BYD Is Likely to Build Its Own Factory in Europe Than Taking One Over

According to Bloomberg News, BYD Co. is considering establishing its own factory in Europe, implying that the Chinese automaker is more likely to establish its own plant than take over one from Ford Motor Co. in Germany. "We aren’t focusing on certain companies’ facilities,” BYD Executive Vice President Stella Li said in an interview from the company’s new North American headquarters in Pasadena, California. She said the carmaker is more interested in building its own plants rather than acquiring other companies’ factories.

"We’re doing feasibility studies to see our plans for the future,” Li said. "Like if we set up our facility in that region, what’s the best solution out there?” While there are "no target countries to build facilities yet,” BYD wants to have solid sales and dealer networks in Europe, along with service centers, in order to ensure consumer confidence in the brand, she said.

According to people familiar with the situation, Ford has been in talks with around 15 potential investors for its plant in Saarlouis, Germany, including BYD. The preliminary discussions were first reported by the Wall Street Journal last month.
BYD is looking beyond China after experiencing tremendous success in the domestic market selling low-cost electric vehicles to the masses. It has already announced plans to sell its vehicles in Germany, Sweden, Norway, the Netherlands, France, and the United Kingdom.

BYD is building its first EV manufacturing plant in Southeast Asia, in Thailand, and is selling to customers in Australia, Japan, and Singapore. It also has a manufacturing plant in India. However, the company, whose largest shareholder is Warren Buffett's Berkshire Hathaway Inc., is facing growing concerns in Europe and the United States about China's increasingly competitive car industry and the country's progress towards becoming an auto-exporting powerhouse.

President Joe Biden signed a new climate and energy law last year that aims to reduce reliance on minerals from China in the EV supply chain and encourage more companies to manufacture electric vehicles in the United States. Rival automakers are also thinking about how to compete on price: Stellantis NV CEO Carlos Tavares stated in December that "to compete with the Chinese, we will need comparable cost structures." BYD, based in Shenzhen, sold 1.86 million pure electric and hybrid vehicles last year, mostly in China, and is focusing its efforts in Asia, Europe, and Latin America in its quest to dominate the clean passenger transport market.

Biden's Inflation Reduction Act isn't "helping the US to be competitive in the EV race or helping US consumers enjoy the best, most innovative technology," Li said, adding that BYD sees China and Europe leading EV adoption and moving to more than 30% EV penetration rates in the near term.
BYD intends to be present in every major market in Latin America, taking an aggressive approach to acquiring dealerships to sell not only passenger cars, but also commercial vans, buses, and taxis, according to Li.

"BYD wants to move the EV adoption rate in Latin America to 10 to 20% in the next three to five years, from less than 2% now,” Li said. "I think this change will start from corporate, government fleets.”

In addition to car manufacturing plants, BYD, which manufactures its own batteries and semiconductors, is "definitely" looking to build a battery facility outside of China, envisioning a truly global supply chain capable of serving its plants anywhere in the world.