BYD Reigns Atop China’s Electric-Vehicle Market

Vertical integration is the automaker’s competitive advantage.

Alysha Webb, Contributor

November 29, 2023

3 Min Read
BYD Qin Plus-EV
BYD offers Qin compact sedan in battery-electric, plug-in hybrid versions.

China is the world’s largest passenger-vehicle market and largest electric-vehicle market.

As of October, some 24 million light-duty and commercial vehicles were sold in China, according to the China Association of Automobile Manufacturers. New Energy Vehicles – which include battery-electric, plug-in hybrid electric and hydrogen fuel-cell vehicles – accounted for 37.4% of all sales in October.

One company dominated the NEV market: BYD.

The Chinese automaker has achieved that dominance because of its unusual history, say panelists at the recent Inside China Automotive Conference held by Automotive Futures.

That makes BYD’s success difficult to duplicate, they say.

“BYD’s development is unique, starting with battery manufacturing,” says panelist Hua Wang, professor of strategy and innovation management at the Emylon Business School in Lyon, France. “The learning curve is long.”

BYD, based in Shenzhen in southern China, was founded in 1995 to produce rechargeable batteries. Within 10 years it was a top supplier in the global mobile-phone battery market. BYD’s low costs, made possible by in-house production of key machinery, played a crucial role in that fast rise.

The battery maker moved into producing internal-combustion-engine vehicles in 2003 and continued to produce key components in-house, including semiconductors and electronic control systems.

In 2008, BYD began manufacturing plug-in hybrid electric vehicles. A year later, it began manufacturing battery-electric vehicles.

BYD ceased production of non-hybrid gasoline-powered vehicles in 2022.

In 2022, BYD sold 1.8 million units; this year’s sales are expected to hit 3 million units.

In August, BYD BEVs and PHEVs occupied four of the top five best-seller spots in China.

BYD’s high level of vertical integration accounts for its competitiveness, says Wang. Besides producing many of its own components, BYD also integrates self-produced batteries, motors and control systems.

“This kind of high-level vertical integration is unique to BYD, and I personally think it will be very difficult to be copied by other automakers,” he says.

Ironically, other suppliers helped BYD develop its competitive edge.

When it arrived on the auto manufacturing scene in 2003, BYD had difficulty attracting “mature” suppliers for its first vehicle, says panelist Connie Chuanjuan Wu, founder of Beacon Consulting and a former senior manager at several multinational automotive companies.

“So BYD only bought critical systems such as braking,” she says. “They brought everything else in-house.”

BYD Song-Plus.jpg

BYD Song-Plus_0

Competitive Edge Likely to Remain

While BYD’s early vehicles may have been seen as low-quality, that is no longer true. One indicator, and result of, this rise in quality is a change in the destination of its exports.

BYD exported 56,000 electric vehicles in 2022; that is expected to surge to 250,000 in 2023, according to Wang’s presentation.

The top destinations for BYD’s exports in fourth-quarter 2022 were Spain and the Netherlands, followed by India and France, according to

In all of 2022, the top three destinations for all Chinese BEV exports were Belgium, the U.K. and Spain, according to panelist David Coffin, a senior international economist at the U.S. International Trade Commission’s Office of Industry Competitiveness and Analysis. The U.S. ITC is an independent federal agency.

In 2018, the top three destinations were Bangladesh, Chile and the Netherlands.

“As a whole, exports (of BEVs) to high-income countries have increased dramatically over the last three years,” he says, and one reason for that is improved vehicle quality.  

BYD’s competitive edge likely will remain and continue to evolve, Wang says. “Its philosophy of high-level integration hasn’t changed.”

And BYD’s “very closed” in-house coordination to improve and increase its vehicles’ performance is “something we cannot at the moment find in some other companies,” he adds.

About the Author(s)

Alysha Webb


Based in Los Angeles, Alysha Webb has written about myriad aspects of the automotive industry for more than than two decades, including automotive retail, manufacturing, suppliers, and electric vehicles. She began her automotive journalism career in China and wrote reports for Wards Intelligence on China's electric vehicle future and China's autonomous vehicle future. 

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