Employees work on a production line of NEV maker BYD in Xi’an, Shaanxi province. (YUAN JINGZHI/FOR CHINA DAILY)
Warren Buffett-backed Chinese new energy vehicle maker BYD has recently replaced German car giant Volkswagen as the world’s third most valuable vehicle maker, buoyed by prospects of the booming NEV sector in China.
Shares of the Shenzhen, Guangdong province-based company closed up 3.98 percent on Wednesday. That brought its market cap to $142.7 billion, dwarfing Volkswagen’s $101.6 billion.
BYD is the only Chinese automaker among the top 10 most valuable peers globally, but it still trails Elon Musk’s Tesla and Japan’s Toyota.
Tesla sits atop the list of automakers, at $742.5 billion as of Wednesday, more than three times the value of Toyota, although the latter’s shipments last year were over 10 times Tesla’s corresponding total.
BYD’s growth shows the potential of the global NEV sector, said analysts, and the trend is even more obvious in China, the world’s largest market for such vehicles since 2015.
Even in April, when China’s car market slumped to its lowest point in a decade, NEV sales rose 44.6 percent to total almost 300,000 units, according to the China Association of Automobile Manufacturers.
In the first four months, NEV deliveries in the country totaled 1.56 million, up 110 percent from the same period a year prior. That accounted for 20 percent of total vehicle sales in China from January to April, said the CAAM.
BYD, the largest NEV maker in China, ceased production in March of conventional gasoline-powered vehicles to focus on fully electric and hybrid cars.
It sold over 100,000 vehicles in April, up 136 percent year-on-year, becoming the only major carmaker in China to see sales growth for the month.
The momentum continued in May, with 114,183 units delivered, up 152.8 percent from the same month last year.
Chinese NEV startups also performed well, with four firms delivering over 10,000 units in May. Among them, three saw sales double during the month on a year-on-year basis.
They expect the trend to continue, as they are coming out with new models.
Li Auto plans to unveil its second model, a full-sized sport utility vehicle, later this month, and Nio is delivering three new models this year, including the ET7 sedan that is to take on BMW’s 7 Series.
Toyota launched presales of its first electric SUVs in China in late April, becoming the latest major international brand to enter the country’s heated NEV race.
As NEVs have become a viable alternative to gasoline-powered vehicles in China’s big cities, there is great potential in the vast countryside as well, said Huaxi Securities.
The brokerage said vehicles sold in third-tier or smaller cities accounted for 44 percent of China’s total vehicle sales in 2021, yet the figure was 32 percent when it came to the NEV segment.
Market prospects have attracted 26 automakers to join since June to promote NEVs in the countryside, offering over 70 electric models for buyers in rural areas.
Soochow Securities analyst Huang Xili expects the campaign to increase NEV sales by around 100,000 units to reach 5.25 million units this year, up from 3.5 million in 2021.