In the EV race, China's BYD is leading the pack

Japan Times

31-03-2025

China is setting the pace for the automobile industry.
A country that only a short while ago relied on foreign technology and knowhow in this sector is now the global leader in electric vehicles. This success is part of a broader effort to become the global champion of green technology, a campaign that has enjoyed considerable success.
Leading this remarkable development is Build Your Dreams, the Shenzhen-based carmaker better known as BYD. Last year, the company overtook Tesla to become the world's leading EV manufacturer. Its success reflects a new approach to thinking about automobiles, one that focuses not on the car itself but on the transportation experience. BYD is not the only carmaker with this mindset but that strategy along with its technological knowhow — and generous support from the Chinese government — has propelled it into first place.
BYD's stellar year began with news that sales last year exceeded $100 billion as the company surpassed Tesla. Its combined sales of battery- and plug-in EVs topped 3.84 million units, 22.2% of global EV sales and a 33.6% increase over the previous year.
When all hybrid units are included in sales figures, BYD's deliveries reached 4.27 million vehicles, nearly the same as Ford. It now controls about 15% of the entire passenger car market. Significantly for market analysts, the company outperformed expectations on both total and net revenue — and BYD executives insist that they can increase production for this year.
BYD's strong performance reflects its dominance in China's domestic auto market, the world's largest and most competitive for electric vehicles. In February, the company announced that it would include its God's Eye advanced driver-assistance system on all its models for free. Its radar, lidar, sensors and processors will be connected to an artificial intelligence in the car and another in the cloud that permit automated driving. (The company is careful to claim that it's not a fully automated system, however.)
Then earlier this month, BYD announced that it had developed a new technology that would charge its cars quickly in just 5 minutes, about the same time that it takes to fill the tank of an internal combustion vehicle, to travel 400 kilometers. Some 10 days later, the company announced that the first 500 new fast chargers — officially, 1 megawatt flash chargers — could be available for use next week, with a rollout of about 4,000 across the nation to follow.
Wang Chuanfu, BYD founder and chairman, understands the need for auto manufacturers to be on the technology frontier and has pledged that his company will remain there. BYD will continue to boost research and development and hone the competitiveness of its products. Central to that effort are batteries. The company started as a battery maker and has been refining its battery and power storage technology ever since.
Foreign competitors claim that BYD's success is the product of Chinese government support in the form of subsidies and barriers to the operation of foreign companies. Chinese makers insist instead that their success reflects hard work, cheap labor, control of the supply chain and ruthless competition for the domestic market.
Foreign governments are demanding a level playing field and until they are satisfied, many are imposing tariffs on Chinese EVs. The administration of former U.S. President Joe Biden imposed 100% tariffs on Chinese EV imports and then argued that their connectivity makes them security risks, effectively banning them from the country. Donald Trump is no fan of renewable energy and his determination to stimulate domestic automobile production — even if by foreign companies — this week yielded 25% tariffs on all imported autos.
Europe too is concerned. Chinese models constituted 8% of EV sales in the EU in 2023, up from less than 1% in 2019. The EU last year set tariffs of up to 35% on Chinese EVs. Yet even with the additional costs, Chinese automakers can make money and sales on the continent.
BYD is present too in Japan, having released four models, all EVs, since it first entered the market in January 2023. The company sold 2,223 such vehicles in Japan in 2024, a 54% increase over the previous year. If those numbers look anemic, it's because Japan's electric vehicle market is one of the least developed in the world. The EV share of sales fell below 2% last year.
Nevertheless, BYD is over halfway to its goal of 100 sales locations by the end of this year. The Chinese company has also signed agreements with local governments to use its EVs' Vehicle-to-Home, or V2H, technology to power facilities and critical infrastructure in the case of an emergency or natural disaster.
Japan's reluctance to embrace EVs defies global trends. In China, EV sales are projected to reach 50% of total sales this year, a decade ahead of the target set in 2020. The International Energy Agency anticipates that global electric light-duty vehicle sales will reach 40% of the total in 2030 and almost 55% in 2035.
If Japan continues to lag, its manufacturers won't be competitive in the global market, yet another example of the Galapagos syndrome. It's already happening: Japanese vehicles account for just 11.4% of passenger car sales in China, down from 50% just five years ago.
In many ways, Japan is well suited for EVs. The population is concentrated, the country relatively small in size. Moreover, researchers have found that there is a positive correlation between high-speed rail use and EV adoption. The availability of the rail option for long-range travel reduces 'distance anxiety,' or the fear of running out of charge in an electric car.
Japan's manufacturing expertise should make it a natural partner for companies looking to collaborate in this sector. Japanese automakers should be eager to reach out as Chinese manufacturers begin to eat into their market share in Southeast Asia.
Business strategies are changing as the Trump administration's imposition of a 25% tariff on all auto imports transforms auto industry economics. One thing will remain consistent, however. There is far more at stake than bragging rights for the world's top automaker.
The country that masters EV technologies will become the global leader of a suite of critical new technologies. Leadership in electric vehicles will require surmounting storage and charging limits and the integration of myriad sensors and radars within the unit and within the larger network that the vehicle operates.
That nation will also be seen as leading the green transition. It is difficult if not impossible to grasp the significance of this accomplishment but as the scale of the climate challenge grows and the urgency of the problem intensifies, this country will assume an entirely new role and influence in the world. It looks like China may be that nation.
The Japan Times Editorial Board