BYD Europe, the Chinese automaker backed by Warren Buffett’s Berkshire Hathaway, has set its sights on a bold goal: to outperform Tesla, Volkswagen, and Stellantis and become the largest battery-electric vehicle (BEV) seller in Europe by the end of this decade.

BYD’s European president Michael Shu recently shared the company’s ambitious plans during the Financial Times’ Future of the Car Summit.

“We are confident that we could be in a leading position,” Shu stated. “We are moving to the next stage to decide a huge investment in the EU, an investment that would be worth billions of euros.”

BYD’s strategy includes a significant investment in factories, dealerships and marketing across the region. One key element of their plan is a cut-price model based on the Seagull, which currently sells in China for less than $10,000. The European version of this model is expected to cost less than €20,000.

Europe’s car market is highly competitive, and BYD’s ambitions have caught the attention of industry leaders. Last year, the company briefly overtook Tesla as the world’s largest EV brand. Privately, Western industry leaders view BYD as a significant threat to Europe’s own car manufacturers.

However, Brussels is currently investigating whether Chinese carmakers use subsidies to reduce vehicle prices. This probe is expected to lead to higher tariffs on imported models. Shu emphasised that BYD’s strategy is to produce cars “in Europe for Europe.” By manufacturing locally, the company aims to avoid penalties and mitigate logistical challenges faced by carmakers importing vehicles from China.

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BYD is already constructing a new factory in Hungary, set to begin producing its first cars next year. Additionally, the company is actively exploring sites for a second plant. In addition to battery-electric cars, BYD plans to sell and produce plug-in hybrid vehicles in Europe. The slower installation of charging infrastructure in the region makes plug-in hybrids a practical choice.

Despite its ambitions, BYD’s battery-electric car market share in Western Europe was only 1.7% in the first quarter of 2024, according to Schmidt Automotive Research, cited in the FT. During the Financial Times conference, senior executives from Nissan, Peugeot, Volkswagen, and Hyundai acknowledged the fierce competition posed by Chinese carmakers, particularly in advanced battery technology.

BYD did experience a 42% decline in overall electric vehicle deliveries in the first three months of 2024 compared to the final quarter of 2023. This drop was due to flagging demand and increased competition in BYD’s home market. Although BYD overtook Tesla in electric vehicle sales during the final quarter of 2023, Tesla rebounded last month, posting sales of 386,810 vehicles in the first three months of 2024 — more than its Chinese rival but below the expected 450,000 units