China’s electric vehicle giant, BYD, which stands for 'Build Your Dreams', is on a rapid global expansion spree, and it is planning to make it big in the United States and take the fight to the market leader Tesla head-on. Worldwide push has become the most important strategic focus for BYD in recent times, and it has chalked out a plan to achieve this. No EV manufacturer can afford to ignore the United States market considering the sheer volumes. Accordingly, BYD is also looking to have a decent market share in the United States, and they have prepared a plan to do so. With careful planning and perfect execution, it can surely take on the battle against Tesla and become a big player in the United States. The most important hurdles that would need to be addressed would be creating some aspirational value around the brand and providing reliable and long-lasting products.
1 BYD Is Taking The War To Tesla
Besides looking at some of the major European markets for expansion, BYD has been focusing a lot on the United States with a single aim to dethrone Tesla. Tesla has been the undisputed king of the EV space and everyone in the market is targeting them and trying to dethrone it. This doesn't come as a surprise as Tesla is a household name in the United States when it comes to EVs. BYD is also to enter all the segments in the United States as opposed to only the luxury end of the market catered to by Tesla. This will help it gain more volume than Tesla in a shorter amount of time.
2 The Automaker Has An Impressive Range Of Products
The strategy to make it big in the United States is banking on a base of a strong product portfolio, and BYD has made sure it has a product for each class to compete against other rivals. BYD has a product to cater to each class and each budget in the market and this is their strong point as opposed to Tesla which primarily targets the luxury end of the market. While doing this, BYD will also need to keep its finances and margins in check as margins are usually higher in luxury products and hence, Tesla products earn a lot of profit for them. All in all, profitability will also need to be kept in check while looking at the budget end of the spectrum.
3 It Is Pretty Big Already
BYD was the world’s biggest seller of BEVs and plug-in hybrids in 2022 with a total of 1.86 million sales. Although this is much more than Tesla’s 1.3 million, the issue is that the majority of BYD’s sales come from China. As such, its sales are concentrated, which is never a good strategy to continue in the long term. BYD is a giant in China. However, in order to cater to different markets in the world and expand its footprint, it will need to adjust its strategy according to the demands of those markets, which is not easy for any manufacturer. Each market has a unique set of requirements that need to be met in order for any brand to succeed there, so BYD needs to understand the United States and other markets and its differences as compared to the Chinese market.
4 The Company Has A Very Advanced Battery Technology
BYD is way ahead of any brand in the world when it comes to battery technology. This has made them pretty successful in a comparatively short amount of time. However, it needs to market this technological prowess pretty aggressively in order to reach a completely new audience in the U.S. market, because, for the consumers here, BYD is a completely new and unknown brand. BYD has very battery technology through years of research and development in this field. BYD products have a very long range thanks to their unique battery technology that allows the batteries to hold an additional charge. This is BYD's USP since it has the best range in the category and subsequently completely mitigates the range anxiety issue that most EV owners worry about.
5 BYD Already Makes Buses In The United States
BYD is not a new player in the commercial vehicle market even in the United States. It has been producing electric buses at its California plant for a long time now. BYD has supplied its buses to cities like Los Angeles and Long Beach. However, despite all this, entering the passenger car market requires a completely different strategy as the buyer expectations are completely different in that segment. The experience in the commercial space has allowed it to learn a lot of things when it comes to manufacturing EVs that are reliable as well as capable. Being in the American market also allowed them to learn more about the general mentality of the people here when it comes to EVs and the value that people give to a brand. As such, brand aspiration is a big thing in the U.S.
6 BYD Has It All To Become A Household Name
Tesla has been the undisputed market leader in the United States and each and every manufacturer wants to dethrone the leader. In terms of technological prowess, BYD is right up there. However, in terms of brand recall, BYD has a long way to go in the United States. Tesla, on the other hand, is a household name in the country, and attaining the same position would take many years for BYD. BYD will need some serious marketing techniques in order to penetrate the United States market and become a household brand.
7 It's Not Going To Be Easy, But BYD Has The Might To Make It Big
The biggest hurdle for BYD in the United States would be the fact that its cars aren’t produced in the U.S. and are instead imported from China. This immediately puts it at a disadvantage since EVs manufactured in the U.S. are eligible for a federal tax credit of up to $7,500. This means, to customers, buying a BYD product will lead to a potential loss of up to $7,500 when compared to its locally produced rival products. This challenge is something that will need to be handled with the utmost care by BYD management otherwise it could backfire.
8 BYD’s Potential To Reshape The Market
Thanks to its game-changing products and technology, BYD has a lot of potential to completely reshape the automobile market in the United States. Even in terms of batteries, it has technology that is miles ahead of anything else on the market. Thanks to this, many of its products have an incredible range on a single charge as compared to rivals. The Blade technology for the batteries is what enables BYD to offer some amazing range figures. The Blade technology allows the batteries to stay cooler, thus enhancing the longevity and charge cycles. When batteries run cooler, it brings in a host of advantages and enhances the overall safety of the product hence, this Blade technology is a big USP of BYD and it could allow it to spearhead its way to the top of the market here in the United States.
9 It Has A Few Manufacturing Advantages
BYD has an ace up its sleeve in the form of lower product development costs. This is possible as the company has its own battery supply chain that enables low-cost manufacturing. Also, this enables BYD to price its products aggressively as it doesn't need to pay royalties for the technology. It has developed extremely advanced battery technology through years of research and development and market study and this enables the company to make products that are reliable and have a long range. Given the huge volumes in China, it has huge advantages of economies of scale, and hence, if it manages to replicate the same success in the United States, there would be nothing that could stop BYD.
10 The Company Wants To Make It Big In The United States
BYD has closely studied the United States' EV market, and it knows that it has a huge potential. With plans to dethrone Tesla, and technology to back those plans, it wants to make it big in the U.S. The United States is one of the biggest markets when it comes to EVs and everyone wants a piece of the pie. The biggest hurdle for BYD would be to overcome the fact that the brand lacks aspirational value and recognition in the United States. The fact that it is based out of China is also a big hurdle in itself. Once it overcomes these hurdles, there won't be anything stopping BYD. It has the right mix of products and associated technology. The only thing stopping BYD at the moment is its lack of experience in markets other than China. Once this is tackled, it will surely become a global player.