BYD, the leading Chinese manufacturer of electric vehicles (and Tesla’s fiercest rival), has reportedly slowed down its plans to construct an EV factory in Vietnam. This information was disclosed to a shareholders meeting by an industrial park manager.
In May 2023, the Vietnamese government announced that BYD had chosen to construct an electric car manufacturing and assembly plant in the northern province of Phu Tho, where the company already operates a tablet production facility for Apple.
“Due to its strategy and the slowdown of the electric vehicle market, BYD slowed down (plans) to start construction,” Luong Thanh Tung, Vice Chairman of Gelex Group, the company that runs the industrial park where BYD would build the new factory said, as reported by Zawya.
Tung announced during a shareholders conference in Hanoi that following protracted talks, BYD had committed to set aside 100 hectares of commercial land at the Phu Ha industrial park for the construction of an electric vehicle factory.
However, he did inform the meeting that following the delays, the two parties were now looking for a good time to begin the project.
Due to a decrease in government subsidies, the growth of the electric vehicle market is anticipated to slow down globally in 2024.
The announcement of BYD’s investment plans by the Vietnamese government came after BYD CEO Wang Chuanfu’s May 2023 visit to the nation. The project’s start date and the amount of funding required were not specified in the statement.
According to the Vietnamese government, Chuanfu expressed his hope for “favourable conditions to complete investment procedures” during a meeting with Deputy Prime Minister Tran Hong Ha in May.
With plans to construct EV facilities in Indonesia, BYD is constructing an EV factory in Thailand. Over 3 million electric vehicles, including plug-in hybrids and battery electric vehicles, were sold worldwide in 2023.
Meanwhile, BYD set a 3.6 million sales target for 2024, up 20% from its record-breaking sales last year, China Business Network reported.
“The world’s largest electric vehicle manufacturer aims to sell 500,000 vehicles overseas this year, more than double last year’s total, and one million units in 2025,” Reuters reported, while giving out details about Chuanfu’s meeting with the BYD investors in March 2024.
Chuanfu’s ambitious announcement came at a time when the EV giant posted its slowest quarterly profit growth in two years, as vehicle sales lost momentum in China, the world’s biggest auto market.
In 2023, BYD hogged the limelight as it became the world’s biggest EV seller, overtaking Tesla. The venture has also embarked on an aggressive expansion into overseas markets such as Australia. It is also giving Tesla sleepless nights, by engaging in a fierce price war with the Elon Musk-led venture in China.
“Wang told investors that the new energy vehicle industry had entered a knockout round with a battle in scale, cost and technology over 2024-2026, the sources said. Over the next three to five years, the market share of foreign brands in China will fall from 40% to 10%, he estimated,” Reuters reported further.
The BYD boss also sounded cautious as he predicted that his venture’s vehicle margin would fall in 2024 as the price war intensifies, but said the automaker would ensure its profitability remains stable by improving sales.
Talking about BYD’s future roadmap, the EV maker will launch its next-generation plug-in hybrid system in May 2024.
“Fifth-generation DMI technology, for BYD plug-in hybrid vehicles, would enable fuel consumption of 2.9 litres per 100 km and combined ranges of up to 2,000 kilometres,” Wang said.
BYD, since February 2024, has been rolling out new versions of its line-up at prices 5-20% lower than earlier versions. It will also launch models priced under 200,000 yuan in the second half of this year that will be equipped with advanced driving-assistance systems, further challenging Tesla’s market dominance.