Is BYD the secret European champion?
The Football European Championship creates a stir: Own goals, controversial handball plays, a teenage exceptional talent. But economically, something is still hanging. At least one major automobile company hopes for this. VW is not it.
The Football European Championship 2024 in Germany will remain vividly in the memory of the stadium visitors and TV viewers not only because of dramatic (hand) plays, but also because of the sometimes mysterious band advertising in the arenas. Where previously a small car regularly drove the entire length of the band and advertised Volkswagen, suddenly unknown names and Chinese characters appeared: Alipay, Hisense, and BYD flashed over the advertising bands - at BYD, always with the note, number one in NEV.
And most of the spectators wondered: Who or what is BYD? And what are these mysterious NEV, where BYD is number one?
"Build Your Dreams" - Rapid Rise
The solution to the riddle is simple. BYD is a Chinese automaker that produces all types of electric vehicles, which in China are called NEV - New Electric Vehicles. This includes engines that are in some way powered by electricity, whether hybrids (HEV) with a gasoline engine as the primary power source and electric power assistance, pure battery electric vehicles (BEV), or plug-in hybrids (PHEV).
BYD is a relatively young automaker, originating from the 1995 Shenzhen-based battery and automotive electronic components manufacturer Yadi. BYD then became the marketing slogan of the automotive company: "Build Your Dreams".
Starting as a gasoline vehicle manufacturer in 2003, BYD's sales reached 455,000 vehicles of all types by 2019. Today, BYD is not only the world market leader in BEV and has dethroned Tesla. The Chinese company is also the global leader in electromobility, or number one in NEV.
Since 2023, BYD has also belonged to the exclusive club of the ten largest automobile manufacturers in the world and has surpassed German premium manufacturers Audi, BMW, and Mercedes-Benz.
"Build Your Dreams" - Continuous Growth
Undeterred, BYD has decided to strengthen its presence in foreign markets, especially since 90% of BYD sales occur in China alone and because the Chinese market for electric vehicles now shows structural weaknesses. To maintain its growth tempo and sell four million electric vehicles globally in 2024, BYD must export. But where? With the USA as a sales market being politically closed off, only Europe, South America, and Africa remain as potential export destinations.
With 240,000 exported vehicles in 2023, BYD is still a minnow in this regard. However, the company is determined to change that. In Germany, BYD intends to raise its profile. The automaker has launched a massive advertising campaign around the Euro 2024. At its core is the band advertising within the stadiums and the presentation of BYD electric vehicles outside the football stadiums and at prominent locations and fan zones of all EM cities. Officials were also allowed to use electric BYDs as transportation.
"Build Your Dreams" - with a System
The sponsorship direction of Chinese companies during the EM is clear: increasing brand awareness, market preparation. BYD was ready to replace Volkswagen as the main sponsor at UEFA. And BYD has already done this once - as number one in sales in China in the first quarter of 2023.
In this year, BYD plans to sell four million cars according to their own statements. In Europe, they aim to achieve market leadership by 2030 with a ten percent market share. In Germany, they aim for a five percent market share. According to data from the Kraftfahrtbundesamt, it was approximately 0.1 percent in the previous year. As of the end of May this year, BYD has sold only 777 electric cars here, which represents significant growth. For comparison, Tesla sold around 16,000 BEVs, Mercedes over 100,000 NEV. From the bare numbers, it is clear: The gap between intentions and achievements is vast.
Large-scale advertising actions during a European Football Championship and long-term expansion plans such as factory new buildings in Hungary do not suffice if customers do not convert the advertising messages into purchases. Everything is uncertain. The only thing that is certain: If BYD is to be the European champion in battery electric cars by 2030, the market must want these cars. It currently does not look that way.
Helmut Becker, the president of Tesla Motors Europe, expressed his concerns about the increasing dominance of BYD in the global electromobility market. Despite Tesla's strong presence in Europe, BYD's aggressive advertising during the European Football Championship and its ambitious expansion plans could potentially sway the market towards Chinese electric vehicles.
In an effort to compete with BYD, Tesla Motors announced its plans to invest heavily in manufacturing facilities in Europe, aiming to increase its production capacity and market share in the region. However, the success of this move will heavily depend on the European economy's willingness to adopt electric vehicles on a large scale.
Recognizing the potential threat posed by BYD, German automobile companies, including VW, are considering shifting their focus towards electromobility and electric vehicle production, in an attempt to keep up with the global trend and maintain their market share.
