China’s BYD pushes into emerging markets amid policy uncertainty in the U.S., Europe
BYD electric cars waiting to be loaded onto a ship are seen stacked at the international container terminal of Taicang Port in Suzhou, in China’s eastern Jiangsu province on February 8, 2024.
STR | AFP | Getty Images
In the race against Tesla for the global electric car market, Chinese automaker BYD is pushing hard overseas despite rising barriers to the U.S. market.
The Shenzhen-based company has already tested the waters in a number of countries with some immediate sales success, often just one year after entering.
Given policy uncertainty around Chinese EV exports to major markets like the U.S. and Europe, BYD is seeking to bolster overseas sales by moving production to regions perceived as more friendly. Already, the company has factories in Thailand, Brazil, Indonesia, Hungary and Uzbekistan in the works.
“They are targeting countries without very strong domestic auto industries, where they are likely to face less political pushback or headwinds from a policy perspective,” said CLSA research analyst Xiao Feng, noting that recent developments in the U.S. underscored the need for such an approach.
The Biden administration last month said it’s begun investigating whether Chinese-made cars pose national security risks, and raised the possibility of restricting the vehicles. The U.S. has tried to support adoption of electric cars domestically, but sales penetration is well below that of China.
BYD is moving quickly, beginning with Thailand, where the company expects its first factory outside China to be in operation by the end of this year. The automaker surpassed Toyota to grab the top spot for passenger car sales in Thailand in January, despite having no sales there just one year prior, according to data from Marklines.
Once operating, the Thailand factory will likely serve the rest of Southeast Asia. EY predicts the electric car market in the region will grow exponentially to at least $80 billion a year in sales in the next decade.
BYD has established itself in Southeast Asia as the top-selling EV brand, grabbing more than one-third of the market last year after barely selling cars there previously, according to data from Counterpoint Research.
Edge against Tesla
BYD sold 70,000 electric cars in Southeast Asia last year with a 35% market share, putting it ahead of rivals Vinfast and Tesla, according to data from Counterpoint Research.
One of BYD’s advantages over Tesla is a number of offerings in the mass market, as well as a mix of hybrid and battery-powered cars. Tesla exclusively makes more premium-priced, battery-only cars. Having hybrid options is beneficial for emerging markets where battery-charging infrastructure remains limited.
Southeast Asia will likely remain BYD’s strongest overseas market in the short term as the company pursues its goal of doubling its car exports from last year to 500,000 in 2024, according to Canalys automotive analyst Alvin Liu.
“The Southeast Asian EVs market is still in its early stages, and consumer habits need to be cultivated,” said Liu. “Cost-effectiveness” is particularly important, he added, with BYD’s Atto 3 and Dolphin models sold in the region at very competitive prices.
The company is also investing $1.3 billion to build an electric car factory in Indonesia in 2024, local media reported in January. This year, BYD also reportedly plans to significantly increase the number of its stores in Singapore and the Philippines.
The company did not respond to a request for comment about the reported plans.
While BYD does not break out capital expenditure by country, it disclosed 81.52 billion yuan ($11.33 billion) in autos-related capex in the first six months of 2023, nearly double the 45.94 billion yuan reported for all of 2022.
In another contrast with Tesla’s direct-dealership model, BYD often relies on local distributors and partners for sales in countries outside China. For example, in late 2022, BYD signed a distribution agreement with Sime Darby Motors in Malaysia.
Plan for the Americas
While U.S. scrutiny on China’s electric vehicle dominance is only growing, BYD is expanding in Brazil and has its sights on Mexico, on the U.S. border.
The company’s Americas CEO Stella Li told Reuters BYD is considering plans for a factory in Mexico, where it has started selling more electric cars.
If BYD does build a factory in the country, that could make it a “beachhead for the Americas,” Bill Russo, founder and CEO of investment advisory firm Automobility, recently told CNBC’s “Squawk Box Asia.”
“Mexico is part of the USMCA so there is an opportunity to export perhaps from Mexico to North America,” he said, referring to the free trade agreement that the United States, Mexico and Canada enacted in 2020.
BYD does not plan to sell passenger cars to the U.S., Li reportedly said at the end of February.
The automaker did not respond to a request for comment on this story.
China remains by far BYD’s largest market. Out of more than 3 million new energy passenger vehicles the company produced last year, just over 242,000 went overseas.
The rapid growth of BYD and other Chinese electric car companies has other automakers worried.
In February, the Alliance for American Manufacturing released a report warning that low-cost Chinese imports could be an “extinction-level event for the U.S. auto sector” and called on Washington to prematurely block imports from Mexico.
That was just weeks after company releases confirmed that BYD was well ahead of Tesla in terms of vehicle production.
Europe and other markets
A global push to go electric has given Chinese automakers potential market opportunities, especially as growth slows at home.
“BYD needs to look for more overseas opportunities in other regions where the EV penetration will accelerate with infrastructure development for its long-term sustainable growth, not losing share against the US and European automakers,” said Liz Lee, associate director at Counterpoint Research.
BYD announced late last year it would open a factory in Hungary, and in January said production would start in three years.
The news came just months after the European Union announced a probe into the role of subsidies in China-made electric cars.
BYD is also selling cars in Australia, the Middle East and Africa, and in January announced the launch of production at its jointly owned facility in Uzbekistan.
The Nasdaq MarketSite in New York, June 9, 2023.
Michael Nagle | Bloomberg | Getty Images
Silicon Valley executives and financiers publicly opened their wallets in support of President Donald Trump’s 2024 presidential run. The early returns in 2025 aren’t great, to say the least.
Following Trump’s sweeping tariff plan announced Wednesday, the Nasdaq suffered steep consecutive daily drops to finish 10% lower for the week, the index’s worst performance since the beginning of the Covid pandemic in 2020.
The tech industry’s leading CEO’s rushed to contribute to Trump’s inauguration in January and paraded to Washington, D.C., for the event. Since then, it’s been a slog.
The market can always turn around, but economists and investors aren’t optimistic, and concerns are building of a potential recession. The seven most valuable U.S. tech companies lost a combined $1.8 trillion in market cap in two days.
Apple slid 14% for the week, its biggest drop in more than five years. Tesla, led by top Trump adviser Elon Musk, plunged 9.2% and is now down more than 40% for the year. Musk contributed close to $300 million to help propel Trump back to the White House.
Nvidia, Meta and Amazon all suffered double-digit drops for the week. For Amazon, a ninth straight weekly decline marks its longest such losing streak since 2008.
With Wall Street selling out of risky assets on concern that widespread tariff hikes will punish the U.S. and global economy, the fallout has drifted down to the IPO market. Online lender Klarna and ticketing marketplace StubHub delayed their IPOs due to market turbulence, just weeks after filing with the Securities and Exchange Commission, and fintech company Chime is also reportedly delaying its listing.
CoreWeave, a provider of artificial intelligence infrastructure, last week became the first venture-backed company to raise more than $1 billion in a U.S. IPO since 2021. But the company slashed its offering, and trading has been very volatile in its opening days on the market. The stock plunged 12% on Friday, leaving it 17% above its offer price but below the bottom of its initial range.
“You couldn’t create a worse market and macro environment to go public,” said Phil Haslett, co-founder of EquityZen, a platform for investing in private companies. “Way too much turbulence. All flights are grounded until further notice.”
CoreWeave investor Mark Klein of SuRo Capital previously told CNBC that the company could be the first in an “IPO parade.” Now he’s backtracking.
“It appears that the IPO parade has been temporarily halted,” Klein told CNBC by email on Friday. “The current tariff situation has prompted these companies to pause and assess its impact.”
‘Cave rapidly’
During last year’s presidential campaign, prominent venture capitalists like Marc Andreessen backed Trump, expecting that his administration would usher in a boom and eliminate some of the hurdles to startup growth set up by the Biden administration. Andreessen and his partner, Ben Horowitz, said in July that their financial support of the Trump campaign was due to what they called a better “little tech agenda.”
A spokesperson for Andreessen Horowitz declined to comment.
Some techies who supported Trump in the campaign have taken to social media to defend their positions.
Venture capitalist Keith Rabois, a managing director at Khosla Ventures, posted on X on Thursday that “Trump Derangement Syndrome has morphed into Tariff Derangement Syndrome.” He said tariffs aren’t inflationary, are effective at reducing fentanyl imports, and he expects that “most other countries will cave and cave rapidly.”
That was before China’s Finance Ministry said on Friday that it will impose a 34% tariff on all goods imported from the U.S. starting on April 10.
At Sequoia Capital, which is the biggest investor in Klarna, outspoken Trump supporter Shaun Maguire, wrote on X, “The first long-term thinking President of my lifetime,” and said in a separate post that, “The price of stocks says almost nothing about the long term health of an economy.”
However, Allianz Chief Economic Advisor Mohamed El-Erian warned on Friday that Trump’s extensive raft of import tariffs are putting the U.S. economy at risk of recession.
“You’ve had a major repricing of growth prospects, with a recession in the U.S. going up to 50% probability, you’ve seen an increase in inflation expectations, up to 3.5%,” he told CNBC’s Silvia Amaro on the sidelines of the Ambrosetti Forum in Cernobbio, Italy.
Former Microsoft CEOs Bill Gates, left, and Steve Ballmer, center, pose for photos with CEO Satya Nadella during an event celebrating the 50th Anniversary of Microsoft on April 4, 2025 in Redmond, Washington.
Stephen Brashear | Getty Images
Meanwhile, executives at tech’s megacap companies were largely silent this week, and their public relations representatives declined to provide comments about their thinking.
Microsoft CEO Satya Nadella was in the awkward position on Friday of celebrating his company’s 50th anniversary at corporate headquarters in Redmond, Washington. Alongside Microsoft’s prior two CEOs, Bill Gates and Steve Ballmer, Nadella sat down with CNBC’s Andrew Ross Sorkin for a televised interview that was planned well before Trump’s tariff announcement.
When asked about the tariffs at the top of the interview, Nadella effectively dodged the question and avoided expressing his views about whether the new policies will hamper Microsoft’s business.
Ballmer, who was succeeded by Nadella in 2014, acknowledged to Sorkin that “disruption is very hard on people” and that, “as a Microsoft shareholder, this kind of thing is not good.” Ballmer and Gates are two of the 12 wealthiest people in the world thanks to their Microsoft fortunes.
C-suites may not be able to stay quiet for long, especially if the recent turmoil spills into next week.
Lise Buyer, who previously helped guide Google through its IPO and now works as an adviser to companies going public, said there’s no appetite for risk in the market under these conditions. But there is risk that staffers get jittery, and they’ll surely look to their leaders for some reassurance.
“Until markets settle out and we have the opportunity to access valuation levels, public company CEOs should work to calm potentially distressed employees,” Buyer said in an email. “And private company managements should refine plans to get by on dollars already in the treasury.”
— CNBC’s Hayden Field, Jordan Novet, Leslie Picker, Annie Palmer and Samantha Subin contributed to this report.
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