The rise of BYD, the Chinese automaker that outsells Tesla

Wang Chuanfu and a cousin founded BYD in 1995. Then a 29-year-old government researcher, Wang came from a family of rice farmers. He earned a university scholarship and eventually moved to the Special Economic Zone in Shenzhen to start his new company.

The "YD" in the name came from Yadi, the village in Shenzhen where the company originally was, one South Korean newspaper reported. The "B" was added later as a promotional tool, the report said. Wang has said in interviews that, taken together, the BYD name doesn't stand for anything in particular.

It was only later that Wang derived the slogan "Build Your Dreams." The company has also acquired another nickname: "Bring Your Dollars."

The company's original business wasn't cars. It was cellphone batteries. BYD challenged the established Japanese suppliers Toyota and Sony by providing a cheaper alternative. By 2002, companies such as Motorola, Nokia, Sony Ericsson, and Samsung were all using BYD batteries.

BYD moved into the car business after buying Xi'an Tsinchuan, a failing state-owned automaker that was then an arm of the defense contractor Norinco, the South China Morning Post reported.

The company launched its first car in 2005. The BYD F3 was a compact sedan that resembled the Toyota Corolla. It sold for as little as 40,000 yuan, or about $5,850.

The billionaire investor Warren Buffett was one of the high-profile names who took an interest in BYD early on. Looking to invest in China's booming car market, Buffett toured BYD's headquarters.

The Wall Street Journal reported that while the Berkshire Hathaway tycoon was there, Wang took a sip of battery fluid to prove how clean his batteries were. Buffett was so impressed by the experience that he offered to buy 25% of the company.

Wang declined that offer, but Buffett was not deterred. Berkshire Hathaway acquired a 10% stake in BYD — for $232 million — in 2008.

The company debuted its first fully electric vehicle, the E6, in 2010. Benefiting from Chinese government subsidies, it was able to compete with its Japanese counterparts.

But not everyone was impressed. Tesla CEO Elon Musk laughed in a 2011 interview when asked whether he considered BYD a serious rival to Tesla.

"Have you seen their car?" he said. "I don't think they make a good product. I don't think it's particularly attractive. The technology is not very strong."

BYD established itself as one of the top automakers for hybrid vehicles in China in the 2010s. Its most popular offering was the Qin, introduced in 2012, which became one of the best-selling cars in China.

That wasn't the only offering that propelled BYD to prominence, however. The company also released the Tang, a hybrid SUV, and partnered with Daimler AG (now Mercedes-Benz) to make its Denza line.

Even though most of its sales in the fourth quarter of 2023 came from the Chinese market, BYD made headlines across the globe when it seemingly did the impossible — it unseated Tesla as the world's top seller of electric cars.

The Chinese automaker rode the EV wave on the back of its new Seagull, which debuted for 73,000 yuan, or about $10,000, as well as its Song, Qin Plus, Dolphin, Yuan Plus, and Han EVs.

Tesla reclaimed the crown in the first quarter of 2024, though both companies saw steep declines in their sales.

The Shark, unveiled in May, is the latest model offered by BYD.

It's a midsize hybrid pickup truck, and the cabin's design fuses outdoor functionality with modern style and durability.

The truck has more than 430 horsepower, or 170 less than Tesla's all-wheel-drive Cybertruc. BYD says it can accelerate from zero to 100 kilometers an hour, or about 62 miles an hour, in roughly 5.7 seconds. The vehicle has five seats and a maximum towing capacity of 2,500 kilograms, which is just more than 5,500 pounds. That's about half of the Cybertruck's towing capability.

Designed for everyday trips and off-road driving, the Shark has three terrain modes: sand, mud, and snow.

It also has built-in features to make camping and off-roading more accessible. The vehicle offers bidirectional charging, according to BYD's site.

While the Shark isn't in direct competition with the Cybertruck as a hybrid model that doesn't sell in the US, it may entice EV fans looking for a more traditional pickup design. It's also priced competitively at about $53,451, which is lower than Cybertruck's $60,990 starting price tag.

For a time, it looked as if we were just a few years away from getting Chinese electric cars in the United States. A BYD executive said as much in 2017, and the company even hired Leonardo DiCaprio as a brand ambassador for English-speaking customers.

Since then, BYD has expanded overseas. The Chinese automaker is planning a factory in Mexico — alarming US officials — and even created its own shipping fleet in a bid to cut down on export costs.

But the company says it has abandoned its plans of selling its EVs to Americans. Analysts have pointed to geopolitical tensions and trade barriers between the two countries, as well as the slumping demand for EVs in the United States.

BYD is upgrading its hybrid powertrain system.

The company announced that the upgraded powertrains will launch in two of sedans, one of which will be the BYD Seal 06, Bloomberg reported. Both models will reportedly be under 100,000 yuan, according to the company.

Hybrids make up the majority of BYD vehicles sold, according to a Reuters report. The new upgrade gives them a competitive edge against rivals like Toyota and Volkswagon, which mostly sell fuel-powered vehicles.

The powertrain system translates to about 81 miles per gallon at full charge, which is over triple the US fuel economy average for 2022 cars. That's also close to 500 more miles of range than a hybrid 2023 Lexus ES, which was the longest-range hybrid in the Kelley Blue Book's list last year.

Additional reporting by Graham Rapier.

BYD sold 1.76 million EVS in 2024, according to figures released Wednesday.

That total was part of a larger haul of 4.27 million cars sold overall, which includes both hybrid and EV models.

In an effort to boost sales in the holiday quarter, Tesla boosted discounts towards the end of the year. However, Tesla sold about 1.79 million cars in 2024, marking its first year-over-year decline.

BYD similarly launched a series of discounts toward the end of the year and has grown in popularity with its hybrid models in the last few months. BYD's 2024 sales include a monthly record of over 500,000 EVs and hybrids sold just in December, the company said.

BYD released its 2024 annual revenues on Monday, reporting 777 billion yuan, or about $107 billion. It's an important moment for the EV giant, which just crossed the $100 billion barrier. It also beat Tesla's revenue from the same year, which was $97.7 billion, although BYD's revenue includes both hybrids and EVs.

BYD's net profit hit 40 billion yuan, or $5.55 billion, which beats analyst expectations and represents a 34% year-over-year increase. Tesla was still ahead of BYD in terms of profit though, with $7.1 billion in profit last year.

BYD's success comes just a week after the Chinese carmaker revealed its "super E-platform," which includes chargers that can add nearly 250 miles of range to an EV in five minutes. BYD chairman and founder Wang Chuanfu said the EV giant wanted to "solve users' charging anxiety" with the platform.

The new chargers are four times as powerful as Tesla's, which says it can add 200 miles of range in 15 minutes. Tesla plans to roll out new chargers this year, but they would still only be half as powerful as BYD's "super E-platform."