"BYD is severely undervalued!" Li Ke vows to reach the global top spot within five years

Produced by / Electric New Species

Author / Jichuan

On October 8, at the Singapore Milken Asia Summit, BYD Executive Vice President Li Ke announced a clear goal externally: Planning to surpass Toyota Motor and Volkswagen Group within the next five years to become the world's largest automobile manufacturer.

Toyota and Volkswagen have deep roots in the global automotive market for decades, holding the top two spots on the sales list for years. Now, BYD has turned its sights on this position and set a clear timeline for itself.

This is the five-year plan announced by Wang Chuanfu at this year's shareholders' meeting, reiterated this time by executives on the international stage. This goal has long been written into corporate strategy and is now officially unveiled to the global market.

01.

Relying on Organic Growth to Chase Global Giants

In the global automotive industry over the past decades, giants mostly relied on acquiring brands to rapidly expand their territory. BYD took another path: growth momentum comes entirely from internal product iteration and globally localized production bases built independently.

More than ten years ago, BYD was just an inconspicuous member among many domestic automakers. Early on, it stabilized the market with fuel vehicles, then bet early on batteries and the new energy track. When many automakers still regarded new energy as a supplementary product line, BYD continued to invest in batteries, motors, and electronic controls, polishing core components bit by bit.

After the domestic new energy market heated up, BYD's model matrix rapidly expanded, from sedans for families to city SUVs, covering consumer groups with different budgets. New factories went into production successively, and domestic sales kept climbing.

Viewed in a global coordinate system, Toyota and Volkswagen maintained low sales growth rates in recent years, while BYD has entered the top ten global automakers by sales, leading peers with compound growth. This growth is not a short-term trend; after stabilizing its foundation domestically, it is continuously releasing new volume overseas.

02.

Building Factories Overseas to Find New Growth Spaces

BYD's overseas expansion plan focuses on Europe, Central and South America, Asia, and Oceania, while the US passenger car market is temporarily set aside.

Li Ke explained the trade-off behind it: "BYD hopes the business environment has certainty and clear prospects; only then can it have the initiative to invest." The US is tightening access for Chinese connected vehicles through legislation, and rules may change at any time; while Europe, Southeast Asia, and Latin America have stable policies and considerable growth potential.

To enter the target market, BYD's approach is to build factories on site. Currently, the Thailand and Uzbekistan factories are in production, the Hungary factory has started trial production and will enter mass production in the fourth quarter, and factories in Brazil and Indonesia are under construction.

The benefits of localization accumulate in layers: transportation costs are compressed, it is easier to comply with local regulations, and after-sales networks are built step by step as factories land.

The results are already visible. Latest monthly sales data shows BYD's overseas sales surged significantly; on the streets of Southeast Asia and Latin America, BYD models appear with increasing frequency. The overseas market is becoming its core source of new volume to catch up with Toyota and Volkswagen.

03.

Batteries and Energy, Holding Another Key Card

Many people only look at the vehicle manufacturing when evaluating automakers, but BYD's competitiveness is rooted in the energy industry outside vehicle manufacturing: batteries are the core capability, and energy storage and photovoltaic businesses are also globally leading.

Most automakers need to purchase batteries externally, with costs and delivery rhythms in others' hands. BYD self-developed the Blade Battery; after maturity, it not only goes into its own vehicles but is also supplied externally, and sequentially extended into energy storage businesses. Many overseas parks and power stations use BYD's energy storage equipment, and the photovoltaic sector is also making joint efforts.

Multi-business synergy brings two major advantages. First, optimize cost structure; the energy sector continuously contributes stable cash flow, supporting R&D investment and overseas expansion in turn. Second, it changes the strategy for going global; entering a market, BYD not only sells cars but can also output a complete set of energy solutions integrated by cars, energy storage, and photovoltaics.

Li Ke stated directly at the summit that the market is still using the valuation framework of traditional automakers to evaluate BYD, which has led to its Hong Kong stock valuation being severely undervalued.

Summary

Five-Year Goal: Moving Towards Global No. 1

The strategic goal released this time in Singapore, where BYD set a plan to catch up with Volkswagen and challenge Toyota within five years, is backed by years of technological accumulation and the continuous landing of the global production capacity network.

The core of this competition far exceeds the number of vehicles sold annually; this is a long race between the old giants of the fuel era and the enterprises that have grown up in the new energy era.

BYD focuses on stable overseas markets, builds overseas production bases independently, holds the underlying capabilities of the battery and energy sectors, and moves forward steadily relying on internal growth. This catch-up story is also a microcosm of Chinese new energy vehicles walking onto the global stage.