Tesla CEO Elon Musk no longer mocks BYD. The Chinese electric carmaker handily beats Tesla in China, the world’s largest auto market, and is expanding internationally. Now, BYD is calling on other Chinese automakers to go global and “destroy the old legends of the industry”.
One of those legends is Ford Motor Company, whose executive chairman Bill Ford Jr. believes the U.S. automaker is “not ready” to compete with Chinese rivals in electric vehicles, the world is shifting to. As he told Fareed Zakaria in June, “They’ve grown very fast, and they’ve developed it on a massive scale, and now they’re exporting.”
In fact, Musk mocked the quality of BYD’s cars in a recently resurfaced 2011 interview. But “that was many years ago,” he explained in a tweet. “Their cars are extremely competitive these days.”
“The era of Chinese brands has come”
Warren Buffett’s right-hand man, Charlie Munger, led Berkshire Hathaway’s decision to invest in BYD. Earlier this year, he said, “I’ve never done anything as good as BYD at Berkshire,” adding, “BYD is so far ahead of Tesla in China. It’s almost absurd.”
This week, BYD Chairman Wang Chuanfu-Munger describe Reuters dubs him ‘Thomas Edison and Jack Welch’ – calling on Chinese rivals to make China a global auto powerhouse report.
“I believe the time for Chinese brands has come,” he said at a BYD event marking a production milestone, behind him in a photo bearing the logos of 12 Chinese automakers. “Seeing Chinese brands go global is the emotional need of the 1.4 billion Chinese people.”
BYD also shared a video about the history of Chinese automakers, including electric carmakers NIO, Xpeng Motors and Li Auto. “Our stories are different, but the direction is the same.” The narrator said, and finally called for “overthrowing the old legend and creating a new world-class brand.”
“Proud of China’s auto industry”
Li Bin, CEO of Weilai Automobile, responded on Weibo: “I am proud of China’s auto industry! We should learn from BYD’s successful experience.” People in other industries have similar views.
But Wang Yuanli, chief technology officer of Great Wall Motors, reminded automakers that they are all competing with each other. A similar reminder emerged last month, when a Chinese industry group representing 16 automakers backed away from a pledge to avoid “abnormal pricing” just two days after it was made. The group cited China’s anti-monopoly law.
Some rivals have warned that the BYD video that went viral in China could raise regulatory risks for the Chinese automaker in Europe and elsewhere.In the US, protectionist policies have so far prevented a flood of Chinese cars from flooding the market, but Europe has less interventionwhich is why BYD cars are more likely to be found in Germany than in Ohio.
Either way, the move to EVs is in China’s interest for automakers, given their prowess in batteries and clean energy technology. As Ford said of the U.S. market in June, “They’re not here, but they’re going to be here, and we think at some point, we need to be ready.”
“We see China as our primary competitor, not GM or Toyota,” Ford Chief Executive Jim Farley said as he looked ahead to the future of electric vehicles at a financial event in May. “The Chinese will become a powerful country.”
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