In Monopoly, you pass “Go” and collect $200. In the race to EV domination, you pass Tesla and collect 201.1 billion yuan.
At least, that’s the case for BYD, which reported the amount Wednesday in third-quarter revenue, a 24 per cent increase over the same period last year. That converts to about US$28.2 billion, handily topping the US$25.2 billion reported by Tesla in its third quarter—a first for BYD.
The company’s sales growth comes in spite of trade barriers erected in Europe, the U.S. and now Canada. Nor, evidently, have the tariffs affected BYD’s growth strategy to one day make half its sales outside of China. This week, former Stellantis U.K. lead Maria Grazia Davino joined the firm to oversee its base in Europe.
What’s driving BYD’s rise: For starters, it makes its own battery, the Blade, which has impressed everyone from Apple to Winnipeg-owned bus maker Alexander Dennis. Its sales are pulling ahead of other Chinese automakers thanks to affordable vehicles that boast features like in-car karaoke. The company itself got early funding from major investors like Berkshire Hathaway, and from sweeping Chinese government incentives.
What to watch for: BYD’s blockbuster earnings may be the start of something bigger.
The company is expected to announce its final decision on a new plant in Mexico after next week’s U.S. election. If it goes ahead, the factory would represent BYD’s biggest incursion yet into an North American auto ecosystem that has been relatively free of trade barriers thanks to the USMCA trade pact. Canadian auto-industry advocates like Flavio Volpe have warned that a flood of Chinese firms into Mexico could threaten the livelihoods of Canadian auto suppliers by undercutting their prices, since the Chinese economic strategy is more focused on gaining market share than turning profit.
Will BYD roll the dice on Canada?: Canadians are unlikely to be wandering the show floors of local BYD dealerships anytime soon.
Canada’s 100 per cent tariff on EVs imported from China went into effect on Oct. 1. In a perhaps telling sign, records indicate BYD’s lobbying registrations in Ottawa have since gone unrenewed. Meanwhile, a ban on Chinese-designed vehicle software is under discussion at the federal level, potentially adding another hurdle for BYD in this country, regardless of where it builds its next factory.
The feds have more changes in the works. On Oct. 10, the government completed a consultation on tariffs for Chinese-made batteries and semiconductors, though it has yet to announce a plan. Then, on Oct. 18, Ottawa said it would accept applications from companies that believe they should be exempt from the tariffs on fully assembled cars, trucks and buses.
BYD already had 30 workers assembling electric buses in a 45,000-square-foot facility in Newmarket, Ont., and has supplied the vehicles to transit fleets in Toronto, Vancouver; Grande Prairie, Alta; St. Albert, Alta; Longeuil, Que.; and Montreal. (Toronto announced at the end of September that the lion’s share of its EV bus fleet will now be supplied by New Flyer and Nova Bus.)
Sean Stephenson, a trade lawyer at Dentons, declined to comment on BYD, saying that assessing one company’s future under the new tariff regime is difficult because rules of origin for automotive products can be highly complex.
Still, Stephenson expects many companies to welcome Ottawa’s apparent flexibility on EV tariffs—even if it came 18 days after the new levies were implemented. With more tariff decisions to come, he said, “there is still a lot of uncertainty.”
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