BYD’s Rise from Batteries to Car Behemoth

In April 2025, something remarkable happened: BYD, the once-scoffed-at Chinese electric vehicle company, outsold Tesla in Europe for the very first time. It wasn’t a fluke. It was the culmination of a 30-year journey that began in a dusty factory in Shenzhen, led by a man who didn’t even know how to drive when he decided to build cars.

In 1995, Wang Chuanfu, an orphan from one of China’s poorest provinces, borrowed $350,000 from his cousin to start a rechargeable battery company in Shenzhen. Armed with degrees in chemistry and metallurgy, Wang set up BYD with just 20 employees in a rented warehouse in Shenzhen, a fishing village that had been transformed to China’s first special economic zone.

Their goal? To challenge the Japanese dominance in nickel-cadmium batteries.

The early days were brutal. Staff worked 16-hour days assembling batteries by hand, sometimes sleeping on factory floors. According to one executive, “When everybody else is having a work-life balance, we only have work balance”. But Wang had a knack for reverse-engineering foreign tech and improving it at lower costs. Within five years, BYD had overtaken giants like Sanyo and Sony in rechargeable battery sales, especially for mobile phones and laptops.

By the early 2000s, BYD was supplying batteries to Motorola, Nokia, Samsung, and others. But Wang wasn’t content. He saw a bigger opportunity on the horizon.

Btw, what does BYD mean? It has no particular meaning. BYD Auto started adopting the slogan “Build Your Dreams” since it participated in the 2008 North American International Auto Show in the US.

But before it could even adopt the slogan, there were many strategic moves it had to undertake. In 2003, Wang made a shocking move: he acquired Xi’an Qinchuan, a failing state-owned car manufacturer. BYD, a battery company with no experience in auto engineering, had just bought a car factory. Investors were furious. Analysts were baffled. This guy doesn’t even have a driver’s license.

What he did have was vision.

He understood that the future of mobility was electric, and that batteries would be the core. His idea was simple, yet bold: combine BYD’s battery expertise with automotive manufacturing to build electric vehicles from the ground up.

But progress was slow. The company’s early cars were clunky and uninspiring. In a now-famous 2011 Bloomberg interview, Elon Musk laughed off BYD’s prospects, saying: “Have you seen their cars?”

If the 2000s were a time of slow burn, the 2010s lit the fuse. China, under tech minister Wan Gang, formally adopted electric vehicles as a strategic industry in 2009, a move aimed at breaking its dependence on foreign oil and Western automakers.

BYD benefited hugely from this pivot. Through China’s Made in China 2025 initiative, Wang gained access to government contracts, R&D incentives, and regulatory tailwinds. But if you know China and the support for its companies, unlike what happens in a place like Nigeria, you know they always have export in mind. So, to compete globally, BYD needed more than subsidies.

In 2016, Wang recruited Wolfgang Egger, the former Audi and Alfa Romeo design chief. The design transformation was immediate. BYD vehicles started looking sleek, even aspirational, a far cry from the boxy models of old. Function met form, and global interest began to stir.

When around 2007, Wang was introduced to Warren Buffett, he was called “a mix between Thomas Edison and GE’s Jack Welch”, a genius inventor with sharp business instincts. By September 2008, Warren Buffett and Charlie Munger had invested about US$230 million for a 9.89% stake for Berkshire Hathaway.

In the EV space, Tesla has always loomed large. But while Musk grabbed headlines and investors, Wang focused on something else: supply chain mastery. BYD didn’t just make cars; it made its own batteries, semiconductors, electric motors, and even the software that ran its cars.

As Musk famously wrestled with “production hell,” Wang quietly built an empire of in-house capabilities. This vertical integration has become BYD’s ultimate advantage, and the engine behind its rise.

Analysts say BYD owes its growth to its original business – batteries. They may not be wrong. They are among the most expensive parts of an EV and making them in-house saves BYD a lot of money. Competitors, including Tesla, rely on third-party manufacturers for batteries.

BYD is incredibly dynamic. As reported by Bloomberg, when the 2020 pandemic hit, Wang retooled his production lines previously used for assembling smartphones to make N95 masks. In a matter of weeks, BYD became the world’s biggest mask manufacturer, adding more than $1 billion to its coffers thanks to contracts with Japan’s SoftBank Group Corp., the state of California and others clamoring for personal protective equipment.

There is also the global push.

Blocked from the U.S. by security concerns, BYD expanded instead into Latin America, Central Asia, Southeast Asia, and Europe. It built billion-dollar factories in Hungary, Thailand, Brazil, Indonesia, and Turkey, promising thousands of local jobs in each. (Anyone asking why there was no such push to Africa? I bet you know the answer.)

In Brazil, BYD acquired land in the country’s newly branded “Lithium Valley.” In Chile, it nearly purchased an entire lithium processing plant for $290 million, aiming to secure the rare earths crucial to EV production.

BYD isn’t just building horizontally, it’s expanding up and down the value chain, turning itself into a fully self-reliant auto-industrial complex.

BYD’s electric and hybrid vehicle car sales rocketed from just under 180,000 in 2020 to 1.86 million in 2022. Last month, April 2025, BYD overtook Tesla in European EV sales for the first time. This is a symbolic victory on what has traditionally been Tesla’s most secure flank after North America. This came despite rising trade tensions and EU tariffs explicitly designed to throttle China’s EV momentum.

Even with this victory, problems are mounting.

In India, the government recently declared BYD was “not welcome,” effectively banning it. USA already effectively banned it despite Tesla being available in China.

In Mexico, approvals for a new plant are stuck in limbo, reportedly due to the CCP’s fears that U.S. intelligence might steal proprietary Chinese tech.

In Brazil, BYD faces a lawsuit over alleged “slavery-like” labor conditions.

And in Europe, regulators fear that BYD is undercutting local manufacturers, not just on price, but on quality.

Meanwhile, capital demands are mounting. EV production is expensive. And BYD’s breakneck expansion may soon require public listings, sovereign partners, or new state-backed finance, especially as geopolitical scrutiny intensifies.

Still, I’m sure someone like Wang would always be encouraged by the words of the Oracle of Omaha when in 2008 he said that one day, BYD would become “the largest player in a global automobile market that was inevitably going electric”.