China’s EV Industry Shows Remarkable Growth
What Did a Teardown of BYD’s EV Reveal?
Unexpected Secrets Uncovered
The Chinese government fully supports the electric vehicle (EV) industry, which has shown remarkable growth in the global market. In the first quarter of last year, it became the world’s largest automobile exporter for the first time ever. It is also expanding its presence in Europe, the home of the automobile industry, and East Asian markets such as Japan and South Korea.
On October 7, the Economic and Trade Bureau held a seminar to share EV technology in the East. At this seminar, disassembled parts of Chinese EVs, including BYD and Nio, were also exhibited, and some people said, “Japanese EVs are late to catch up with China.”
EV Experts Amazed
“How Can They Produce at Such Low Costs?”
The seminar featured over 90,000 parts from 16 imported EV models, including the Tesla Model Y, BYD’s entry-level crossover Atto 3, and Nio ET5. The seminar’s experts were surprised when they saw the disassembled parts of the BYD Atto 3, asking, “How did they produce it so cheaply?”
The Atto 3 model started sales in the Chinese market in February 2022. Its price is 4.4 million yen (about $28,840), which is relatively cheap compared to EVs of the same class. BYD then expanded its domestic sales lineup with the popular electric hatchback Dolphin and sedan Seal. The Dolphin has a starting price of 3.63 million yen (about $23,793), and the Sea has a starting price of 5.28 million yen (about $34,608).
BYD’s Secret: Producing Parts In-House
A Top Player in the Battery Industry
Industry experts are studying the secrets of Chinese EV manufacturers, including BYD, to produce competitive vehicles at low costs. The key secrets are design optimization and in-house production of components. In the case of the Atto 3’s electric powertrain, the E-axle, eight components are integrated, including the onboard charger, DC voltage transformer, motor, inverter, and reducer. This not only reduces weight but also reduces production costs.
BYD can also produce most of its vehicle components on its own, including key components such as electric powertrains and batteries. BYD is also a company that ranks first or second in terms of market share in the EV battery manufacturing industry. As of the first half of this year, it ranked second after China’s CATL, with a global market share of 16.4%.
In-House Production of Most Parts
Aggressive Benchmarking
Since EV batteries account for 1/3 of the production cost, the fact that they can be produced in-house is a significant advantage. BYD is known to produce most of its vehicle components in-house, except for windows and tires. In addition to the Atto 3, it actively shares parts with other models, such as the Seal and Dolphin.
Aggressive benchmarking also contributed to the explosive growth in the short term. Last year, Nikkei BP Research Institute dismantled the BYD’s Seal and found that many vehicle parts were similar to Tesla’s Model 3. Unlike conventional vehicles with dozens of ECUs, the vehicle’s electrical systems were controlled entirely by five ECUs, like the Model 3’s.
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