BYD building own Europe plant more likely than taking one over

LOS ANGELES: BYD Co. is exploring setting up its own factory in Europe, a top executive told Bloomberg News, suggesting the Chinese carmaking giant is more likely to establish its own plant than take over one from Ford Motor Co. in Germany.

"We aren’t focusing on certain companies’ facilities,” BYD Executive Vice President Stella Li said in an interview from the company’s new North American headquarters in Pasadena, California. She said the carmaker is more interested in building its own plants rather than acquiring other companies’ factories.

"We’re doing feasibility studies to see our plans for the future,” Li said. "Like if we set up our facility in that region, what’s the best solution out there?”

While there are "no target countries to build facilities yet,” BYD wants to have solid sales and dealer networks in Europe, along with service centers, in order to ensure consumer confidence in the brand, she said.

Ford has been in talks with around 15 potential investors in its plant in Saarlouis, German, including BYD, people familiar with the matter have said. The Wall Street Journal first reported the preliminary discussions last month.

After wild success at home selling affordable electric cars to the masses, BYD is looking beyond China. It’s already announced plans to sell its vehicles across Europe, including in Germany, Sweden, Norway, the Netherlands, France and the UK.

In Asia, BYD is constructing its first EV production plant in Southeast Asia, in Thailand, and is selling to consumers in Australia, Japan and Singapore. It also has an assembly line in India.

However the company, which counts Warren Buffett’s Berkshire Hathaway Inc. as its largest shareholder, is facing escalating concerns in Europe and the US regarding China’s increasingly competitive car industry and the nation’s progress becoming an auto-exporting powerhouse.

A new climate and energy law enacted by President Joe Biden last year seeks to limit reliance on minerals from China in the EV supply chain and encourage more companies to make electric cars locally in the US.

Rival automakers are also pondering how to compete on cost: Stellantis NV chief executive officer Carlos Tavares said in December that "to fight the Chinese, we will have to have comparable cost structures.”

Shenzhen-based BYD, which sold 1.86 million pure electric and hybrid cars last year, mostly in China, is mainly concentrating its efforts around Asia, Europe and Latin America in its quest to dominate the clean passenger transport market.

Biden’s Inflation Reduction Act isn’t "helping the US to be competitive in the EV race or helping US consumers enjoy the best, the most innovative technology,” Li said, adding that BYD sees China and Europe leading EV adoption and moving to EV penetration rates of more than 30% in the near term.

In Latin America, BYD plans to be in every major market, taking an aggressive approach to signing up dealerships to sell not just passenger cars, but commercial vans, buses and taxis, Li said.

"BYD wants to move the EV adoption rate in Latin America to 10 to 20% in the next three to five years, from less than 2% now,” Li said. "I think this change will start from corporate, government fleets.”

As well as car manufacturing plants, BYD, which produces its own batteries and semiconductors, is "definitely” looking to build a battery facility outside of China, envisioning a supply chain of its own that’s truly global and capable of serving its plants in the world wherever they may be.

Even though Li sought to water down BYD’s interest in taking over the existing automotive assets of other companies, there have been discussions in the past.

In November, BYD said it was talking to Brazil’s Bahia state to take over some ex-Ford facilities there and in December, the company told Bloomberg it was looking at potentially more than one European plant to produce passenger electric cars.