Tesla CEO Elon Musk no longer laughs at BYD. The Chinese electric-vehicle maker is handily beating Tesla in China, the world’s largest auto market, and it’s expanding internationally. Now BYD is calling upon other Chinese automakers to go global and “demolish the old legends” of the industry.
One of those legends is Ford Motor, whose executive chairman, Bill Ford Jr., believes that U.S. automakers are “not quite yet ready” to compete against Chinese rivals on electric vehicles, to which the world is turning. As he told Fareed Zakaria in June, “They developed very quickly, and they’ve developed them in large scale, and now they are exporting.”
Musk actually laughed about the quality of BYD’s cars in a 2011 interview that recently resurfaced. But “that was many years ago,” he explained in a tweet. “Their cars are highly competitive these days.”
“The time has come for Chinese brands”
Charlie Munger, Warren Buffett’s right-hand man, led the decision for Berkshire Hathaway to invest in BYD. Earlier this year he said, “I have never helped do anything at Berkshire that was as good as BYD,” adding, “BYD is so much ahead of Tesla in China. It’s almost ridiculous.”
This week, BYD chairman Wang Chuanfu—Munger described him as “a combination of Thomas Edison and Jack Welch”—called upon Chinese rivals to make China a global powerhouse in cars, Reuters reported.
“I believe the time has come for Chinese brands,” he said at a BYD event marking a production milestone, with the logos of 12 Chinese carmakers on an image behind him. “It’s an emotional need for the 1.4 billion Chinese people to see a Chinese brand becoming global.”
BYD also shared a video on the history of China’s auto manufacturers, including EV makers Nio, Xpeng, and Li Auto. “Our stories are different from each other but share the same direction,” states the narrator, ending with a call to “demolish the old legends and achieve new world-class brands.”
“Proud for China’s auto industry”
Nio CEO William Li responded on Weibo, “I feel proud for China’s auto industry! We should learn from BYD’s success.” Others industry figures shared similar sentiments.
But Great Wall Motor’s CTO Wang Yuanli reminded the carmakers that they’re all competing against one another. And a similar reminder came last month, when a Chinese industry group representing 16 automakers retracted a pledge to avoid “abnormal pricing,” just two days after it was made. The group cited China’s antitrust law.
In response to the BYD video—which went viral in China—some rivals warned it could increase regulatory risks for Chinese automakers in Europe and elsewhere. In the U.S., protectionist policies have so far kept Chinese cars from flooding the market, but Europe has been less interventionist, which is why spotting a BYD car is more likely in Germany than in Ohio.
Either way, the shift to electric vehicles favors China’s automakers, given their strength in batteries and clean-energy technology. As Ford said in June of the U.S. market, “They are not here, but they will come here, we think at some point, and we need to be ready.”
“We see the Chinese as the main competitor, not GM or Toyota,” said Ford CEO Jim Farley at a finance event in May, looking ahead to an EV future. “The Chinese are going to be the powerhouse.”