BYD Declares War Against Legacy Auto

BYD President Wang Chuanfu just said that Chinese EV makers should join together to “crush” legacy auto. Good, bad, scary or ??? This is covered in a video by The Electric Viking.

First, I think it is good timing on his part. Legacy auto seems to be floundering in the EV market. The US big three are losing lots of money on their EVs and keep cutting back on their production numbers. Clearly they are not ready for the EV market. Love or hate Tesla, you can see they have the know how to produce compelling EVs at realistic prices. They have been willing to “do things different” to make more compelling vehicles. While they have done this in many ways, using castings to both reduce parts count and improve the structure of their cars in one important example.

VW’s answer has been to buy into the Chinese manufacturing business. Volvo and MG are, today, both Chinese companies. Biden’s Inflation Reduction Act (IRA) has encouraged legacy auto to invest in manufacturing in the US but they are not ready to produce compelling products. They need more time to get new battery plants up and running and to figure out how to make EVs at reasonable costs. Note that while lower wages in China are a consideration, manufacturing efficiency is really a bigger piece of the picture.

The only good news I see for US legacy auto is that BYD has not yet decided to enter the US market. In Europe BYD sales have been dismal but this seems to be because of high prices caused by them using dealer networks — something that gives Tesla an advantage in the European market.

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