Is BYD the better Volkswagen?

People love to say that BYD came from nowhere. That it just appeared one morning, kicked in the door, and suddenly everybody from Volkswagen to Tesla had to look over their shoulder. But revolutions never happen overnight.

There is always a long line of small decisions. A lot of work in silence. A lot of strange bets that look stupid when they were made, and genius fifteen years later. And that is really the story of BYD. Not a car company that became good at batteries, but a battery company that looked at the car industry. Because when the world moved from combustion engines to electric vehicles, the heart of the car moved too.

In the old world, the engine was the masterpiece. The fuel tank is a commodity. But in the EV world, it is the other way around. The motor is almost boring. Powerful, yes, but not the magic. The magic is the battery. The range, the safety, the price, the performance, the whole business case sits inside that battery. And BYD understood that very early.

The Guy who started with Batteries

The story starts with Wang Chuanfu. He was not born into some giant industrial empire. He borrowed money from an uncle and started making rechargeable batteries. Not very glamorous. No shiny car launch. No dramatic concept vehicle with smoke machines and music. Just batteries.

But that was the platform. BYD became strong in lithium-ion batteries, made money, went to the stock market, and built up the kind of industrial knowledge that is extremely hard to copy. You do not learn batteries from a PowerPoint. You learn batteries by producing them, failing, improving, scaling, and doing it again.

Then came the moment that looked completely insane. Wang Chuanfu took all the money and bought a carmaker. A state-owned carmaker. And the market did not exactly stand up and applaud. The share price took a beating. People thought, why on earth would a battery guy buy a car company?

Picture that. A man without a driving license decides to enter one of the most competitive industries in the world. People laughed. They warned him. They said it was stupid. How can you make money on cars? Well, that was the wrong question. The right question was: what happens when the car becomes a battery on wheels?

Building the Car around the Battery

Traditional carmakers came from the engine. That was their pride. Their engineering culture. Their identity. The sound, the gearbox, the tolerances, the mechanical magic. BYD came from the other direction. It started with the battery and built the car around it. That sounds simple, but it is a huge difference. If the battery is the most important part of the electric car, then the company that truly understands batteries has a completely different starting point. It is not outsourcing the product’s soul. It embodies the product’s soul.

This is where BYD became dangerous. It did not stop at ordinary lithium-ion batteries. It pushed into lithium iron phosphate batteries, cheaper and safer, and then packaged them in blades.

And this is where history becomes funny. Elon Musk once laughed at BYD. And then, later, Tesla bought batteries from BYD. In this industry, they turn very fast.

The Three Cornerstones of the Machine

The first cornerstone is vertical integration. BYD does almost everything itself. Batteries, semiconductors, subsystems, castings, windscreens, shipping. It is not just assembling parts from suppliers and hoping the world stays calm. It controls massive parts of the chain.

And in a world full of supply chain shocks, that matters. When semiconductor shortages hit, other companies stop. When cable assemblies from Ukraine become a problem, other companies stop. When shipping capacity gets tight, other companies struggle. BYD keeps moving.

You can argue that vertical integration is not always the most cost-efficient model. Maybe. But it gives control. And it keeps the margin inside the company. From raw material to finished car, BYD owns more of the journey than almost anyone else.

The second cornerstone is the boring option: hybrids. In Europe or Norway, we talk a lot about full battery electric cars because charging infrastructure is good enough. You can charge at home, on the highway, in the city, everywhere.

But the world is not Stockholm. In many countries, charging infrastructure is weak outside big cities. And even in China, hundreds of millions of people do not live in the biggest urban centers. So, BYD understood the user pattern. People wanted electrification, but they also wanted the safety of an internal combustion engine when charging was not available.

So BYD went big on hybrids. Not very sexy. Not the cleanest story for an EV purist. But commercially? Very smart.

The third cornerstone is battery technology. BYD knew batteries long before it knew cars. That is the big difference. Other carmakers are now desperately trying to understand battery supply, chemistry, manufacturing, and cost. BYD has lived inside that world for decades.

When most of an EV’s value lies in its battery, that matters more than brand history.

Government Support and the Bigger Plan

Then there is the fourth cornerstone, and this one is impossible to ignore.

The Chinese state. BYD did not grow in a vacuum. It grew inside a system where the government had a clear industrial strategy. Grants, subsidies, land, loans, city contracts, bus contracts, taxi contracts, buyer incentives. All of that helped. And not just a little. When you get public support, when state-owned banks provide favorable financing, when local governments buy buses and taxis, you get scale. And once you get scale, prices go down, production improves, confidence rises, and the flywheel starts spinning.

A strong company, with smart decisions, inside a system that wanted exactly this outcome. China wanted to dominate the EV industry. BYD became one of the vehicles for that ambition. Literally and industrially.

Is BYD the new Toyota or Volkswagen?

Is BYD becoming the new Toyota? The company that makes the reliable, affordable, global car for the next era? Maybe. Because Toyota understood manufacturing, cost, reliability, and scale. BYD understands batteries, integration, affordability, and speed. It also understands that not every customer wants a luxury spaceship. Many people just want a car that works, looks decent, feels modern, and does not cost a yearly salary.

In that sense, BYD may not be the new Tesla. It may be something more dangerous. The better Volkswagen. A company building cars for normal people to buy.

BYD also opened the door for other companies. It made Chinese cars acceptable in markets where people once laughed at them. It showed that a Chinese brand can enter, scale, and compete not only on price, but on technology and product. That is the shift.

Europe, being number one in carmaking, is no longer guaranteed. Maybe it is already gone. The German badge still means something, yes. But the customer is more practical now. If one car costs half as much, has good software, good range, modern design, and enough quality, then the old badge has to work much harder.