[차이나 모빌리티] BYD Invested by Buffett Creates New Brand for Tesla Job

Input 2021.01.28 14:22 | Revision 2021.01.28 14:33

It is reported that Chinese electric vehicle manufacturer BYD (Viyadi) will create a separate premium electric vehicle brand next year. It is interpreted as a move to contain Tesla, an American electric car maker that is dominating the Chinese market. BYD launched an electric vehicle equipped with a self-developed battery last year to expand its market share, but it is evaluated that it is falling behind Tesla advancing with a’made in China’ model. Recently, BYD secured business funding by raising about 4 trillion won in won by issuing new shares in the Hong Kong stock market.

According to a report by Lee Chai Global on the 27th, BYD executives recently decided to internally create a premium new energy vehicle (NEV) brand and develop a new electric vehicle on EV2.0, a platform dedicated to electric vehicles. Apart from the existing agency sales network, it has decided to establish its own dealer sales channel dedicated to premium brands. BYD is expected to unveil the new brand’s first electric car model in 2023 by operating a development project codenamed Dolphin (Dolphin).

BYD produces both electric and gasoline vehicles. Its main business is electric vehicles. In 2020, annual sales of BYD’s new energy vehicles (pure electric, plug-in hybrid, and fuel cell vehicles are collectively referred to as the term used) totaled 180,700 units. This is a 17.4% decrease from a year ago. However, in December of last year, it sold 28,000 units, which is twice that of December 2019, showing signs of recovery.

In particular, the new sedan electric car Han, which BYD launched in July last year, received many choices in a short period of time. The’Han’ electric vehicle was first equipped with a blade battery developed by BYD. The blade battery is manufactured by making the battery thinner and longer and inserting it into the battery pack like a blade, but BYD explains that it has higher safety than the existing ternary battery. The mileage of the’Han’ model equipped with a blade battery reaches 605km.

According to an announcement by the China Passenger Car Conference (CPCA) on the 12th, BYD’s’Han’ model sold 40,000 units in about six months after its launch, ranking 8th in annual sales of electric cars in China last year. Tesla’s electric sedan’Model 3’ranked first with 137,000 units sold.

In recent years, Chinese electric vehicle companies have been issuing new stocks to prepare for fierce competition in the Chinese market, making a real impact. Following Nio, Xiaofeng Motors, and Rioto, BYD also joined this trend. BYD announced on the 21st that it has raised HK$29.9 billion (approximately 4.3 trillion won) by issuing 135 million new shares (5% of current retail stocks) at HK$225 per share in the Hong Kong stock market. It is reported that more than 200 institutional investors have participated in the investment. In the automotive industry, BYD is expected to invest this money for electric vehicle research and development (R&D).

China, the world’s largest electric vehicle market, has become a battlefield for automobile companies around the world. The Chinese government has announced a goal to increase the proportion of electric vehicles to 25% of all vehicles by 2025. Considering that this proportion was 5.4% last year, there are observations that Chinese electric vehicle sales will increase explosively over the next five years.

BYD is evaluated as having a relatively high competitiveness among Chinese electric vehicle companies by making its own cars, batteries and semiconductors. Last year, BYD’s stock price rose more than four times over a year. BYD’s market cap exceeded $100 billion, ranking fourth in the global automakers’ market cap. As of the 27th, Tesla ($819.1 billion) was ranked first, Toyota of Japan ($11974 billion) and Volkswagen ($102.7 billion) were ranked second. Berkshire Hathaway, a company of Warren Buffett, the top US investor, is estimated to have generated more than 30 times the return on investment (based on equity valuation) since investing in BYD in 2008.