BYD Company: Difference between revisions

BYD Company

Logo since 2022
Company type	Public
Traded as	SEHK: 1211 SZSE: 002594
Industry	Conglomerate
Founded	February 1995; 29 years ago (1995-02)
Founder	Wang Chuanfu
Headquarters	Shenzhen, Guangdong , China
Area served	Worldwide
Key people	Wang Chuanfu (Chairman, CEO)
Products	Gasoline and electric cars, battery-powered bicycles, buses, trucks, forklifts, monorail train and buses, photovoltaic modules (solar panels), face masks, rechargeable batteries, energy storage and handset components.
Revenue	RMB 424 billion (2022)[1]
Operating income	121,757,004,000 renminbi (2023)
Net income	RMB 16.6 billion (2022)[1]
Total assets	RMB 295.78 billion (2021)[2]
Total equity	RMB 104.24 billion (2021)[2]
Owner	Wang Chuanfu (17.6%)[2][3] Lu Xiangyang (13.5%)[2][3] Berkshire Hathaway (9.8%)[4][5] Li Lu (8.2%)[6] Western Capital Group (7.7%)[2] Youngy Investment (5.3%)[2] The Vanguard Group (2.1%)[7] BlackRock (1.9%)[2][7] Dimensional Fund Advisors (0.64%) Shanghai Samsung Semiconductor (0.3%)[8]
Number of employees	c.288,200 (2021)[2][9]
Subsidiaries	BYD Auto BYD Electronic BYD Transit Solutions[10]
Website	www.byd.com

BYD Co. Ltd. or BYD (Chinese: 比亚迪; pinyin: Bǐyǎdí) is a publicly listed Chinese conglomerate manufacturing company headquartered in Shenzhen, Guangdong, China.^[11] It was founded by Wang Chuanfu in February 1995.^[12] The company has two major subsidiaries, BYD Auto and BYD Electronic.^[13]

It is the world's largest electric vehicle manufacturer, and is a major manufacturer in automobiles (battery electric and hybrid cars, buses, trucks, etc.), battery-powered bicycles, forklifts, solar panels and rechargeable batteries (mobile phone batteries, electric vehicle batteries and bulk storage).^[14] Over the past decade, the main business income proportion from the automobile business has remained consistently above 50%.^[15]

Chairman Wang Chuanfu explained in 2022 that the "BYD" name is the pinyin initials of the company's Chinese name Biyadi, which itself was created from company's original trademark Yadi Electronics (亚迪电子, named after the Yadi Road in Dapeng New District, where the company was once based) and the character Bi was just conveniently added to give the company an alphabetical advantage in trade shows. However, the company later back-formed a slogan, "Build Your Dream", or more commonly "Build Your Dreams", to fit the "BYD" name.^[16][17]

BYD was founded in February 1995 with a focus on rechargeable nickel–cadmium (NiCd) batteries. While working as a vice supervisor at the Beijing Nonferrous Research Institute, BYD's founder, Wang Chuanfu, noticed an opportunity presented by the shift in Japanese companies from NiCd to high-value nickel–metal hydride (NiMH) and lithium-ion (Li-ion) batteries. Having identified this market shift in 1993, he moved to Shenzhen with his cousin Lu Xiangyang and founded Shenzhen BYD Battery Company Limited in 1995 to capitalize on the opportunity.^[18]

Unlike the capital-intensive and highly automated processes in Japan, BYD implemented a redesigned manufacturing approach by incorporating more manual labour. This manufacturing process, along with in-house production of key machinery, contributed to a substantial reduction in unit costs compared to Japanese competitors. Despite BYD's nominal productivity being ten times less than Japanese companies, the unit cost of a Japanese battery was five or six times higher.^[19] As the result, BYD Company Ltd. rapidly ascended to become the world's leading NiCd battery manufacturer by July 2002, accounting for 65% of global production. Within seven years, BYD secured its position as the second-largest producer of NiMH batteries and the third-largest in Li-ion batteries.^[19]

After ten years, BYD had captured more than half the world's mobile-phone battery market and was the largest Chinese manufacturer (and in the top four globally) of all types of rechargeable batteries.^[20][14] Mobile phone components were added to the BYD product line in the early 2000s. BYD Electronic was spun off in 2007.^[21]

In September 2008, MidAmerican Energy Holdings, a subsidiary of Warren Buffett's Berkshire Hathaway Inc, invested about US$230 million for a 10% (or 9.89%^[22]) share of BYD at HK$8/share.^[23]

BYD topped the 2010 Bloomberg Businessweek Tech 100 list, a list of large, fast-growing tech companies.^[24] Replacing machines with labor lowered costs, and the company began expanding beyond batteries, adding automobiles and mobile phone components.^[20]

In 2016, BYD unveiled a working monorail prototype marketed as "Skyrail" (Chinese: 云轨; lit. 'cloud rail')^[25][26][27] and announced they will enter the global rail transit market.^[28] The first public Skyrail line opened as a 9.7 km (6.0 mi) long loop line in Yinchuan's flower expo in 2018.^[29][30]

In 2002, Wang created a new affiliate to be listed on the Hong Kong Stock Exchange. The initial public offering (IPO) published on 31 July 2002^[31] focused solely on BYD's ambition to become the world's second-largest battery firm, with no mention of venturing into the automobile industry.

In January 2003, Wang made the unexpected decision to acquire Shaanxi Qinchuan Auto Company Limited (Qinchuan Auto), despite facing disapproval from the BYD Company's board of directors.^[32] At that time, China had 28 car manufacturers, both foreign and local, prompting the government to restrict new entries into the automobile industry unless through the acquisition of an existing player. BYD invested ¥250 million in Qinchuan Auto, aiming to enter the Chinese automobile industry and securing a license for car manufacturing. However, Qinchuan Auto's technology was outdated, and expansion capacity was limited. BYD responded by constructing a new manufacturing plant in the Xi'an Development Zone within the same province, producing conventional petrol-powered cars.

Within two years, its first car, the BYD F3 made a debut with production starting in April 2005.^[19] The company produced its first plug-in hybrid vehicle, the BYD F3 DM in 2008, followed by its first production battery electric vehicle, the BYD e6 in 2009.^[33][34] In March 2022, BYD ended the production of pure internal combustion engine vehicles to focus on plug-in electric vehicles.^[35]

BYD is constructing monorail systems around the world, including the Guang'an Metro and the Guilin Metro in China, Line 17 in São Paulo and the SkyRail Bahia, both in Brazil.

BYD is part of a consortium that was awarded a pre-development contract to build a monorail from the San Fernando Valley to LAX via the Sepulveda Pass in Los Angeles.^[36]

BYD offers a rubber-tyred tram product, known as "SkyShuttle" (Chinese: 云巴; lit. 'cloud bus').^[37] Bishan rubber-tyred tram in Chongqing is operational.^[38]

BYD Home Energy System, simplified as BYD HES, was an integrated product, combining solar panels, battery, inverter, etc.^[39][40] This system generated electricity from solar power, and then stored it.^[41] It was sold in Japan.^[42]

This section needs to be updated. Please help update this article to reflect recent events or newly available information. (September 2022)

The company has a number of subsidiaries, including BYD Auto. Partial list:^[43]

• BYD (HK) Co Ltd
  • Trading in NiCd, NiMH and Li-ion batteries and related products,^[43] it is a wholly owned subsidiary of BYD Co Ltd that in turn wholly owns Golden Link Worldwide Limited.^[21] Golden Link Worldwide Ltd is an investment holding company incorporated in the British Virgin Islands.^[43] A wholly owned subsidiary of BYD (H.K.) Co Ltd,^[44] itself a wholly owned subsidiary of BYD Co Ltd,^[21] as of 2007 Golden Link held nearly 70% issued share capital of BYD Electronic (International) Co Ltd.^[21]
• Shenzhen BYD Electronic Parts
  • Production and sale of NiMH and NiCD batteries, hardware products, instruments and flexible printed circuit boards are performed by this subsidiary Shenzhen BYD Electronic Parts Co Ltd.^[43]
• Shenzhen BYD Microelectronics
  • Established in 2002,^[45] it is responsible for the design, production and sale of ICs for use in the mobile phone industry.^[46] It is registered as a sino-foreign joint venture.^[43]
• BYD Electronics
  • An investment holding company incorporated in the Cayman Islands.^[43]
• BYD Electronic Hungary Kft
  • Originally Mirae Hungary Industrial Manufacturer Ltd, and responsible for the manufacture and sale of mobile handset components, BYD Electronic Hungary Kft was purchased from Mirae Industry Co Ltd on 12 February 2008.^[43] Prior to the purchase, it manufactured handset housings for Nokia.^[43]
• Foshan Jinhui Hi-tech Optoelectronic Material
  • A joint venture with Foshan Plastic Group Co Ltd and BYD (H.K) Co Ltd,^[47] it manufactures material ion exchange membranes.^[43]

The company has its corporate headquarters in the Pingshan District, Shenzhen, Guangdong province of China. Its North American headquarters are in Downtown Los Angeles, and BYD has sales offices in various countries.^[48]

BYD is characterized by its vertical supply chain system, originating as a battery company in 1995 before venturing into cars (via BYD Auto) in 2003. Post-entry into the automobile industry, BYD strategically developed the entire automotive industry chain, emphasizing core technology research and development. Proficiency in key components, such as batteries, motors, and electronic control was achieved, marked by a large-scale, fully automated production line for batteries.^[15]

BYD diversified into research and development (R&D) of semiconductor by establishing BYD Semiconductor in 2020. Core components, including automotive chips and the Dilink automotive intelligent system, were independently developed. The establishment of Fudi Department companies from December 2019 focused on power batteries, automotive lighting, electronics, powertrain, and molds. BYD heavily invested in core component development, with a substantial R&D budget and personnel. Founder Securities data reveals a 7.0% year-on-year increase in BYD's R&D investment, reaching 7.99 billion yuan in 2021. The company witnessed a 12.9% rise in R&D personnel, totaling 40,382 in 2021. Notably, BYD achieved a 19.7% year-on-year growth in the number of patents, reaching 29,777 in 2020.^[15]

A pivotal transformation involved the transition of the parts and components division into subsidiary companies, collectively known as Fudi Parts and Components. This shift enabled independent operation, supplying not only to BYD but also to external automotive companies, fostering competition on a level playing field. While BYD's vertical integration bolsters its industrial chain and mitigates challenges like the global chip shortage, the model poses challenges in adapting swiftly to market changes, influencing the company's gross profit margin.^[15]

BYD has many production bases, including three locations in Shenzhen^[49] (one of which is on the self-titled 'BYD Road' (simplified Chinese: 比亚迪路; traditional Chinese: 比亞迪路; pinyin: Bǐyàdí Lù) in Pingshan District, Shenzhen),^[49] as well as sites in Huizhou,^[49] Shanxi,^[12] and Shanghai.^[12]

Auto production bases include an automobile assembly line in Xi'an, a K9 electric bus manufacturing plant in Dalian,^[50] a photovoltaic module (solar panel) Bloomberg New Energy Finance Tier 1 manufacturing plant in Beijing, an R&D center and nascent automobile assembly line in Shenzhen, and an R&D center in Shanghai.^[31]

US operations can be found in Elk Grove Village, Illinois, and San Francisco, California.^[14] BYD also acquired a site for a future North American headquarters in downtown Los Angeles, and has built and operates a manufacturing plant in Lancaster, California, near Los Angeles.^[51]

In 2019 a bus plant opened in Newmarket, Ontario to handle orders in Canada.^[52][53][54] BYD has three factories in Brazil, the first of which opened in 2015 for the production of electric buses.^[55] In April 2017, it inaugurated its second plant for photovoltaic modules. In 2020, BYD opened its third manufacturing plant in the country in Manaus, specifically for lithium iron phosphate batteries, for use in electric buses.^[56][57] BYD has two electric bus assembly facilities in Europe in Komarom, Hungary and Beauvais, France.^[58] BYD built a new facility in Chongqing, China for producing its Blade Battery,^[59] which are considered to be the safest EV batteries.^[60] The first plant of the company in India was opened in Chennai.

The company has been recognized for innovation; for example it has developed technologies that allow mobile phone batteries to be made at room temperature rather than in expensive, heated dry rooms.^[61] In 2010, BusinessWeek ranked BYD the eighth most innovative company in the world ^[62] and that same year saw Fast Company ranking BYD as the 16th most innovative.^[63] In 2016, BYD won the Zayed Future Energy Prize award for Large Corporations for their development of robust rechargeable batteries.^[64] In 2017, PV Magazine awarded BYD the top category of innovation on its newly launched battery storage system that advances progress in three categories: modularity, charging and discharging capacity, and efficiency.^[65]

In 2020, the Australian Strategic Policy Institute accused at least 82 major brands, including BYD, of being connected to forced Uyghur labor in Xinjiang.^[66]

On April 27, 2020, BYD hired attorney Charles Harder and filed a federal civil complaint in U.S. District Court, Southern District of New York,^[67] against Vice Media alleging defamation for a story about BYD using forced Uyghur labor in its supply chain which was published on April 11, 2020.^[53] BYD's case was dismissed with prejudice in March 2021.^[68]

In September 2021, BYD appointed Lu Kewen, an online influencer known for spreading antisemitic tropes, as a spokesperson for the company.^[69]

On November 5, 2021, a 36-year-old employee was found dead in a rented home. According to his relatives, his sudden death was due to high-intensity overtime work. However, no autopsy was conducted, so the cause of death remains unclear. BYD agreed to pay the deceased employee's family a lump sum of ¥200,000 RMB in compensation.^[70]

In 2022, the United States Department of Commerce found that BYD had circumvented tariffs on solar panels by routing its operations through Southeast Asian countries.^[71]

In July 2022, residents living around BYD's Changsha factory reportedly suffered various illnesses, including nausea, coughs, and nosebleeds. Residents purchased testing equipment, and found levels of TVOCs above safety standards; the residents protested outside the factory. BYD insisted that the factory complied with emission standards and threatened legal action against anyone claiming that the factory was the cause of the illnesses; they also shut down several production lines for repairs. Changsha authorities investigated the pollution claims. The same factory had been blamed for causing pollution that affected the health of nearby residents in 2019 and 2021.^[72]

In addition to patent litigation^[23] Foxconn sued BYD in Hong Kong and Illinois in 2007, alleging BYD poached 50 Foxconn employees and was complicit in the stealing of trade secrets to set up a competing cell phone manufacturing operation.^[73] Court proceedings were brought before BYD Electronic was spun off by BYD later in 2007, delaying the public listing^[74] on the Hong Kong stock exchange by half a year.^[75]

Foxconn^[when?] also opened proceedings in the district where BYD is headquartered, at the Shenzhen Intermediate People’s Court,^{[citation needed]} which referred the case to the Supreme People’s Court, which in turn commissioned an appraisal by the Beijing JZSC Intellectual Property Forensic Center into files in BYD's possession which were alleged to belong to Foxconn.^{[citation needed]} Eventually^[when?] the Shenzhen court made the final judgment: BYD's files contained non-public information originating from Foxconn, which could bring economic benefits to the holders, thereby, BYD was found guilty of infringing Foxconn’s trade secrets.^{[74][additional citation(s) needed]}

Afterwards, Foxconn withdrew the civil proceedings against BYD in mainland China, and sought criminal prosecution instead.^{[citation needed]} On March 20, 2008, the former executive director and Vice President of BYD was arrested.^{[citation needed]} Then on March 24 and 31 2008 two former employees of Foxconn were arrested and sentenced to 1 year and 4 months, and 4 years in prison respectively.^{[74][additional citation(s) needed]}

BYD issued a counterclaim to Foxconn in Hong Kong court, alleging defamation and bribery of Chinese officials as well as intimidation on Foxconn's part.^[73]

• Lithium iron phosphate battery

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