On January 12, Sanjay Gopalakrishnan, Senior Vice President of BYD India, said in an interview that BYD aims to capture 40% of India's electric vehicle market by 2030. Following the announcement, BYD's stock rose 3.09% on the same day, with intraday gains of over 5%, and its Hong Kong-listed shares surged over 9% to a four-month high.

Capital market reactions often reflect confidence in a company. BYD now stands at an unprecedented height in terms of sales, supply chain completeness, and battery-electric technology, making it a leader among Chinese new energy vehicle (NEV) makers.

BYD's overseas track record is the most successful among domestic Chinese brands, and its expansion model is one of the few that has been proven effective. This article reviews how BYD built its global expansion path.

Chapter 1: BYD's Global Expansion Journey

In 2003, the same year Tesla was founded, Wang Chuanfu overruled opposition to acquire Qinchuan Auto, entering the automotive industry and starting early R&D on NEVs. After nearly a decade of domestic growth, BYD began exporting vehicles overseas.

In 2012, BYD secured its first electric bus order from the Netherlands. From there, orders poured in from the UK, US, Japan, Germany, and other traditional automotive powerhouses. From 2014 to 2017, BYD ranked first globally in pure electric bus sales for four consecutive years.

Beyond buses, BYD's commercial vehicle exports include airport shuttles, urban logistics trucks, and more. Countries such as Sweden, Mexico, and the Netherlands have purchased BYD electric trucks. The company has also partnered with local governments in El Salvador and Brazil to build monorail systems. To date, BYD has delivered over 85,000 pure electric commercial vehicles globally, including over 70,000 electric buses.

After years of success in commercial vehicles, BYD began pushing into passenger vehicles in the last two years, especially in 2022. In July, BYD held a brand launch in Tokyo, announcing entry into the Japanese passenger car market with three models: ATTO 3 (the overseas version of Yuan PLUS), Dolphin, and Seal. On August 1, BYD announced a partnership with Hedin Mobility, one of Europe's largest dealers, to enter Sweden and Germany. On August 8, BYD launched in Thailand at a Bangkok event. On September 28, BYD held an online European launch for passenger NEVs, introducing Han, Tang, and Yuan PLUS. On October 17, BYD displayed these three models at the Paris Motor Show.

Starting from July 2022, BYD began separately reporting overseas passenger car sales. Monthly figures from July to December were: 4,026; 5,092; 7,736; 9,529; 12,318; and 11,320 units, totaling over 55,916 exported in 2022. Notably, the ATTO 3 became Israel's best-selling single model in November with 2,333 units sold.

Although overseas sales still represent a small share of BYD's total, they already lead among domestic Chinese brands.

Chapter 2: From Commercial to Passenger Vehicles

BYD's overseas strategy is clearly 'B2B first, then B2C'—first targeting public transportation (commercial vehicles), then private consumer cars. This approach is logical: the passenger car market demands strong brand, technology, and comprehensive capabilities, with fierce competition. Many foreign luxury brands have decades or centuries of heritage that cannot be matched solely by product quality.

Commercial vehicles, however, emphasize durability, making them a more accessible entry point. BYD used cost-effective advantages to capture the commercial vehicle market, gradually increasing brand acceptance through a 'rural-encirclement-of-the-cities' approach. Long-term commercial vehicle exports also honed BYD's team and sales system, laying the groundwork for rapid passenger car expansion.

However, this 'B2B-first' strategy has drawbacks. Commercial vehicles can promote the brand but may also brand it as low-end, creating obstacles for future upmarket moves. A similar challenge faced GAC Aion in China, which initially relied heavily on ride-hailing sales, associating its brand with ride-hailing. BYD now faces the same issue, which is why it created the higher-end 'Yangwang' brand.

Overseas, BYD often uses an 'asset-light model,' partnering with local dealers. While convenient and cost-effective, this requires profit sharing and can hinder brand building. In commercial vehicles, cost advantage works well, but for passenger cars, long-term brand building and sales network development are critical—areas where Chinese brands still lag behind foreign ones.

Chapter 3: The Past is Prologue

BYD's overseas expansion is not only gradual but also strategically tactical. For instance, while pushing passenger cars, BYD hasn't neglected its B2B base. In October 2022, it won a large order from Germany's largest rental company SIXT, supplying 100,000 EVs over six years—over 40% of SIXT's current fleet. BYD also pursues multiple areas beyond product export. In September 2022, it signed land purchase and factory agreements in Thailand, with operations expected to start in 2024. A wholly-owned factory in India is also on the agenda. BYD has partnered with energy giants like Shell to deploy overseas charging services.

Overall, BYD's overseas approach appears more methodical and organized than many competitors—a result of years of technology accumulation and a comprehensive supply chain. However, we must note that BYD's main advantages lie in hardware (battery, motor, electronic control). As the saying goes, 'NEVs: electrification is the first half, intelligence is the second half.' BYD lags in areas like intelligent driving and smart cockpits, a long-standing criticism. Addressing this is a major challenge ahead.

In conclusion, BYD's passenger car overseas journey is just beginning. Whether it can replicate its commercial vehicle success remains to be seen. But at this stage, BYD represents the ceiling of Chinese domestic auto brands.

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