China is reportedly overtaking Japan in the production of affordable electric cars, leaving Japanese manufacturers perplexed. During a recent seminar on electric cars held in Japan, analysis of the recent BYD Act 3 revealed surprisingly low production costsraising numerous questions among professionals.
The success of BYD, a leading Chinese company in the electric car sector, is challenging Japan’s technological supremacy in the automotive sector. BYD’s ability to produce electric vehicles at very competitive prices is causing much concern among Japanese manufacturers, who are struggling to keep up.
BYD produces almost all of its vehicle components in-house.
The BYD Atto 3, an electric SUV launched in Japan in January 2023 with a starting price of around $30,000quickly became a case study. At the seminar organized by the Central Japan Economic and Trade Bureau, participants asked: “How can it be produced at such a low cost?”
BYD’s success isn’t limited to Act 3. The company also introduced the Dolphin and Seal models to the Japanese marketwith starting prices of $24,500 and $33,000 respectively. Notably, the Seal has already become the best-selling imported electric car in Japan in August, just months after its launch.
The key to BYD’s competitive advantage lies in its vertical integration. The company, which began as a battery manufacturer, makes most of its vehicle components in-house. This strategy allows BYD to significantly reduce production costs.
According to data from CnEVPost, BYD is the world’s second largest manufacturer of batteries for electric vehicleswith a market share of 16.4% in the first nine months of 2024. Considering that the battery can account for more than a third of the total cost of an electric car, this in-house manufacturing capacity gives BYD a significant advantage over competitors.
BYD’s approach extends far beyond batteries. For example, for the Dolphin model, the company produces all components except windows and tires in-house. Additionally, BYD integrates multiple parts into single components, such as its 8-in-1 E-Axle system, which combines motor, inverter and gearbox.
BYD’s success is pushing the Japanese auto industry to reconsider your strategies. Sho Kato, department manager of Nissin Seiki, said: “I was surprised by the low number of parts used by BYD and Tesla. Our company also hopes to leverage the experience gained in the existing business to enter the field of electric vehicles.”
While BYD, and other Chinese manufacturers, advance rapidly, some Japanese manufacturers such as Toyota they appear to be late in the transition to fully electric vehicles. In the first eight months of 2024, just 1.5% of the 6.6 million vehicles Toyota sold were fully electric.
Despite that, Toyota promises to accelerate the transition thanks to new technologies such as advanced batteries and next-generation electric models. Meanwhile, BYD continues its global expansion, targeting markets such as Japan to support its growth.
Source: www.tomshw.it
