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00:00This is a story about changes that are too big to ignore.
00:03For many years, the global car market has been dominated by the same small group,
00:08countries like Japan, Germany, and the United States, but no longer.
00:13In the span of five years, China leapfrogged the largest automakers in the world,
00:18going from sixth place to first.
00:20It now exports more vehicles than the United States and Japan combined.
00:25And no company tells that story better than electric carmaker BYD,
00:30Bloomberg's Tom McKenzie reports from Paris.
00:34At an opera house just north of the Champs-Elysees, a lavish debut, even for Paris.
00:41The star of the show, not a performer, but a product.
00:45This car is the latest creation of BYD,
00:48a Shenzhen-based electric vehicle maker that's taking the world by storm.
00:53Today, it's China's biggest car company by sales.
00:56I want to be the best valuable brand in the auto industry.
01:01But it wasn't so long ago that other automakers literally laughed them off.
01:05This was Tesla's Elon Musk here on Bloomberg back in 2011.
01:09There's competitors now ramping up.
01:11And as you're familiar with, BYD, which is also on the West Coast,
01:14I think they're ramping up production of their electric vehicles.
01:16Warren Buffett owns 10% stake in that.
01:18Why do you laugh?
01:19BYD is trying to compete.
01:22Why do you laugh?
01:23Have you seen their car?
01:25You don't see them at all as a competitor.
01:27Since then, a lot has changed.
01:30BYD now has almost a million employees.
01:33It says it files an average of 52 patents per working day.
01:38And in 2025, for the first time, BYD beat Tesla in total car sales,
01:44claiming the title of top electric vehicle maker in the world.
01:48How would you characterise BYD's growth in recent years?
01:53Yeah, explosive.
01:54Ryan Fisher is the electric vehicle and charging analyst at Bloomberg NEF.
01:59They've, from 2021, gone from, like, barely on the map, if you know what I mean,
02:03if you look at the chart, to having 4 million plus sales
02:07and being in the top 10 automakers in the world.
02:09You come from the industry, Ryan.
02:11How is BYD viewed within the industry?
02:14Similar to Musk's comment, like, who are these?
02:16I think now people are changing it to, oh, yeah, we're kind of scared.
02:20For a better idea of just how seriously BYD
02:23and the Chinese auto sector broadly are being taken now,
02:26just listened to Ford CEO Jim Farley speaking last year.
02:30It's the most humbling thing I've ever seen.
02:33Their cost, their quality of their vehicles is far superior
02:38to what I see in the West.
02:42We wanted to get a first-hand look at the battle for the future of automaking,
02:47so we went to Paris to see the rollout of BYD's new car.
02:51There, we spoke with the woman on the front lines of the firm's global expansion.
02:56Why Paris?
02:57Yeah, very good question.
02:59Paris is a city full of energy and also art.
03:04Stella Lee has led BYD's charge into markets beyond China,
03:09including here in France.
03:10As the company's number two, after its founder,
03:13Lee also helped engineer its transformation from a battery start-up
03:17into an auto-manufacturing powerhouse.
03:20So, you know, I joined BYD when BYD is a very small company.
03:24They started with 20 people, $350,000 US investment.
03:29So I joined BYD the second year.
03:32My first job is for overseas marketing promoting manager.
03:36So I went to Hong Kong, set up the first,
03:39like a kind of international office in Hong Kong in 1997,
03:44and then came to Europe in 1999 with $30,000 US cash
03:49and a 140-feet container battery.
03:52The message is you need to survive to sell the battery.
03:57And sell the battery she did,
03:59securing deals with Motorola and Nokia,
04:02back then leaders in the mobile phone space.
04:05An IPO followed, then a major investment from Berkshire Hathaway.
04:09With each step, the company grew
04:11and doubled down on research and development
04:13and bringing suppliers under their own roof.
04:16What do you think the biggest structural advantage is
04:20that BYD has over its competitors?
04:23Two things.
04:24One is technology.
04:26Two, today, like, we have 120,000 R&D engineers.
04:29We invent 52 patents per day.
04:32The second is BYD have very strong
04:35vertical integration capability.
04:37What does this mean?
04:38It means, like, we can do innovation much faster.
04:41We can do cool stuff much more than any other people.
04:44That's the reason you sold BYD in the past two years.
04:47We have, like, we have the sporty car called the Yang Wan U9.
04:52We have 3,000 horsepower.
04:54That is the fastest car on the planet.
04:57It's capable of well over 300 miles an hour.
05:01This feels like China turning up and just saying,
05:04um, yeah, we'll have all the records.
05:08Sadly, BYD didn't let us race their hypercar to the Arc de Triomphe,
05:12but we did drive their latest luxury EV, the Denza Z9 GT.
05:18Who do you see as your main competitor?
05:20Who is the brand that you're really competing with
05:22in this premium segment now with the Denza Z9?
05:25Under all the cool technology in this car,
05:29I did not see any competition here.
05:31Given the company's origins,
05:33it's no surprise that the carmaker's key feature might be its battery.
05:37The range is long and the charge is fast,
05:40far faster than anything else on the market,
05:42if done through their planned system of flash chargers.
05:46Fisher says it remains to be seen how quickly BYD can roll those chargers out
05:51and whether their new cars will beat the competition in the field.
05:54But there's little doubt that their tech is impressive.
05:58When you think about their advantage in batteries that they've managed to produce,
06:02it does seem kind of like incredible.
06:04They've come out with the golden egg.
06:05They've done it incredibly quickly with the best technology at the best price.
06:09What's more, the new car has the profile of a Porsche
06:12and the horsepower of a Bugatti,
06:14all at the price of a Subaru Outback,
06:17but only in China.
06:20Here in France, it runs about 115,000 euros or $135,000.
06:25So with this one, it can be true.
06:28It's 0 to 100 km, 2.7 seconds.
06:312.7.
06:34Not all of BYD's vehicles target the luxury space.
06:38The lowest cost model in the UK,
06:39where Chinese cars now account for one in every 10 new vehicles sold,
06:44goes for under £19,000 or about $25,000.
06:49Cheap, but not the cheapest.
06:50Nor is that the goal, according to BYD's special advisor, Alfredo Altavia.
06:57What do you say to regulators and consumers?
07:00How do you convince them that BYD isn't just a low-cost disruptor?
07:05BYD has never been and will never be a low-cost player in any segment.
07:13Our main standing argument is value for money.
07:18Altavia came to BYD after a career as an executive with the competition.
07:23As the former head of Fiat Chrysler's European operations,
07:26he was a close aide to former CEO Sergio Marchionne
07:30and was considered a top contender to take over his role.
07:33What are the real ambitions of BYD in Europe?
07:37Is it volume or is it positioning in the premium segment?
07:40Or something else?
07:42I won't answer with our volume target, because you will not believe me.
07:47But certainly, we want to be one of the key players
07:51in this industry on a global scale.
07:55If you were an auto executive at a European legacy carmaker right now,
08:00as you were once, how worried would you be?
08:06Quite worried.
08:07About a million units sold last year overseas or international sales.
08:13One and a half million is the number that I've seen for 2026.
08:16Yes.
08:17Are you on track to meet that, to beat that?
08:20Yeah, easily.
08:21Easily? Easily beating one and a half million this year?
08:24Yes, easily.
08:26In recent weeks, the war in Iran and the soaring fuel prices that have come along with it
08:31have added new momentum to electric vehicle demand.
08:35China's exports of EVs and hybrids soared to a record high in March, with BYD leading the way.
08:41But for all the optimism about international growth,
08:45the company has faced major challenges in its largest market, back home in China.
08:51I want to talk about the here and now in the Chinese market.
08:54How would you characterize the current state of the Chinese auto market?
08:58Chinese auto market is super competitive.
09:01BYD recently posting a roughly 20% drop in year-on-year profit, the first time since 2021.
09:07Is that as bad as it gets, do you think?
09:10No, it's nothing.
09:11Because first, because you need to understand the scenario behind where price war and competing with an EV car.
09:20Because everything we do, the next day our company will copy.
09:24But then for BYD now, we bring another protection river.
09:27It's our flash charging technology.
09:30The second generation blade cell.
09:32So this we call the protection river.
09:35I think it will keep our competition several years behind us.
09:38Are you seeing signs of recovery in the Chinese market?
09:42Yes.
09:42And the second, the market in China in Q4, Q1 is not good.
09:48Because all the subsidy, even if we have a small portion left, is 100% gone.
09:53Recent moves to wind down government support are a headwind for China's EV makers.
09:59But Fisher says subsidies haven't been the only driver of their rise, especially in BYD's case.
10:07How much of BYD's success is down to Chinese government support over the years?
10:12There was the investigation from the European Union about which specific automakers were getting the most subsidies and therefore what
10:19tariffs they should achieve.
10:20BYD was actually on the lower end of the spectrum than some of those.
10:22I think what the Chinese government have done and what some people look as maybe I would be jealous of
10:28it is that they aligned everything they were doing.
10:30They had an automotive plan.
10:31They got involved with the metals and mining.
10:33They provided the subsidies.
10:35Some of this was about oil independence.
10:37And some of this was about winning the automotive industry, right?
10:41This is a massive part of GDP in many countries.
10:43And they've done that successfully.
10:44So I don't look at the Chinese and feel like they've done anything massively wrong.
10:50I actually feel like we've been a bit naive as policy makers in Europe and places like that.
10:56Some critics may look at BYD's success and the success of other Chinese automakers in Europe and in other markets
11:03outside of China
11:03and say this is a classic example of China shifting excess capacity to other markets.
11:10Would that be a fair criticism?
11:12I think it's a fair criticism.
11:14We see it across industries.
11:16China obviously has leverage and you've seen that in the negotiations where they've tariffed different countries.
11:22Maybe the French keep them out of their subsidies and then they get hit with tariffs back on brandy or
11:27something like that.
11:28Fundamentally, consumers want the cheapest products and the best ones and the Chinese have managed to achieve that.
11:35So far, American consumers haven't gotten their hands on China's latest EVs.
11:40Biden-era tariffs of over 100% have kept BYD and others out of the U.S. car market.
11:46But Donald Trump and China's Xi Jinping are set to meet in May and those trade barriers are likely high
11:52on the agenda.
11:54U.S. car makers might not have long before Chinese cars show up on American shores,
11:59something that Ford's Jim Farley was well aware of when he spoke to Wall Street Week.
12:03I've never seen a competition like this.
12:06The government bet on EVs before anyone else in the world.
12:09They're the largest market in the world and now they're the most important market in the world.
12:13We can compete and win against them, but we have to bring our A game and we have to learn
12:18a lot of new things.
12:19In 2027, Ford is set to debut a line of EVs starting at around $30,000, which Farley describes as
12:27a response to BYD.
12:28But he's also talked to the Trump administration about forming joint ventures with Chinese firms to build cars locally.
12:35Volkswagen and Stellantis have already made similar deals.
12:38And as each car maker and country decides how to respond to China's rise,
12:44they must grapple with the costs and benefits of protectionism or an alternative.
12:50If you can't beat them, join them.
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