Meet the billionaire backed by Warren Buffet who's driving China EV maker BYD ahead of flashier rivals:
China electric vehicle makers have won the attention of global stock investors in the past three years in part through hugely successful U.S. IPOs by upstarts Nio, XPeng and Li Auto. The stocks have all doubled in value since listing, thanks to growth in China’s auto market, the world’s largest. Their run has minted new billionaires, enriched venture capitalists and retail traders, and highlighted the shifting balance of power and technology in the global auto industry.
The way BYD’s Wang see it, EVs will soon dominate in China. The EV penetration rate of new sales during the first six months of the year rose from 6.4% in January to about 14% in June, Wang noted in written replies to interview questions from. “New phenomena never develop at similar rates, and the industry is changing at a pace even faster than imagined,” said Wang, adding that he expected new EV sales to account for 70% of the Chinese market by 2030.
Wang, an orphan born into one of China’s poorest provinces, made it into college and graduate school where he studied battery technology. After a stint as vice supervisor of the Beijing Nonferrous Research Institute, he was influenced by the wave of entrepreneurism sweeping China in the reform-minded 1990s. His institute set up a company in private-sector mecca Shenzhen, and that eventually led to Wang founding BYD there with his cousin Lv as a rechargeable nickel battery business in 1995.
For the first six months of the year, it sold 154,579 new electric vehicles, an increase of 154% from a year earlier. Wang’s BYD boasts an EV line that now includes buses, taxis, coaches and private cars, as well as logistics, construction and sanitation vehicles. To date, BYD delivers models in more than 50 countries and regions, including the U.S., where it assembles buses in California; in China, its partners include Toyota, with which it has a research and development joint venture.
It’s been a winning approach. “You start as a battery company,” Russo said. “You anticipate EV. You pivot to making vehicles. You stay true to your battery roots. You start with the fleet market because that’s what the market presents to you. You wait for the global leader Tesla to come in and open the retail segment, and you quickly follow up with retail-oriented products and then you separate them into purpose-built fleet designs.
Wang’s overall costs are likely to be lower than rivals due to his in-house component strengths, Russo said. Yet he’ll need that advantage because of price pressure from the growing number of new EV models produced by local rivals. One early investor just reduced its BYD holding this month: Himalaya Capital Management, whose founder Li Lu introduced Munger to BYD, trimmed its stake to 6% from a previous 6.35%.
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