BYD and Other China Electric Car Makers in 2022

BYD has increased its 2022 battery-electric (BEV) and plug-in hybrid electric (PHEV) car production target from 1.2 million to 1.5 million units. BYD’s old target was about half BEV and half hybrid (600K each). I would expect the new target to be 800K BEV and 700K PHEV.

In terms of battery electric cars, Tesla is the leader and BYD and Volkswagen Group are second and third. However, recent monthly production numbers have Tesla at 115k-120k per month in January 2022 and BYD at 46000 BEV in January 2022.

VW Group made 452,900 BEVs in 2021. This was more than the 320k BEV for BYD in 2021. If we want to count the $4k-5k Wuling Mini EV then those sold 395k in 2021.

Here are the China Jan 2022 car sales. Tesla exports most of its China production in the first month of every quarter.

There should be 4 million or more sales of BEV in China in 2022. Globally, BEV sales should go from 3.8 million in 2021 to about 7-8 million in 2022.

GAC Aion (Guangzhou Auto) completed the expansion of its existing factory to have an annual capacity of 200,000 e-cars. The second plant should start in December, 2022 production capacity will be 400,000 cars per year.

In April 2021, GAC Aion announced it would invest around 500 million yuan (US$85 million) to expand the plant’s capacity. GAC Aion built 123,660 vehicles in 2021. The plant only had a capacity of 100,000 units.

GAC has many plants and about eight joint ventures with global legacy auto companies.

The GAC Aion S cost about US$20-26k.

China phased out an $800 electric car subsidy and China EV sales dropped 18% from December, 2021. China usually has a weak start of the year for car sales. The loss of the subsidy hits the cheaper EV cars more than higher priced EVs.

Lynk (Geely), Great Wall and Li Auto have a lot of plug in hybrid sales. All of those companies are making a shift from plug in hybrid and some BEV to almost all BEV.

XPeng Motors had 98,155 BEV sales in 2021. NIO had 91,429 BEV sales in 2021.

There is a flood of iron LFP batteries coming from China which should reach a level for 40-60 million EVs in 2025. There will be enough LFP batteries for up to 10 million EVs in 2022, 17-20 million EVs in 2023 and 25-30 million in 2024.

Tesla will stay the global leader in BEVs and then they will be followed by BYD, Great Wall, Lynk (Geely), Xpeng and Li Auto and perhaps some upstart China EV companies. Volkswagen will likely fall behind several of the China EV makers. BYD could fall behind Great Wall Motors by 2024-2025. Great Wall Motors is targeting 4 million BEV in 2025 and is making huge investments. Great Wall motors owns SVolt Energy which is making a lot of iron LFP factories.

EV makers that are not making 4 million or more cars in 2025 would have less than 10% global market share.

Volkswagen Group had 12% global BEV market share in 2021 but this is falling in 2022. If Volkswagen Group was relatively flat in sales and only made 550,000 BEV in 2022 then their market share would drop to 8%. Carmakers that do not double BEV production will lose market share in a world with abundant iron LFP batteries. VW Group sold 116K ID4 in 2021.

Carmakers that can get to 1 million BEVs in 2025 might only have 2% market share.

It is very hard for new BEV makers or carmakers switching from ICE cars to BEV to scale to 100,000 BEVs each year. Carmakers selling less than 50,000 per year for each model they make will not be able to scale to high volumes. It would take 20 BEV models with 50,000 sales per year to reach 1 million total BEV cars per year.

Breakout models with 400,000 to 1 million or more car sales per year are needed to get to big volumes. In ICE cars, Toyota has big sales from the Corolla, Rav 4, Prius and Camry. VW Group has the Tiguan, Passat, Jetta, Golf and some other models.

If you struggle to name any of the cars or even remember the name of a car company then that car and that company is not doing well selling cars of that model in volume.

Great Wall Motors in EVs could become like BBK Electronics in smartphones. Realme, Oppo and OnePlus, Vivo are part of BBK Electronics.

40% of the global smartphone market is made up of many smaller Chinese, South Korean and other brands. Those companies sell many units but make almost no margin. It will be tougher to eke out unprofitable or barely profitable sales in EV space. The technology has to stabilize so that someone can create a competitive but barely profitable product. There is no Android software for EVs to equalize and create an acceptable base of features. Making a barely acceptable $50 smartphone is one thing but a barely acceptable car has always been a tiny segment.

The CEO of Stellantis says it costs 40-50% more to make and EV versus an ICE Car. Car buyers will not retreat to poor quality cars. The quality cars of the Japanese wave has meant that only good quality cars are acceptable for 90% of the market since the 1980s.

SOURCES – BYD, Great Wall, EV-volumes, VW Group
Written by Brian Wang,

3 thoughts on “BYD and Other China Electric Car Makers in 2022”

  1. When are we going to get EVs that have a lower sticker price compared to comparable ICE vehicles? I hope that LFP batteries will pave the way for that…

  2. But why does it cost 40-50% for Stellantis to produce an EV compared to an ICE vehicle? Only the battery is more expensive; all other parts are either significantly cheaper or the same price. Electric motors should be dirt cheap compared to the ICE motor..

    Apparently, the average price for batteries (cells?) was about 100 USD per kWh in 2021. For good measure, let's add 30 USD per kWh at the pack level, so a standard 70 kWh battery pack would cost 9100 USD..?

    The only conclusion would be that Stellantis – and other legacy Auto-makers – do not know how to benefit of the cheaper electric power train. In fact, it must cost them more using the cheap electric power train compared to the expensive ICE power train.

    I.e. legacy auto makers are really, really, really bad at making EVs.

  3. The acceptable base might be in the form of a chinese state sponsored FSD software package, which allows for a level of commonality/commodity status. But that would hurt a lot of domestic makers at the same time as lifting up the whole industry.

Comments are closed.