In 2022, BYD surged into overseas markets with unprecedented momentum, but 2023 brought a series of setbacks. In March, Japanese media reported that BYD bus parts contained hexavalent chromium, violating industry norms. In April, British media raised security concerns about BYD cars. In June, BYD's Hong Kong stores were vandalized. Toyota led a campaign among Japanese dealers to highlight EV drawbacks. Meanwhile, the EU is considering anti-dumping and anti-subsidy investigations into Chinese EVs.
These events underscore the upheaval Chinese automakers, led by BYD, are causing in the global auto landscape. China became the world's second-largest car exporter in 2022 and overtook Japan in Q1 2023.
BYD's overseas push targets Southeast Asia, the Middle East, South America, Australia, and Europe—markets that closely overlap with Japanese automakers' strongholds. Japanese automakers, backed by powerful trading houses, have built a three-layered empire: an outer ring (Europe, US, South America, etc.), a middle ring (Southeast Asia and India), and an inner fortress (Japan).
China's EV makers are already gaining ground in the outer ring. In Israel, BYD ranks fifth in overall sales. In Australia, Chinese models are more modern than outdated leaders like the Toyota Corolla. In Brazil, BYD plans to build a factory. In Europe, Chinese car exports have surged while Japanese sales have plummeted. Only the US market remains largely off-limits due to protectionist policies.
But BYD faces stiff resistance. Japan's trading houses provide deep local knowledge and supply chain control. Japanese automakers are fighting back with FUD campaigns and dealer loyalty programs. The middle ring—Southeast Asia and India—remains a Japanese stronghold, though BYD's factory in Thailand and interest from Indonesia signal cracks. Japan's home market, where imported cars hold less than 10% share, is the toughest nut to crack.
BYD's progress is real but fragile. The coming years will test whether it can sustain its offensive against one of the world's most entrenched industrial empires.