Rise of China’s EV makers threatens Western automakers, UBS report says

BYD, China’s biggest-selling auto brand, has a 25 percent cost advantage over North American and European brands, giving the Shenzhen-based company ample firepower to undercut rivals on their home turf as it expands globally.

A UBS teardown of a 2022 BYD Seal sedan found 75 percent of the components were manufactured in-house.

The figure — double the global average — is the secret to BYD’s cost-advantage in its quest to control its own fully integrated supply chain.

The Seal is almost wholly made in China, with around 10 percent or less of parts from foreign suppliers, UBS estimates.

“It’s really a showcase of Chinese engineers and engineering dividends,” said Gong, pointing to BYD’s 600,000-strong workforce — five times larger than Tesla’s — including 90,000 engineers.

BYD, which also makes its own batteries and semiconductors, has a 15 percent cost advantage over Tesla’s Chinese-made base Model 3 sedan, and a more than 30 percent advantage over VW’s ID3, according to the UBS report.

BYD dethroned Volkswagen as China’s top-selling car brand earlier in 2023.