Stella Li of Chinese car maker BYD: ‘We don’t want to engage in a price war’

“I don’t even remember what Tesla’s sales numbers are. I’m much more focused on my own numbers,” says Stella Li, president of BYD Europe, the Chinese electric vehicle maker.

Li’s dismissiveness is more than likely performative. Surely no major car company executive is unaware of what their competitors’ sales might be. But it is also indicative that she has her eyes on a much bigger prize than merely giving Elon Musk an earnings-call headache.

Li is one of BYD’s most senior executives and was recently recognised by Time Magazine as one of the 100 global business people most influencing action on climate change, but in spite of BYD regularly vying with Tesla as the world’s biggest seller of electric cars, apparently she’s not that bothered about what the American car maker does.

BYD – Build Your Dreams – is one of China’s most influential companies. It has grown from a small battery maker, founded in 1995, to a company that does it all, from making its own cars in an ever-growing line-up of BYD and sub-branded models, to being a key supplier of batteries for phones to the likes of LG and Motorola.

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It is also at the centre, alongside some of its compatriot car makers, of a global political storm. The European Union is warily circling the Chinese car brands, accusing them of using vast government subsidies to create an unlevel playing field with the big European brands. Higher tariffs for Chinese electric cars have already been spoken of.

For BYD, it probably won’t matter much if the EU does start to impose higher tariffs as the company is already building a factory in Hungary, and expects the first European-market BYDs to be built there in 2025

In the US, Joe Biden’s administration is mulling action against Chinese brands over security concerns because the cars “collect large amounts of sensitive data on their drivers and passengers”.

On this second point, Li laughs and points to the mobile phone on the table in front of her. “I don’t think there’s a scientific basis for this. If you are worried about this, you should be more worried about your cell phone. It is with you all the time, with a camera and a microphone. So that is ridiculous.”

On the EU’s accusation of subsidies creating an unfair playing field, Li is if less dismissive, and more combative. “I think it’s an unfair claim. The subsidies in this market go to the consumer, so the encouragement is to have many brands to compete, and those brands have to keep tight control of their costs, of their supply chain. Every company has to be more effective for the customer. Also, the subsidy they’re talking about – if you bring your car company to China, and build a facility here, such as in Shanghai as some foreign brands have, they will receive even better incentives than BYD. So this is a false claim.”

For BYD, it probably won’t matter much if the EU does start to impose higher tariffs as the company is already building a factory in Hungary, and expects the first European-market BYDs to be built there in 2025. BYD is also building factories in Brazil and Thailand, and Li announced during our interview that the company is eyeing three, possibly four more new factories outside China, with a strong possibility that one of those will be a second European factory.

Where? That is undecided, although Li did flatly deny that BYD has been one of the brands rumoured to be in talks to buy underutilised Fiat factories in Italy.

The move to European and global manufacturing isn’t a tariff-dodge (although that may well yet prove to be a significant side benefit) but part of a broader strategy to take BYD from being a Chinese car maker, and turn it into a truly global player.

In a presentation at BYD’s vast headquarters in Shenzhen, large name-checks were given to the likes of Mercedes, Ford, and yes even Tesla, noting their enormous – possibly incalculable – contributions to the history of the motorcar.

The acknowledgment of the efforts of others is close to touching, but equally the inference is clear – BYD regards itself as being in the same vein. Indeed, while most car makers are claiming that they are in line with the Paris Accords in trying to limit global warming to 1.5 degrees, BYD goes a lot further, saying that its aim is to actually cool the planet through its dedication to electric power.

That dedication is evident in the fact that BYD is still, at heart, a battery company. Aside from the Blade lithium-iron phosphate batteries that it makes for its own cars (and which it is slowly starting to supply to others), it still makes phone batteries, it still makes laptop batteries, and it also makes massive Magic Cube static storage batteries, which are currently in use – in Germany among other countries – as a way of buffering the production of renewable energy from solar and wind power.

It seems slightly odd that having launched in Ireland with a range of fully electric models – the Seal, Dolphin, and Atto 3 – BYD would take what many might consider a backward step by introducing a line-up of plug-in hybrids

Which makes it all the more surprising, then, that BYD is going to start selling plug-in hybrids in the Irish market. The Seal-U is a high-rise SUV version of the popular and award-winning Seal saloon. This will go on sale in the autumn here, and it will come with BYD’s DM-I, which uses a 1.5-litre petrol engine backed up by an 18kWh battery that gives the Seal-U a claimed electric-only range of well over 100km.

Combine a full battery and a full fuel tank, and BYD claims that the Seal-U will knock off a 1,000km journey without stopping.

[ BYD's impressive Dolphin is bound to make a big splash ]

It seems slightly odd that having launched in Ireland with a range of fully electric models – the Seal, Dolphin, and Atto 3 – BYD would take what many might consider a backward step by introducing a line-up of plug-in hybrids. Li is adamant, though, that a plug-in hybrid is a better solution for many, especially those whose reluctance to go fully electric is evident in the recent tumbling sales of electric cars in Ireland and across Europe.

[ How are car makers responding to the slowdown in electric car sales? ]

“I think that the infrastructure, rather than the price of the cars, is the bottleneck in electric sales,” Li says. “If you drive one of our DM-I cars, with the range that is offered, you can spend 99.4 per cent of your driving on fully electric power, and the 0.6 per cent is those trips, maybe twice a month, where you drive it as a regular hybrid.”

Li’s theory is that, having become used to a plug-in hybrid, customers then switch to fully electric. “You can see it in the Chinese market: 80 per cent of people who buy our plug-in hybrids then replace those cars with electric. Once the user figures out how to charge, and once the infrastructure gets built up in the next three to five years, you will see this.”

One thing Li won’t do is chase those brands that are price cutting, such as Tesla. BYD’s plan is to set a reasonable price at which it can make a profit, and then not change it much, helping to protect residual values as much as possible.

In spite of models such as the Dolphin, which has a starting price of as little as €25,000, Li does not want people to consider BYD as a bargain brand. Rather, pointing at her mobile phone once again, she wants it to be considered a brand that sells on technology and innovation. “We don’t want to engage in a price war,” she says.

However, Li did confirm that BYD’s most affordable electric model – the compact Seagull hatchback – will come to Europe, and with right-hand drive, next year. The Seagull caused no end of consternation in European motoring boardrooms when it was revealed last year, with a price starting at the Chinese equivalent of €10,000, a price point of which any European electric car maker can only dream right now.

However, the Seagull that will eventually find its way to our shores will be a different car, re-engineered and remade to be suitable for Europe, and capable of passing the gruelling Euro NCAP crash test with at least reasonable scores, something that the current Seagull would be incapable of doing.

There will be more to come from BYD. Already, the company is establishing sub-brands in the Chinese market.

Denza, a BMW-esque premium brand built in co-operation with Mercedes, will come to Ireland shortly and it will likely be followed by both the Fangchengbao and Yangwang brands. Yangwang is already gaining a name for itself with its hulking U8 SUV, which has a 1,200hp plug-in hybrid power-train, can tank turn in 360 degrees on the spot, and even float for a while in deep water.

At 3.4 tonnes, it would require a HGV licence to drive one in Ireland, but combined with the McLaren-esque fully-electric U8 supercar, you can see Yangwang’s ambitions. Could it be called that in Europe? Or would it be rebranded as BYD-Yangwang for us?

Li is clear that she doesn’t want to see that happen: “You don’t call it a Toyota-Lexus, for example,” she says, although it remains unclear if European buyers would plump for such an unusual, to our ears, name.

[ BYD set to lose EV throne to Tesla as sales slip ]

Fangchengbao might have a similar problem, but its model line-up looks far more Europe-friendly. The Bao 5 is a Toyota Land Cruiser competitor with rugged styling and a luxurious interior, and an off-road-focused version of the 1.5-litre plug-in hybrid system.

‘Our thinking is that if we want to be present in Europe, we must become a European company. Yes, labour is more expensive, but we have to be there’

—  Stella Li, president of BYD Europe

It will be joined by a (smaller) Bao 3 and (larger) Bao 8 model, and even a wild roofless, windscreen-less sports car called the Super 9. The plan, apparently, is for these new brands to be entirely separate to the current BYD operations across Europe, with separate showrooms, but details are still somewhat scarce.

What about a vehicle designed only for Europe? It’s a possibility, says Li, noting that BYD has already opened a design office in Pasadena, California, and is starting to plan out a European research and development centre, the location of which has still to be announced.

“Our thinking is that if we want to be present in Europe, we must become a European company,” Li says. “Yes, labour is more expensive, but we have to be there, and we have the advantage that we make all of our components in-house, so that helps us to balance out the costs. But if you go to the market, you have to contribute to that community, to bring the jobs to that community, to that market where you are.”

Wherever the wrangling over tariffs and government supports might yet lead, Li is adamant that BYD is a private company. Once, in its early days, it had been so on its uppers that it had to go to investment markets to get a cash injection to pay its wage bill.

In 1995, BYD was a company that started with 20 employees and the equivalent of about $350,000 in capital. Today, it employs 350,000 people globally and in March sold its seven millionth new energy vehicle. Listening to Li, it is only getting started.

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