For years, Tesla defined the global electric vehicle (EV) market. In 2024, that changed. According to industry sales data, BYD — Build Your Dreams — outsold Elon Musk’s company, delivering 4.3 million vehicles, a 41 percent jump from the previous year. Profits have doubled over the past two years.
Backers such as Warren Buffett, who invested in BYD back in 2008, have seen extraordinary returns. His $230 million stake is now worth roughly thirty times its original value. What makes BYD’s success stand out is not only its scale but also the features of its newest models: massaging Napa leather seats, 15-inch rotating OLED displays, rapid 10-minute charging, and an almost implausible claimed range of 2,100 kilometers — all at a price point comparable to a Volkswagen Golf.
The Technology Edge
Much of BYD’s advantage comes from its vertical integration. Unlike Tesla, which still relies heavily on suppliers like Panasonic, BYD produces its own batteries, semiconductors, and even glass panels. This structure allowed the company to sidestep the global chip shortage in 2021 and to profit directly from its own lithium mining operations in Tibet and South America.
At its factories in Shenzhen, Xi’an, and Changsha, a new car rolls off the line every 50 seconds. Automation reaches levels rarely seen in China — about 85 percent. The jewel of BYD’s innovation, however, remains the Blade Battery. Built with lithium iron phosphate, it’s safer and about 30 percent cheaper to produce than conventional lithium-ion cells. Ford and Toyota have already signed deals to use it in upcoming models.
Expansion Abroad
BYD’s international growth has been swift. In Thailand, it captured 40 percent of the EV market in just 18 months. In Norway, its Tang EV quickly ranked among the top five best-selling electric models. The company has also tailored products to specific markets: heat-resistant batteries for Israel, ethanol-electric hybrids for Brazil.
Partnerships are piling up. Uber has ordered 100,000 BYD cars to electrify its fleets. Amazon is testing BYD vans for last-mile delivery. Even Shell charging stations in Europe are being fitted with BYD fast-chargers.
Cracks Beneath the Surface
Yet the story is far from seamless. In January 2025, GMT Research released a report alleging BYD is hiding massive debts. By analyzing its supply-chain financing practices — essentially paying suppliers with a delay of nine months rather than the industry norm of two — GMT estimated real debt at $44 billion, nearly seven times higher than BYD discloses.
Quality issues have also drawn scrutiny. Nearly 100,000 vehicles were recalled in September 2024 due to a steering column defect linked to fire risks — the largest recall in BYD’s history. Complaints range from malfunctioning radios and faulty GPS units to premature battery failures. In Europe, importers have reported mold in new vehicles and paint peeling after a single wash.
Perhaps more damaging are reports of questionable labor practices. In Brazil, authorities accused BYD in December 2024 of forced labor conditions at a factory site.
Inflated Numbers?
Analysts also suspect that BYD’s reported sales may be artificially boosted. The practice, common in parts of China, involves registering new cars under shell companies or leasing firms before reselling them as “0-km used” vehicles. Satellite images of vast parking lots filled with unsold BYD cars lend weight to the allegation. China’s Ministry of Commerce has opened an antidumping investigation.
The Subsidy Question
Behind BYD’s pricing power lies another uncomfortable fact: state subsidies. Between 2018 and 2022, the company received $3.7 billion in government support — more than any other automaker worldwide. In 2022, these subsidies accounted for roughly 26 percent of its net profit. Economists argue that without government backing, BYD would not exist at its current scale.
The concern is what happens when subsidies dry up. Already, the Chinese government has begun to phase out some direct incentives. BYD’s domestic sales slowed immediately in late 2024.
Three Possible Futures
Analysts outline three scenarios for the company’s next decade:
- Collapse: A debt crisis unfolds, suppliers go unpaid, and BYD becomes China’s equivalent of Lehman Brothers.
- Dominance: BYD weathers quality concerns, maintains state support, and rises as the global leader, leaving Western automakers as niche players.
- Trade War: Western governments retaliate with tariffs and bans, limiting BYD largely to China and emerging markets.
The outcome will not only decide BYD’s fate but also shape the future of the global car industry.
More Than Cars
At its core, BYD is not just about cars. The company is pushing into solar panels, energy storage systems, and even urban monorails under its SkyRail project. Founder Wang Chuanfu openly speaks of a vision where one in three cars sold worldwide will be Chinese — and half of those will bear the BYD badge.
Whether that ambition represents the next Toyota or the next Evergrande remains to be seen. What is clear is that BYD has become a litmus test for the contest between Chinese industrial policy and the market-driven systems of the West. And as the EV race accelerates, the stakes extend far beyond the showroom floor.
