Shenzhen-based electric vehicle maker BYD is perhaps most famously known outside of China for the fact that Warren Buffet is a shareholder. Inside China, the company’s legendary status as a tech pioneer has taken on a new dimension since being named the only Chinese company in the top 10 of Fortune’s Change the World list this year.
First published in 2015, the business magazine’s annual list spotlights the top 50 companies who address major social problems as a core part of their business strategy and innovation.
BYD took third position in this year’s list, behind semiconductor giant Qualcomm and payments facilitator Mastercard. It was also the only car manufacturer listed among the 52 companies. Alibaba and Baidu were the only other Chinese companies to make it into the ranking, taking 37th and 39th spots, respectively.
According to Fortune, BYD was chosen for the impact it has created in the global electric vehicle industry. The carmaker has not only expanded the new energy vehicle market, but also made significant contribution to environmental conservation. In Shenzhen for example, BYD’s 16,000 electric buses and 22,000 electric taxis have brought down the consumption of petrol or diesel oil by 980 million liters per year, while reducing carbon dioxide emissions by 2.22 million tones.
As the US-based publishing group writes in its assessment of BYD: “BYD began life as a manufacturer of cell phone batteries and didn’t make its first car until 2003. But for three years, it was the world’s largest maker of vehicles that run partly or wholly on electricity (Tesla only recently overtook it).”
Fortune sees the company’s development of a flexible “E-platform” for EV design and construction as key to its success. “A basic BYD model sells for a mere US$8,500 or so, after subsidies—a key factor in evangelizing EVs more widely,” Fortune writes. “And a recently announced joint venture with Japan’s Toyota should expand BYD’s global footprint.”
BYD has made the prestigious innovation list before, taking 15th position in the launch edition. That was when it was first commended for the fact that its electric buses only required to be charged once for the full day of operation, and their cost of maintenance was lower than diesel buses. This helped improve the city’s air quality and reduce smog.
The timing could not have been better from a PR perspective, as Fortune’s list was published the day before BYD announced its latest financial results for the six months to June 30. Listed on the Hong Kong and Shenzhen bourses, BYD’s businesses include automobile, handset components and assembly, rechargeable and photovoltaic batteries. In the first six months, revenue rose 14.8% to RMB62.18 billion, while net profit soared 203.6% to RMB1.46 billion.
In its typically understated style, BYD reported that sales of new models had done well in the first half of the year, generating revenue of RMB33.98 billion, up 16.27% YoY, accounting for 54.65% of the group’s total revenue. Among which, the new energy vehicle business was up 38.88%, at RMB25.45 billion, representing 40.92% of the total.
Driving this growth (can’t escape the pun) was new models, apparently. As the company noted, its share of the Chinese market for EVs increased by four percentage points to 24%. That is against a backdrop of surging overall EV sales in China, up nearly 50% YoY, to 617,000 units in the first half, and despite a fall in overall vehicle sales across the country as demand for fuel-emitting vehicles has slumped. The company believes its newest models were largely to thank for this, particularly the “Tang EV”, which can accelerate from 0-100 km/h in 4.3 seconds and has a range of 500km. It is “regarded as the SUV with the most power in China, setting a new benchmark in the industry,” BYD writes.
In its financial report, management explained that the recent reduction in government subsidies had inevitably placed pressure on the industry. But in the long run, this is seen as being conducive to consolidating the market, promoting its healthy development. “Now the industry will be more market-driven, and new energy vehicle manufacturers with leading technology, reliable quality and good market reputation are likely to enjoy increasing market share,” it said.