BYD Co. in Shenzhen, there’s a wall crammed floor to ceiling with about a thousand framed patents representing more than 30,000 innovations that the electric-vehicle maker’s billionaire founder, Wang Chuanfu, and his team of engineers have devised. These patents, including the groundbreaking low-cost lithium-iron-phosphate battery used by competitors like Ford, Tesla, and Toyota, are the invisible assets driving BYD to become the world’s largest EV maker.
After selling 3 million electric and hybrid vehicles in 2023 and achieving $85 billion in revenue, BYD is on track to surpass Tesla this year. Now, Wang is further revolutionizing China’s EV industry with cars priced below $10,000, fulfilling a goal that Elon Musk once set but has yet to achieve. This focus on affordability is reminiscent of Henry Ford’s mission to make automobiles accessible to the masses.
Wang’s two-decade-long commitment to EV technology has earned him comparisons to Elon Musk, but Wang’s approach is distinctly different. Unlike Musk, whose ventures span space travel and brain implants, Wang has concentrated on refining battery technology and expanding into related industries like battery storage, semiconductors, and solar power, while maintaining low prices in line with BYD’s “Build Your Dreams” motto.
Wang’s journey began in 1995 when he started making cellphone batteries. Over the years, he honed this technology for larger car batteries, attracting investment from Berkshire Hathaway’s Chairman, Warren Buffett. As BYD expanded, Wang emphasized vertical integration to reduce costs and gain a competitive edge. His dedication and strategic vision led Charlie Munger, the late vice chairman of Berkshire Hathaway, to praise Wang as a “fanatical engineer” and a “genius” who saved BYD from financial ruin with his tireless work ethic.
Bill Russo of Shanghai-based consultants Automobility likens Wang to Henry Ford, stating that both entrepreneurs used vertical integration and economies of scale to democratize mobility. This strategy has positioned BYD as a major player in the global EV market.
However, BYD faces challenges in markets outside China. For instance, in Japan, where hybrids dominate and loyalty to domestic brands like Toyota is strong, BYD’s sales have been sluggish. The company’s Seal electric sedan, priced competitively with Tesla’s Model 3, has yet to gain significant traction. In 2023, BYD registered only 2,206 new vehicles in Japan, compared to Nissan’s 34,000 units of its popular Sakura EV.
Building a presence in countries like Japan is crucial as Chinese EV makers encounter increasing barriers in North America and Europe. The US has imposed high tariffs on Chinese EVs, and the EU plans to increase tariffs on Chinese electric cars later this year. Despite these obstacles, BYD remains determined to become a leading EV importer in Japan, planning to roll out new models annually and expand its network of locations across the country.
Wang Chuanfu’s relentless pursuit of innovation and affordability has not only positioned BYD as a leader in the EV industry but also drawn parallels to automotive pioneers like Henry Ford. As BYD continues to navigate international markets, its founder’s vision and dedication will be key to its ongoing success.
For more detailed insights, read the full article on Bloomberg.