The fast-growing BYD, headquartered in China, has expanded into the premium automotive market with the introduction of the first of two new luxury electric vehicle (EV) brands it is releasing this year.
Luxury Line
At a media presentation on Thursday, Jan. 5, Bloomberg reported that the Shenzhen-based automaker revealed the U8, a sport utility vehicle produced under the Yangwang brand. Without revealing specifics, BYD said the SUV's price would be in the "million yuan" range.
Among electric vehicles in China, that would put it in the elite price tier. The US Tesla Model Y SUV currently starts at $288,900 yuan ($42,030).
BYD, financed by Warren Buffett, is rapidly closing the gap on market leader Tesla. It produces roughly 70,000 EVs each month from its Shanghai facility by boosting production of its higher-priced EVs geared at upscale clients and refreshing its current inventory.
On the same day, BYD also introduced the U9. It is a high-end electric sports sedan.
Very little information was made available about the cars beyond their technical specifications.
However, BYD did brag that the U8 had four electric motors, the automaker's characteristic blade batteries, and the ability to drive through water in an emergency. With video showing driving in snowy weather and with a puncture, BYD has already touted the safety credentials of its new premium brand.
The manufacturer of batteries and semiconductors has not revealed where the high-end labels would be made available to the public.
Related Story: BYD Outsells Tesla in 2022, Delivering 1.86 Million Units, Mainly in China
Industry Woes
Despite the effects of Covid on manufacturing, BYD saw its sales of new-energy vehicles, like EVs and hybrids, increase to 1.86 million last year from about 604,000 in 2021.
In December last year, a senior BYD official indicated that production was down by at least 2,000 vehicles per day and that 20-30% of workers could not enter the workplace due to quarantine restrictions.
At the same time, sales of its EVs dropped from the previous month for the first time since February 2022.
There has been a slowdown in the growth of the Chinese passenger car market, with sales expected to increase by just 1.8% to 20.7 million in 2022. Despite this, demand for EVs has remained steady. The China Passenger Car Association projects EV sales to reach 8.4 million by 2023, up from an estimated 6.5 million last year.
"We look forward to BYD's overseas expansion and the new brands to be launched in 2023, which should enhance value," said Jing Yang, corporate research director at Fitch Ratings.
Yang emphasized that BYD is resilient owing to lengthy order backlogs and a reliable supply chain, as per Bloomberg.
After dropping by 28% in 2022, BYD stock in Hong Kong is up 7.9% after only three days of trade. After producing fewer EVs than anticipated in the previous quarter, Tesla's stock dropped by as much as 65% last year and another 12% on Tuesday, Jan. 3.
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