Largest Electric Vehicle
At BYD’s manufacturing plant in the southern Chinese city of Shenzhen, 600 workers and a host of robots mount tires and dashboards into electric cars that roll off the final assembly line every 90 seconds. “It could be every 45 seconds, ” says factory coördinator Jun Li as he points to a long line of freshly welded and painted car bodies. “We can make 900 a day in peak production. Now we’re making 500 a day.”
After years of double-digit growth, sales have dropped sharply for BYD, the world’s largest electric vehicle maker and a well-known brand in China (see “How Other Battery Manufacturers Could Help Tesla Reach Its Own Goals”), since the government lowered subsidies for electric vehicles. BYD’s popular and inexpensive Qin hybrid sedans have led to its 31 percent share of China’s electric vehicle market, according to China-specialized research firm JL Warren Capital.
Now BYD, which had revenue last year of $14.5 billion from cars and a variety of other battery-powered products, is trying to figure out how to cut the cost of each car without killing its profits. Its solution is to expand its fleet of electric vehicles, selling more electric buses, trains, and taxis to local governments, and to expand its overall production to drive down manufacturing costs.
Low costs are how BYD got its start. Founder chemist Chuanfu Wang launched the company in 1995 with $300, 000 raised from family. He and a team of 20 employees studied patents of other battery makers and then dismantled their batteries to see the components and how they were put together. They had to figure out the proportions of all the chemicals and the right manufacturing environment, and it took them half a year to determine how to manufacture without the kind of humidity controlled dry rooms that rivals like Sanyo used.
Using cheap labor, Wang designed a system of semi-automated production, and by 2002, he was employing 17, 000 workers, and BYD was one of the world’s top manufacturers of nickel-based batteries and lithium-ion batteries.
As the battery market for electronics matured and BYD faced increasing competition in China with the entry of new Chinese rivals, Wang branched out into cars, seeing the nascent sector as a way to leverage its manufacturing capabilities, and in time develop electric vehicles that could be powered by BYD’s batteries.
Initially Wang followed the same copycat method he’d used with batteries, developing BYD’s first model, the $6, 000 F3 compact sedan, by having a crew of engineers take apart the Toyota Corolla to see how the engine and body might be re-created. The F3, a pretty good copy of a Corolla for less than half the price, became one of the best-selling cars in China, and within about five years BYD was outselling big names like Volkswagen and Toyota (see “China’s New Green Machine”).
Soon engineers created a “dual mode” plug-in battery and gasoline engine vehicle that was cheaper and more efficient on a single charge than the Toyota Prius at the time. This one didn’t require reverse engineering. BYD already knew batteries, electric motors, and controlling systems, so it combined all the technologies together to form its own homegrown hybrid.