotive industry rapidly pivots from combustion to electric vehicles, many OEMs are racing to set up lithium-ion battery supply deals. BYD is one of the fastest growing providers of batteries to the industry. In addition, BYD has its own extensive vehicle production network under the BYD Auto brand. Here's our primer on BYD, what it is, where it came from and where it’s going.

BYD – a look at China’s key EV and battery player

As the automotive industry rapidly pivots from combustion to electric vehicles, many OEMs are racing to set up lithium-ion battery supply deals. At the same time, OEMs are increasingly concerned about vesting such a large proportion of the value of their EVs outside of the company. As their role in modern technology becomes more critical, batteries have become a new battleground, with those in possession of the best technology or the most lucrative supply deals likely to become dominant in the future. To capture as much value as possible within their own walls, several OEMs now looking to more vertical integration for battery supply. This will be driven by their concern over large third-party developers such as BYD – one of the fastest growing providers of batteries to the industry. In addition, BYD has its own extensive vehicle production network under the BYD Auto brand.

Here’s our primer on BYD, what it is, where it came from and where it’s going:

This article first appeared on GlobalData’s Automotive Intelligence Center 

IN PROFILE: BYD

BYD
Name BYD Co., Limited. (Build Your Dreams)
Founded1995 (BYD Auto: 2003)
HistorySet up as a rechargeable battery manufacturer in 1995; Listed on Hong Kong stock exchange in 2002; Growth came from strong sales of batteries for mobile phone handsets; BYD created BYD Auto after purchasing Qinchuan Machinery Works in 2002 – Qinchuan had been manufacturing cars since 1987
Key peopleWang Chuanfu (founder, CEO)
ProductsLithium-ion battery cells for passenger vehicles, commercial vehicles, and energy storage systems. In addition, the company manufactures lithium-ion batteries for consumer electronics such as smartphones, and other electronic components. BYD Auto, the company’s automotive manufacturing subsidiary, builds a range of battery-electric, hybrid-electric and combustion-powered passenger cars, commercial vehicles, trucks, and buses.
RevenueQ1-Q3 2020 – CNY 4.79bn (down 43.7% compared with Q1-Q3 2019)
Operating profitQ1-Q3 2020 – CNY 221.89m (down 17.8% compared with Q1-Q3 2019)
Competitive positionNumber 5 for global market share of EV battery manufacturing. Second-largest lithium-ion battery supplier in China. (H1 2020 – source: Global X ETFs) 1. LG Energy Solution (26.5%) 2. CATL (25.8%) 3. Panasonic (20.6%) 4. Samsung SDI (6.8%) 5. BYD (6.2%)
Battery technologyBlade battery: Announced in March 2020; New battery pack concept focused on increased range and safety; Remarkably good performance in the ‘nail test’ where a nail is driven through the battery cell – in typical Li-ion cells, this could start a fire but the BYD blade battery is resistant to this; In addition, it’s highly resistant to extremes of heat and overcharging; Removes modules from the pack and mounts cells directly into the pack structure, reducing wasted weight and improving efficiency; Expected to get its production introduction in the 2021 BYD Tang SUV; Claimed to have a useful range of 1.2m kilometres, or roughly 3,000 charge-discharge cycles; Bestows the Tang SUV with a claimed range of 314 miles (NEDC); Pack can be charged from 30% to 80% in 30 minutes
Lithium Iron Phosphate (LiFePO4); Lithium iron phosphate cells swap out typical Li-ion cathode materials such as lithium cobalt oxide for lithium iron phosphate; Lithium iron phosphate cells have a lower overall energy density so are less common in passenger vehicles where long range and low weight is prized; They are, however, much safer than lithium-ion cells with more stable performance across a wide range of operating temperatures and a lower risk of spontaneous combustion; Lithium iron phosphate is also less resource intensive than Li-ion, especially thanks to its removal of cobalt which is an expensive element that comes with added concerns of human-rights abuses in places where it is mined; Technology is well suited to low-range, high-longevity applications such as forklift trucks and other low-speed vehicles; BYD’s facility in Manaus, Brazil began LiFePO4 operations in September 2020 with a capacity for 18,000 modules per year intended for buses and other mobility equipment
Rival CATL is manufacturing lithium iron phosphate cells for Tesla in China to be used in entry-level versions of the Model 3 sedan built in Shanghai
Production basesBatteries: Shenzhen – capacity 14GWh per year; Huizhou – capacity 2GWh per year; Qinghai, China – capacity 24GWh; Manaus, Brazil – capacity 18,000 modules per year; Xi'an, China – planned capacity 20GWh per year; Chongqing, China – planned capacity 20GWh per year; Bengbu, China – planned capacity 20GWh per year
Vehicles: Beijing, China; Xi'an, China; Changsha, China; Shaoguan, China; Lancaster, California, USA; Allonne, France; Komarom, Hungary; Yorkshire and Central Scotland, UK (ADL BYD)
Electronics: Tamilnadu, India
Production capacityBYD’s current production capacity is estimated to be around 60GWh per year. It had previously stated an intention to increase this figure to around 100GWh for 2020, however, battery demand saw a significant short-term drop throughout 2020 as a result of the coronavirus pandemic. Assuming a 60GWh annual capacity – BYD currently produces enough for roughly one million midsized electric vehicles assuming they use a 60kWh battery pack. BYD’s range includes both large electric vehicles in the form of buses and trucks, along with small vehicles such as battery-powered city cars. Considering the respective battery pack sizes of BYD’s vehicles varies considerably, it is difficult to calculate an average per-vehicle kWh figure and, as a result, to know how many vehicles BYD’s annual battery production capacity translates to. In 2020, BYD sold nearly 427,000 vehicles, a 7.5% drop on 2019’s figure. In February 2019, BYD confirmed that it had broken ground on a new facility in Chongqing Municipality, China for battery production. The new facility represents an investment of around CNY 10bn and is expected to have an annual capacity of 20GWh. Later, in December 2020, BYD announced it would open yet another facility – this time in Bengbu, Anhui province, China. Total investment for this facility is expected to be around CNY 6bn and it is also intended to have an annual capacity of 20GWh. The latest two announcements will take BYD to its previously stated goal of 100GWh of capacity.
Joint venture activityHino-BYD joint venture: Established October 2020; The two will set up a joint company for commercial EV development; Will begin operations in China sometime in 2021; BYD and Hino will both make a 50% investment; Will work to identify the best spread of commercial EVs to sell to customers
Toyota-BYD joint venture: Agreement between the two was first reached in November 2019; Called BYD Toyota EV Technology; Focused on research and development of battery electric vehicles; Operations began May 2020; Headquartered in Pingshan District, Guangdong Province; Employs around 300 people with chairman from Toyota and CEO from BYD; 50-50 holding between Toyota and BYD; Initially focused on developing EVs for the Chinese market
Chang’an-BYD joint venture: Announced July 2018; Will establish a new venture to build batteries and new energy vehicles; Chang’an is one of the ‘big four’ Chinese state-owned OEMs; The battery joint venture will include a new battery production facility in Chongqing, China with an initial annual capacity of 5-6GWh; Will be increased to a total of 10GWh over its lifetime; Partnership includes commitment to also develop autonomous driving, and EV technology including battery recycling and fast charging; Both firms will also commit to improving supply chain management and car assembly techniques
Faurecia-BYD joint venture: Joint venture announced in October 2017; Called Shenzhen Faurecia Automotive Parts Co., Ltd; Faurecia holds 70%, BYD holds 30%; Develops and manufactures seating systems for BYD-branded vehicles and affiliated vehicles; Sales were expected to be around CNY 2.4bn by the end of 2020 (pre-COVID)
Daimler-BYD joint venture: One of the first established JVs between a premium western manufacturer and a Chinese company, established 2010; Initial investment was CNY 600m with BYD and Daimler both holding 50%; Created a new auto brand called Denza; Concept vehicle shown 2013, before launching first production model in 2014; The Denza 500 used the chassis from a Mercedes B-Class with EV powertrain and battery components supplied by BYD; Second model launched in 2019 called the Denza X, using a platform from the BYD Tang electric SUV; Poor sales have limited Denza’s reach in China – the 500 only sold around 14,000 units in its production run, while the X has struggled to top 4,000 units per year since its introduction
Alexander Dennis Limited (ADL)-BYD joint venture: Partnership between BYD and the UK’s ADL bus manufacturer; Established in 2015 and has since received more than 500 orders; Initially, BYD would manufacture the EV bus chassis and then send it to the UK to have its body fitted by ADL; In 2021, the JV confirmed that full chassis assembly would now take place in the UK for both single and double-decker buses; UK assembly expected to commence in the second half of 2021
Other aggreementsBerkshire Hathaway investment: In 2008, US investment company Berkshire Hathaway fronted by Warren Buffett made a $230m investment in BYD in return for a 10% stake in the company; The investment recognised the strength of BYD in electric vehicles and would be the first step in exporting them from China to other markets potentially including North America; By 2021, that share had been diluted to 8.2% but represented a larger holding to Berkshire Hathaway than its stake in US auto giant General Motors; This proved to be a shrewd investment with BYD’s share price growing 300% over the course of 2020, with BH’s investment growing more than 3000% since it was purchased

Source:GlobalData