Part IThe Story
In 2011, a Bloomberg anchor named Betty Liu asked Elon Musk about an up-and-coming Chinese company that was, as she put it, "ramping up production of their electric vehicles." Warren Buffett, she noted, owned about 10 percent of it. Musk laughed. Liu pressed him: "Why do you laugh? BYD is trying to compete. Why do you laugh?" Musk answered with a question that would turn out, over the following dozen years, to be one of the more expensive rhetorical questions in the history of the automobile.
— Elon Musk, Bloomberg interview with Betty Liu, 2011Have you seen their car?
She had. She started to say so ("In fact, at the Berkshire Hathaway today, I saw...") and the sentence dissolved into his laughter. The cars, Musk went on to say, were unattractive and not competitive with Tesla. On the narrow question he was right. The car in question was a stubby, oddly proportioned thing from a company whose first sedan had been described, not unkindly, as a copy of the Toyota Corolla. Its plug-in hybrid had sold about 100 units. Its American ambitions were confined to fleet sales and press releases. Its slogan, "Build Your Dreams," was a backronym invented for the Detroit auto show because the letters B, Y, and D had originally meant nothing at all.
In the fourth quarter of 2023, that company sold 526,409 battery-electric cars. Tesla delivered 484,507. In 2025 BYD overtook Tesla for the full year as the world's largest seller of electric cars, and passed the Ford Motor Company in total vehicles sold, a sentence that would have been considered satire in 2011 and is now a line in a Bloomberg headline. Musk, as NPR's Indicator put it with admirable restraint, "now takes the company very seriously."
The laugh was about a car. The man behind the car was harder to laugh at, mostly because almost nobody in the West had looked at him. Wang Chuanfu was 45 that year: a metallurgical chemist from one of the poorest provinces in China, a son of farmers, an orphan raised by his older siblings, a man whose company employee card bore the number 00001. Fourteen years earlier, as part of his research into electric vehicles, he had bought a Beijing-built electric station wagon assembled from an imported knock-down kit of an Australian Holden Commodore. It ran on golf-cart batteries, had a range of about 100 kilometers, and topped out at 92 kilometers per hour. He later bought a second one and had it converted into a hybrid. The company preserved a photograph of an early experimental vehicle labeled, with the flat literalism of an engineer's notebook, "BYD-001 (Test)."
Musk had asked whether Liu had seen the car. Nobody asked whether anyone had seen the man.
By the Numbers
The Empire Built on a Cousin's Loan
CN¥250,000Loan from cousin Lu Xiangyang that started BYD
00001Wang Chuanfu's BYD employee number
4,602,436Vehicles sold by BYD Auto in 2025
CN¥804BBYD revenue in 2025 (approx. US$113B)
869,600Employees, December 2025
3,890%Berkshire Hathaway's return over 17 years
16.9%Wang's ownership stake in BYD Company
Eight Children and a Periodic Table
The English-language record of Wang Chuanfu's childhood is thin to the point of transparency. What survives is a handful of facts, and they are the kind that do most of the work themselves. He was born on April 8, 1966, in Wuwei County, Anhui, a province that for most of the twentieth century supplied China's coastal cities with migrant labor and its literature with images of rural hardship. He was one of eight children in a poor farming family. His parents died while he was still young, and his elder brother and sister raised him through high school.
That is nearly all. There are no anecdotes of precocious tinkering in the official English sources, no smuggled radio sets, no fortunate teacher. There is a gap, and then there is a chemist.
He went to the Central South Industrial University in Changsha, now Central South University, and studied metallurgical physical chemistry, the science of how metals behave when you heat them, dissolve them, plate them, and ask them to store electrons. He graduated in 1987. His alma mater's news portal later published a retrospective under the headline "China's richest man Wang Chuanfu: four years of laughter and tears in Changsha," a phrase that would sit comfortably over almost any undergraduate life and that, in his case, would later turn out to be prophetic about a city rather than a person. Changsha would come back into his story more than once: as the site of a bus company he bought in 2009, of a car plant that opened in 2012, and of a factory whose neighbors, in 2022, would claim it gave their children nosebleeds.
In 1990 he earned a master's degree from the Beijing Non-Ferrous Metal General Research Institute, a state research organization, and stayed on as a vice supervisor. In 1993 the institute established a battery company in Shenzhen, and because of his academic background Wang was appointed its general manager. He was 27 years old and running a factory in the city that Deng Xiaoping had designated, a little more than a decade earlier, as a laboratory for the market economy. It was the right laboratory for a chemist.
What he saw there was a gap in the Japanese supply chain. Japan's battery makers, the most sophisticated in the world, were moving away from nickel-cadmium cells toward higher-value nickel-metal hydride and lithium-ion chemistries. The nickel-cadmium market was not dying; it was being abandoned by its best producers, which is a different thing and, for a person without capital, a much better one. Mobile phones were coming. Somebody was going to make their batteries.
He left the institute's company in 1995. The capital came from family. His cousin, Lu Xiangyang, lent him CN¥250,000 and moved with him to Shenzhen to start the company. Lu is one of those figures who appears in corporate histories mostly as a number. He became BYD's co-founder and vice chairman, and he still holds 13.0 percent of the company. The arithmetic of his loan, a quarter of a million yuan to a younger relative with a chemistry degree and an idea about Japanese batteries, belongs among the more remarkable family favors in modern capitalism. It also rhymes with what the record says about Wang's childhood. He was raised by a brother and a sister, and his company was financed by a cousin. In the beginning, the institutions in his life were all relatives.
On November 18, 1994, Wang gathered a team of 20 people in Buji Town, in Shenzhen's Longgang District. The company was formally registered on February 10, 1995, as Shenzhen BYD Battery Company Limited, with CN¥2.5 million in registered capital. Its founder took employee number 00001.
The company's name, as Wang has told it, was chosen almost at random. The firm was originally called Yadi Electronics, after Yadi Road in Shenzhen's Dapeng district, where it was once based. When it came time to register, the character Bi was added to avoid duplicating an existing name and, according to Wang, to give the company an alphabetical advantage at trade shows. Biyadi. BYD. A name whose only intended meaning was its position in an alphabetized list of exhibitors, so that buyers walking the aisles would reach it first.
The Hands That Replaced the Robots
The Japanese battery makers ran their lines the way the best manufacturers of the era were supposed to: capital-intensive, highly automated, in climate-controlled dry rooms where the humidity was kept low enough to protect sensitive chemistries. It was beautiful engineering and it was expensive. A new entrant would have needed tens of millions of dollars in equipment just to match it. Wang had a cousin's loan.
So he took the line apart, conceptually, and rebuilt it with people. Where Japanese factories used robots, BYD used workers, and the machinery it did need, it increasingly built itself. The company found ways to make mobile-phone batteries at room temperature rather than in expensive heated dry rooms, a trick The Economist would later cite in a 2010 special report on "frugal innovation" in emerging markets. BYD also developed process refinements of its own, including a foamed-nickel roller-welding technique that improved electrode performance. The result was a cost structure that, by one academic analysis, ran five or six times lower per unit than its Japanese competitors.
It is tempting to describe this as cheap labor, and it was partly that, since BYD has openly leveraged China's low labor costs. But the more interesting move was conceptual. Wang treated the capital intensity of his rivals as a choice rather than a law, and he understood that a factory designed around expensive machines could be redesigned around inexpensive hands without giving up much in quality, so long as the person doing the redesigning understood the chemistry well enough to know which steps actually required the machine. A metallurgist knows where the tolerances live.
The customers came in an order that reads like a list of future victims. In 1996 BYD won an order from Sanyo, the Japanese giant whose market it was quietly eating. In 1997, as the Asian financial crisis gutted the region's currencies and sent multinationals looking for cheaper suppliers, Philips, Panasonic, and Motorola became major clients. In 1998 the company opened its first branch outside China, BYD Europe B.V., in the Netherlands. In 1999 came BYD America Corporation. In 2000 it opened its first industrial park, in Kuichong, Shenzhen.
By July 2002 BYD was the world's largest maker of nickel-cadmium batteries, responsible for 65 percent of global production. It had passed Sanyo. In September of that year Sanyo sued, alleging that BYD had infringed its patents on lithium-ion cell construction and battery-pack structure. Sony had tried something similar. Neither patent claim succeeded.
If you owned a Nokia 3310 at the turn of the millennium, the phone of legendary weeklong battery life, there was a reasonable chance you were carrying BYD's work in your pocket. "More than likely that was a BYD battery inside," said Elliot Richards, the China correspondent for the YouTube channel Fully Charged, on NPR in 2024. The company also moved up the value chain into phone components and assembly. By 2011 its electronics subsidiary counted Nokia, Motorola, and Samsung as customers. By 2021, Wang said, it was manufacturing most of Huawei's phones. Since 2020 it has been an assembler of Apple's iPads.
On July 31, 2002, BYD went public on the Hong Kong Stock Exchange and raised HK$1.6 billion. The prospectus announced a sensible ambition: to become the world's second-largest battery company. The investors who bought in on that basis had no way of knowing that, within six months, their battery company would buy a car factory.
A License to Build Cars, and a Car Nobody Wanted
In January 2003 BYD paid HK$269 million for a 77 percent stake in Xi'an Qinchuan Automobile, a small and struggling automaker owned by Norinco, the state-owned defense conglomerate. Shareholders were furious. The acquisition had not been disclosed in the prospectus, and a battery maker with a dominant position in a profitable niche had just bought its way into one of the most capital-hungry, brutally competitive industries on earth, in a country already crowded with automakers backed by provincial governments and foreign joint-venture partners.
What Wang had actually bought was not a factory, or not mainly. Qinchuan had been making cars since 1987, and with that history came an automobile production license, a document that was difficult for a private company to obtain in China at the time. The plant itself was too small, and BYD soon had to build a new one in the Xi'an Development Zone. The car Qinchuan was making, a small hatchback called the QCJ7181 Flyer, was rebadged as the BYD Flyer. The real asset was the permission.
The stated rationale was batteries. Wang intended to develop battery-powered electric vehicles using BYD's expertise in cells, and he had been circling the idea since 1997, when he bought that Holden-bodied electric wagon from Beijing Second Auto Works. At the 2004 Beijing Auto Show, alongside a row of petrol concept cars, BYD showed the Flyer EF3, an electric sedan meant to enter production in 2005 as a Shenzhen taxi. It never did. At the 2006 show it unveiled the F3e, with a claimed electric range of more than 300 kilometers. That plan died too: in December 2010 a BYD Auto general manager confirmed that the F3e had been cancelled for lack of charging infrastructure. The electric future was always a few years away. In the meantime the company needed to sell cars that people would buy.
Its first attempt was codenamed 316. Dealers rejected it because of its styling. BYD scrapped the car before it ever reached the market and wrote off CN¥100 million in research and development. Then Wang personally destroyed it. Accounts of what exactly he broke differ: a prototype in one telling, a scale model in NPR's. A Sohu Auto headline from April 2006 compressed the episode into a single line, "Wang Chuanfu reluctantly smashed the BYD 316, went all-in on the F3." What the accounts agree on is the hands, and the hands belonged to the chairman.
There is something almost liturgical in that destruction. A hundred million yuan, the company's first car, and the founder breaking it himself, as though a sunk cost could only truly be sunk by the person who had sunk it. The gesture was also a confession. The car had been rejected for how it looked, and the company's founder was a chemist, not a stylist. Musk's question was being asked, in effect, eight years before Musk asked it.
The F3 entered production on April 16, 2005, priced at CN¥73,000, roughly US$10,000. It resembled the Toyota Corolla closely enough that critics called it a copycat, and it cost less. Buyers did not seem to mind the resemblance: BYD sold more than 63,000 in the first year. The 100,000th F3 rolled off the line on June 18, 2007, twenty months after production began. In August 2007 came the larger F6, modeled on the Honda Accord. The early cars used older Mitsubishi engines built in China, and within a few years BYD was making its own engines by modifying the Mitsubishi designs. In 2009 the F3 was the best-selling sedan in China, with more than 291,000 sold. The car stayed in production, through facelifts and a "Classic" revival edition, until late 2021, sixteen years in all.
The automotive division grew from 10 percent of BYD's revenue in 2005 to 25 percent in 2006. In the first half of 2009 it passed 55 percent, the first time cars had brought in more than half the money at a company that, seven years earlier, had told investors it wanted to be the world's second-largest battery maker.
And then, almost at once, the dealers began to leave. In 2010 BYD dealerships withdrew in large numbers from major Chinese cities, a result of expanding too quickly, a thin model range, and internal competition among the company's own sales channels. BYD had pushed production capacity ahead of quality. It cut its annual target from 800,000 vehicles to 600,000 and still fell short, producing about 517,000. For the next three years the company worked on quality, dealer management, and brand. The founder who had once smashed a car for its looks now had a whole dealer network telling him the same thing about the cars he had kept.
Sixty, Thirty, Five, Five
Wang has never pretended that BYD invented its way to the top. He described the company's method with unusual frankness, and the description is worth reading slowly:
"In developing a new product, 60% comes from existing literature, 30% from sample analysis, and another 5% from raw materials and other external factors. Our own original research accounts for only about 5%."
Sixty, thirty, five, five. Read one way, it is an admission. Read another way, it is a theory of how a latecomer catches up, and the second reading is probably the one he intended. On this view, the world's accumulated engineering knowledge is a raw material like nickel or lithium. It can be bought cheaply, refined, and fed into a production process. Patents, as he once put it, are static. They describe a solution at a moment in time, and a sufficiently skilled engineer can design around them with minor changes. Wang made such changes often.
The automotive press noticed. The BYD F0 was called "a clear copy" of the Toyota Aygo. The S8 convertible borrowed the general shape of the Mercedes-Benz SL-Class, with a front end "almost identical" to the Mercedes CLK and a rear that recalled the Renault Mégane CC. BYD's original car logo, a blue-and-white roundel that the company said represented sky and clouds, drew criticism for resembling BMW's. Wang's response was that the company used only "non-patented technologies." In 2009 the American consulate general in Guangzhou advised Washington that BYD's approach was one of "copying and then modifying car designs," and noted, with something that reads like grudging professional respect, that the modifications were sufficient to satisfy Chinese courts that no patents had been infringed.
The line between learning and taking was tested more seriously in electronics. In June 2006, affiliates of Foxconn, the Taiwanese contract manufacturer, sued BYD in Shenzhen, alleging that former employees who had joined BYD's handset design department had brought trade secrets with them. Foxconn pointed out that more than 400 of its former employees had moved to BYD, including senior technicians and managers whom Foxconn had trained in Europe at its own expense. A court-appointed forensic center found that 68 of 116 disputed files contained non-public information. In 2008 the Shenzhen Bao'an People's Court found BYD liable for trade-secret infringement. Foxconn then sought criminal prosecution. On March 20, 2008, a former BYD executive director and vice president was arrested, and two former Foxconn employees were sentenced to one year and four months and to four years in prison. BYD counterclaimed in Hong Kong, alleging defamation, intimidation, and bribery of officials, and denied all wrongdoing. It accused Foxconn of coercing former employees into false confessions. In 2012 Hong Kong's High Court rejected Foxconn's appeals while also questioning BYD's counterclaims. Nobody walked away clean.
Here the story requires the reporter to hold two ideas at once. The first is that BYD's early years involved a great deal of imitation, some of it close enough to the line that courts were asked to rule on it, and at least once a court found it had crossed the line. The second is that the company which once built its products on 5 percent original research went on to file more than 13,000 patents between 2003 and 2023, roughly sixteen times as many as Tesla over a comparable period by Nikkei's count. By 2023 it employed 102,000 research and development staff, more than half of them under thirty, and spent CN¥39.91 billion a year on R&D.
Those are not contradictory facts. They are the same fact at different points on a learning curve. The question that matters to a historian of industry is not whether a latecomer copied. Every latecomer copies. The question is whether the copying was a destination or a curriculum. In 2006, with the smashed 316 still fresh in the wreckage pile, nobody could say. The answer would take another fourteen years.
The Partner in Omaha
In September 2008, in the worst month of the global financial crisis, MidAmerican Energy Holdings, a subsidiary of Warren Buffett's Berkshire Hathaway, agreed to pay about US$230 million for 225 million newly issued BYD shares at HK$8 each, or 9.89 percent of the company. It was an odd purchase for a man famous for refusing to invest in technology he did not understand, and Buffett was quick to give the credit away. The idea, he said, belonged to Charlie Munger, Berkshire's vice chairman. Munger, in turn, credited Li Lu, the founder of the Seattle-based asset manager Himalaya Capital, who had introduced him to the company and its founder.
The chain of credit is itself a kind of portrait. Three investors each insisted the discovery belonged to someone else. When Munger spoke about Wang, he did not talk about batteries. He talked about biography: Wang came from a poor family and rose through hard work and talent. Munger called him a "genius" and a "workaholic." Years later he would call the company "a goddamn miracle." In February 2023, nine months before his death, he said BYD was so far ahead of Tesla in China that "it's almost ridiculous."
The market heard the endorsement immediately. BYD's shares soared on news of the deal, and the company's value rose roughly fivefold. By late 2009 Wang's net worth stood at about $5.1 billion, and the Hurun Report named him the richest man in China. It was a title that a former orphan from Wuwei now held because an elderly lawyer in Pasadena had taken a liking to him.
In the same year as the Berkshire deal, Wang set out what Chinese media called the "two firsts": BYD would lead the Chinese car market by 2015 and become the largest carmaker in the world by 2025. Electric vehicles, he said, would be the "stepping stone" that let BYD skip the century of internal-combustion development in which it could never catch the Germans or the Japanese, and carry it into foreign markets, Europe and North America included. An interviewer at Sohu Auto reported his insistence that the goals were "not fabricated out of thin air."
The first-mover evidence was real, and it was also a little thin. In March 2008, at the Geneva Motor Show, BYD introduced the F3DM, the world's first production plug-in hybrid. In January 2009, at the Detroit auto show, it introduced the e6, its first battery-electric car, with a claimed range of 400 kilometers. The e6 went on to a long, quiet career as a taxi in cities around the world. The F3DM had sold about 100 units by 2011. In May 2009 Volkswagen signed a memorandum of understanding to explore hybrid and electric development with BYD. After due diligence, Volkswagen walked away.
In 2010 BYD and Daimler formed a 50-50 joint venture to build electric cars under a new brand, Denza. Its first model was based on an earlier generation of the Mercedes-Benz B-Class, and it sold poorly for years. In 2021 Daimler cut its stake to 10 percent. In September 2024 Mercedes-Benz handed over the rest and left. By then Denza was making some of BYD's most expensive cars, and the vehicle chosen to mark BYD's 10 millionth new-energy car was a Denza Z9.
In March 2011, two months before Musk's laugh, Reuters ran a special report under the headline "Warren Buffett's China car deal could backfire." It was a reasonable argument at the time. Berkshire held the stake for seventeen years. It began trimming in 2022 after the share price had risen enormously and exited completely in September 2025, with a return of 3,890 percent.
Eleven Flat Years
From 2009 to 2020, the automobile business stood still. Annual sales ran 448,458 in 2009, 521,761 in 2010, 454,676 in 2011, 514,188 in 2013, 451,868 in 2015, 528,298 in 2018, and 431,447 in 2020. For eleven years the company hovered between roughly 400,000 and 500,000 vehicles while other Chinese automakers grew around it. A list of those figures reads like the vital signs of a patient who is neither dying nor getting better.
Inside that long plateau the company built things that would matter later and things that would embarrass it. In July 2009 it bought Hunan Midea Coach, a bus maker in Changsha, invested a reported CN¥3 billion, and started building battery-electric buses under a government pilot program, including a deal to supply 1,000 K9 buses to Hunan. The buses traveled abroad well before the cars did. BYD opened a bus plant in Lancaster, California, in 2013. It delivered K9s to a Kyoto operator called Princess Line in 2015, becoming the first Chinese automaker to sell in Japan, and by 2022 held 70 percent of Japan's electric-bus market. London's first all-electric double-decker was built in partnership with Alexander Dennis. By 2023 BYD had delivered more than 100,000 electric buses worldwide.
Some of them were bad. A 2018 Los Angeles Times investigation found BYD buses in California stalling and falling short of their advertised range. Albuquerque sued over poor welding and malfunctioning doors and brakes, and the case was settled without money changing hands. In the eastern Netherlands, where a transit operator had ordered 259 BYD buses in what was then Europe's largest electric-bus order, drivers reported batteries that showed full on the dashboard and then suddenly emptied, stranding buses mid-route. They reported buses that pulled constantly to the right, and seats so poorly positioned that drivers developed physical pain. "Yesterday I drove in pain all day again," one told de Volkskrant. When the operator that inherited the fleet ordered replacements from Dutch suppliers, a regional paper noted that the order went, "fortunately," not to BYD.
In 2013 BYD launched the Qin, a plug-in hybrid that briefly became the best-selling plug-in electric vehicle of early 2014. It was the first of what became the Dynasty series, named after Chinese imperial dynasties: Qin, Han, Tang, Song, Yuan. In 2016 the company unveiled a monorail called SkyRail. It was diversifying, sideways, into anything with a battery or a wheel.
It was also, increasingly, living on the state. China's subsidies for new-energy vehicles were generous, and BYD was their largest beneficiary. In 2016 it received about US$1 billion in subsidies, more than its entire net profit that year, equal to over 20 percent of its US$5 billion in new-energy vehicle revenue. Rhodium Group estimates BYD received about US$4.3 billion in state support between 2015 and 2020, and a separate study reported by Bloomberg put 2020 alone at the equivalent of €2.1 billion. The subsidy system also bred scandal across the industry. In 2016 a dealership owner in Nanjing left a suicide note claiming BYD had collected subsidies for 600 electric buses it never produced, with only a few dozen delivered to the city. The Finance Ministry's subsequent crackdown fined five manufacturers for fraudulently claiming more than CN¥1 billion in subsidies. BYD was not among them.
Then Beijing began cutting back. From 2017 through 2019 subsidy reductions hit BYD's sales and margins, and net profit fell three years in a row: CN¥5.0 billion in 2016, 4.0 billion in 2017, 2.7 billion in 2018, and 1.6 billion in 2019. Wang later called it the company's "darkest moment." At that point, he said, the company had only one goal, which was "to survive."
What he did in the darkness is the crux of the whole biography. In 2019, with profit at its lowest in years, BYD spent CN¥8.4 billion on research and development, more than five times what it earned. A company trying merely to survive does not usually do that. A company that believes the survival in question is the future's, not this quarter's, sometimes does.
In September 2023, recalling those years in a speech, Wang choked up several times. A Yicai headline carried the line: "I almost couldn't go on." He was, by then, one of the richest men in Asia. The tears were for 2019.
— Wang Chuanfu, recalling the subsidy-cut years, September 2023 (as reported by Yicai)I almost couldn't go on.
The Problem of the Face
Musk's question was not about batteries. It was about looks, and looks were the one thing a chemist could not engineer by reading the literature. NPR called styling BYD's Achilles' heel. Dealers had rejected the 316 for it. Critics had mocked the F0 and S8 for borrowing their looks from other companies. In 2016 the company finally did what it had resisted doing for thirteen years. It went outside for taste.
In November 2016 BYD hired Wolfgang Egger as head of design. Egger is a German designer who had spent his career at Alfa Romeo, Audi, and SEAT; NPR adds Lamborghini to the list. His résumé was a map of exactly the European auto culture that BYD's early cars had been accused of photocopying. Now one of that culture's practitioners would be drawing for BYD. His first design, the Dynasty concept, appeared at the 2017 Shanghai Auto Show and previewed the second-generation Tang SUV. In 2019 the company opened a 12,600-square-meter global design center in Shenzhen, led by European designers, with a staff of 200 that grew to 600 by 2023. Its clay-modeling studio could mill a full-scale model in five days, and automated cutting cut design-modification times from several weeks to under 24 hours. The first concept from the team, the E-Seed GT, drew its lines from the traditional Chinese dragon.
The same December that Egger's hiring was announced, BYD signed Leonardo DiCaprio as global ambassador for its new-energy vehicles. The pairing (a European designer and an American movie star, both enlisted to make a Shenzhen battery company's cars look like something people wanted) says something about how BYD saw its problem. It was not a quality problem anymore, or not only one. It was a problem of being seen.
The company's own instincts about how to be seen were sometimes wonderful and sometimes alarming. Starting with the 2017 Tang, BYD replaced the oval logo on its tailgates with the words BUILD YOUR DREAMS spelled across the back in capital letters. NPR's hosts called it "the live, laugh, love of vehicles." In late 2023, after widespread criticism, the company dropped the badging in favor of the three letters. Inside the cars, BYD installed karaoke systems, a popular feature in China, sold with a dedicated microphone. On some models it added rubber guitar strings to the door panels, which owners could pluck to play, among other things, "Smoke on the Water." Elliot Richards was asked his opinion of the strings on air. "You can be honest," the host told him. "I think they're rubbish," Richards said.
The kitsch and the craft sit side by side, and that is part of the point. The design center refined the shape of the cars, but the cars themselves still had the personality of their maker, playful and literal and unembarrassed. When BYD launched its luxury brand in January 2023, priced above CN¥1 million to compete with Europe's most expensive marques, it named the brand Yangwang, which means "to gaze up" or "to look up." Its first model, the U8, was an amphibious off-roader that BYD said could float for about 30 minutes. Its second, the U9, was an electric supercar. A U9 was BYD's 9 millionth new-energy vehicle, built on September 25, 2024.
Have you seen their car? By 2023 the company's answer was a brand whose very name told you to look up.
A Battery Shaped Like a Blade
Every great industrial reversal has an object at its center, and BYD's is a long, thin cell of lithium iron phosphate.
By the late 2010s much of the battery industry was moving away from lithium iron phosphate, or LFP. The chemistry was cheap, stable, and long-lived, but its energy density lagged behind the nickel-rich chemistries favored by Western and Korean producers, and range was the metric that sold cars. LFP looked like a chemistry for buses and budget products, which was more or less where BYD had been using it.
In 2020 BYD introduced the Blade battery. It was still LFP, but the cells were long and flat, packed so densely into the battery pack that the traditional module layer could be eliminated, recovering much of the density penalty. BYD's marketing focused on a demonstration that was half science and half theater. Engineers drove a nail through the cell. The Blade, BYD said, gave off no smoke and no fire, and its surface reached only 30 to 60 degrees Celsius. A conventional ternary lithium cell in the same test heated past 500 degrees and caught fire. The first car to carry it was the Han, a large sedan that went on sale in July 2020, its name taken from the dynasty that Chinese people still use as the name of their ethnicity. From April 2021, every battery-electric BYD came with a Blade.
There is a quiet rhyme here with 1995. Then, the Japanese leaders were walking away from nickel-cadmium, and Wang picked up what they left. Twenty-five years later, much of the industry was walking away from LFP, and he picked up that too, and rebuilt it.
In March 2020 the company spun its components divisions into a set of subsidiaries under a new brand, FinDreams, meant to sell parts to other automakers. The Chinese name, Fudi, comes from the Classic of Poetry, and the company explained it as meaning honesty, trustworthiness, steadfastness, and diligence. This was a company that the Shenzhen courts had found liable for trade-secret infringement twelve years before, so the choice of name invites an eyebrow. The customer list answers it in its own way. Tesla, Toyota, Kia, Ford, Suzuki, Xiaomi, XPeng, and Nio have all used FinDreams batteries. In 2024 the subsidiary was the world's second-largest maker of electric-vehicle batteries after CATL, with 17 percent of the market. From the first quarter of 2025 it was scheduled to supply 20 percent of the cells for Tesla's Megapack energy-storage systems in Shanghai. The company once accused of copying was now selling its components to the firm whose founder had laughed at it.
The plug-in hybrids were rebuilt at the same time. In January 2021 BYD replaced its older dual-mode systems with DM-i, a series-parallel hybrid built around a petrol engine that BYD claimed reached 43 percent brake thermal efficiency, the highest of any production petrol engine. The fifth generation, launched in May 2024, claimed 46.06 percent efficiency and a combined range of 2,100 kilometers. There is an irony in this, too. The man who had promised to leapfrog the combustion engine produced, along the way, what his company claims is the most efficient petrol engine ever put into production. In 2024, plug-in hybrids made up about 60 percent of BYD's wholesale sales.
— Elliot Richards, China correspondent for the Fully Charged Show, on NPR's The Indicator, January 2024They thought, well, we're not masters at making petrol engines. The Germans, the Japanese do that much better than us. They've been doing it for 100 years. We're never really going to catch them up.
Then demand arrived, and BYD was ready for it in a way almost nobody else was. Electric and plug-in cars rose from 5.8 percent of Chinese vehicle sales in 2020 to 27.5 percent in 2022. BYD's sales went from 431,447 in 2020 to 749,325 in 2021, 1,881,669 in 2022, 3,024,417 in 2023, and 4,272,145 in 2024, a tenfold increase in four years. The workforce grew from 288,000 in 2021 to 570,000 in 2022, after a single year in which BYD hired 280,000 people, and to 968,900 by December 2024. It became the largest private-sector employer in China, behind only a few state-owned giants such as China National Petroleum, State Grid, and China Post. In March 2022 BYD stopped making cars powered only by petrol. In the first half of 2022 it outsold Tesla in plug-in vehicles. In 2023 it became China's best-selling car brand, ahead of Volkswagen, which had held that title since the liberalization of the Chinese auto industry.
The cost advantage was structural, and it went deep. When UBS tore down a BYD Seal, it found 75 percent of the components were made in-house, against 46 percent for a China-built Tesla Model 3, and estimated the Seal's gross margin at 16 percent versus the Model 3's 14. BYD makes its own batteries, motors, electronic controls, molds, and production equipment. It acquired mineral rights to 852 hectares in Coronel Murta, in the part of Brazil's Jequitinhonha Valley known as "Lithium Valley." "So BYD not only makes its own lithium car batteries," one NPR host explained, "but it owns its own lithium mines." "It's so vertical," his co-host replied, "it's going underground."
In April 2023 BYD released the Seagull, a small five-door hatchback priced below CN¥90,000, or about US$12,000. It built 200,000 of them by November 29, after seven months on sale. In 2025 the Seagull, sold abroad as the Dolphin Mini, Dolphin Surf, and Atto 1, was BYD's best-selling car worldwide, with 529,537 sold.
Together, We Are Chinese Autos
In August 2023, at a ceremony marking BYD's 5 millionth new-energy vehicle, Wang wept on stage. The tech outlet 36Kr put it plainly in a headline: "BYD sold 5 million vehicles, Wang Chuanfu cried." The words he spoke that day were not the words of a company founder, or not only. The Chinese market was in a vicious price war, and Wang called on the country's automakers to stop tearing each other apart, to unite against foreign rivals and, as Reuters translated it, to "demolish the old." He called it "an emotional need for the 1.4 billion Chinese people to see a Chinese brand becoming global," and he launched a campaign under the slogan Together, we are Chinese autos. The chief executives of Nio and Li Auto welcomed it.
It is worth sitting with the arc of that sentence for a moment. A company whose name was picked to come early in an alphabetized list, whose founder said 5 percent of its products came from original research, whose first logo was mocked as a BMW knockoff, was now presenting itself as the vessel of a national emotion. The orphan had become a patriarch.
The politics were never hidden. Wang is a member of the Chinese Communist Party. In February 2025, when Xi Jinping held a rare meeting with technology leaders at the Great Hall of the People, Wang sat directly in front of the General Secretary, alongside Huawei's Ren Zhengfei, in seats that honored their companies as national champions. Huawei is the company whose phones BYD had once assembled.
Being a national champion means being a national target. In 2018 the United States imposed a 25 percent tariff on Chinese cars, which President Biden kept, and the Inflation Reduction Act's $7,500 consumer credit applies only to vehicles meeting North American content rules. In 2020 BYD sued Vice Media for defamation over a story linking it to companies accused of using forced Uyghur labor, and sued the Alliance for American Manufacturing over similar claims. Both cases were dismissed, and the Supreme Court declined to hear either. Congress barred the Pentagon from buying BYD batteries. In June 2026 the Defense Department added BYD to its list of "Chinese military companies." In September 2023 the European Commission opened an anti-subsidy investigation, and from July 4, 2024, BYD cars imported into the European Union faced an extra 17.4 percent duty on top of the existing 15 percent. India blocked a planned $1 billion car investment in July 2023, citing security concerns. Israel's defense ministry restricted certain BYD vehicles over data concerns. Taiwan blocked Thai-built BYDs on security grounds.
BYD's response to the tariffs was to go around them, often with its founder doing the signing personally. On July 4, 2024, it opened its first wholly owned plant outside China, in Rayong, Thailand, on the same day the company built its 8 millionth new-energy vehicle, a Thai-built Dolphin. On July 8, Wang himself signed a $1 billion agreement for a factory in Turkey, which sits inside a customs union with the EU. A passenger-car plant was built in Szeged, Hungary. Another rose in Camaçari, Brazil, in a former Ford factory. BYD built its own ocean fleet as well. The first car carrier, BYD Explorer No. 1, was delivered on January 9, 2024. By September 2025 the fleet numbered eight ships with capacity for more than a million vehicles a year, most of them named for Chinese cities: Shenzhen, Xi'an, Changsha, Changzhou, Zhengzhou, Jinan, and Hefei, the capital of the province where Wang was born, home to BYD's largest plant, with capacity for 1.32 million cars a year.
The tariffs also showed something the company preferred not to emphasize. According to Rhodium Group, BYD sells cars in Europe at a 92 to 112 percent markup over its Chinese prices, earning about €14,300 on each Seal U sold in the EU against roughly €1,300 at home. Reuters found the Atto 3 priced at $19,283 in China and $42,789 in Germany, where it was still competitive. The cheapest cars in the world were cheap mostly in China.
The expansion carried human costs, and they were documented. In December 2024 Brazilian labor authorities found 163 Chinese nationals building the Camaçari plant in what they called "slavery-like conditions" and later described them as victims of human trafficking. The contractor, Jinjiang Group, blamed "translation errors." BYD's public-relations chief, Li Yunfei, spoke of efforts by "foreign forces" to damage Chinese brands. Brazil suspended temporary work visas for BYD, and prosecutors sued in May 2025. China Labor Watch reported workers at the Hungarian site working every day of the week, often in shifts longer than twelve hours, with part of their wages withheld. In China in 2021, a 36-year-old BYD employee died suddenly in his rented home. His relatives blamed overtime work. No autopsy was performed, and BYD paid the family CN¥200,000. In October 2025 Wang toured the Camaçari plant with Brazil's president, Luiz Inácio Lula da Silva, and Stella Li.
Stella Li (Li Ke, in the company's filings) is BYD's executive vice president and the person most responsible for its expansion abroad, as president of BYD Americas, Europe, the Middle East, and Africa. In 2025 she was named World Car Person of the Year. In February 2024 she said BYD was "not planning to come to the US," and she set a target of selling half the company's output outside China, which a Bloomberg Intelligence analyst thought unlikely before 2030. In the first quarter of 2026 the overseas share reached about 46 percent. It got there partly because sales at home were falling.
The domestic market turned on the company it had made. BYD led the price war it had once asked others to end: Champion Editions in 2023, Honor Editions in 2024. When regulators advised it to stop cutting prices, it added its "God's Eye" driver-assistance system as standard on 21 models, including the Seagull, on February 10, 2025, offering more without charging more. In May 2025 it cut prices again, on 22 models and by as much as 34 percent, bringing the Seagull down to CN¥55,800. Great Wall Motor's chairman, Wei Jianjun, compared the industry's situation to the property developer Evergrande before its collapse. The Ministry of Commerce summoned automakers over "zero-mileage" used cars, new vehicles registered and resold to meet sales targets. In Thailand, a buyer complained of "psychological distress" after a sudden price cut, and Wang, meeting Prime Minister Srettha Thavisin on July 5, 2024, promised to fix it. In China, BYD sued bloggers who criticized its products, offered bounties of up to CN¥5 million for evidence of online smear campaigns, and by May 2026 led Chinese automakers in disclosed claims against bloggers, at CN¥6,926,300.
In the second quarter of 2025, BYD's profit fell for the first time in more than three years, by 29.9 percent. In September the company cut its annual sales target from 5.5 million to 4.6 million. Wang gave an explanation that founders rarely give in public: BYD's technological lead was not as strong as it had been in previous years. He promised major technology announcements in 2026. In March 2026 the company unveiled a second-generation Blade battery and "Flash Charging" that could take a compatible car from 10 to 70 percent charge in five minutes, served by stations rated at 1,500 kilowatts. On May 28, 2026, Wang presented the Xuanji A3, a 4-nanometer driver-assistance chip developed entirely by BYD Semiconductor, which the company described as its 567th automotive-grade chip and China's first at that node. The first quarter of 2026 had already shown profit down 55.4 percent and sales down 30 percent. The company was investing out of a downturn again, the same way it had in 2019.
On November 18, 2024, thirty years to the day after Wang gathered 20 people in Buji Town, BYD held a ceremony in Shenzhen to mark its 30th anniversary and its 10 millionth new-energy vehicle, the first automaker in the world to reach that number. He summed up three decades in three phrases: Dare to think, dare to do, dare to persevere. Thirteen months later, on December 18, 2025, the 15 millionth rolled off the line.
The small library of English-language books that has appeared about him lately, such as Wang Chuanfu and the Rise of BYD and The Financial Story of Wang Chuanfu, mostly arrived after 2024. In February 2024 the newsletter Interconnected ran a profile titled "Wang Chuanfu: A Name Everyone in the West Should Know." The man himself, by that account, spends 60 to 70 percent of his time on technology and product development. Even now he is rarely the main subject. The cars are.
Smoke on the Water
In Perth, Western Australia, in 2023, a man named Aaron McDonald was looking to go electric. He wanted a Tesla, but it was a little beyond his family's budget. He took a test drive in a cheaper car from a Chinese brand he had never heard of, a BYD Atto 3. He told NPR he had been reluctant. He worried about whether the company could service the car, and whether it could build a good one. He read up on its track record and its dealer network, and he and his wife bought it.
Was it good? "Yeah, it's fine," he said. "Absolutely nothing to complain about, but it's not a superstar, right? It's not going to blow away all your friends with excitement. It's a, yeah, it's a utility."
The Atto 3 was the second-best-selling electric car in Australia in 2022, behind only the Tesla Model 3. By 2025 Australia was BYD's fifth-largest market, with 52,415 cars sold. It was the country whose Holden Commodore, rebuilt in Beijing in the 1990s and stuffed with golf-cart batteries, Wang had bought in 1997 to study what an electric car could be.
McDonald's car had BUILD YOUR DREAMS across the tail, which he admitted some people found odd. It also had rubber strings on the door panels.
At the end of the NPR segment, after the credits, the producers kept a short exchange recorded in McDonald's family.
"Have you played guitar on the door strings?"
"Yes, one time," says a child.
"Yeah, it's pretty fun. Can you make some music through the doors?"
The child makes a sound like an electric guitar.
"That's some pretty good music."
Part IIThe Playbook
What follows is an attempt to turn Wang Chuanfu's career into principles an operator can use. That carries a risk, because a good deal of his advantage came from his circumstances: China's labor costs, Beijing's industrial policy, a protected home market, and timing no business school can teach. Still, these circumstances were available to hundreds of Chinese founders, and most of their companies are now gone, listed under "Former" in the long Wikipedia index of Chinese automakers. The principles below try to isolate what Wang did with his circumstances that others did not. Several are uncomfortable. All of them come with costs, and the costs are noted.
The principles
- 1.Buy what the leaders are abandoning.
- 2.Treat capital intensity as a choice, not a law.
- 3.Acquire the permission, not the plant.
- 4.Make the world's knowledge your raw material, then graduate.
- 5.Kill your sunk costs with your own hands.
- 6.Own the stack all the way down to the dirt.
- 7.Spend on R&D hardest when the profits are lowest.
- 8.Rent the taste you cannot grow.
- 9.Refuse purity during the transition.
- 10.Set dated, absurd goals, and be willing to arrive late.
- 11.Price for the market you are in, not the market you came from.
- 12.Know the price of becoming a national champion.
B
The Decisions That Built BYD
A timeline of Wang Chuanfu's major bets, from a cousin's loan to the 15 millionth car.
1994
On November 18, Wang gathers 20 people in Buji Town, Shenzhen. BYD is registered on February 10, 1995.
1997
Wang buys a Holden-based electric station wagon running on golf-cart batteries to study EVs.
2002
BYD holds 65% of global NiCd battery production and lists in Hong Kong, raising HK$1.6B.
2003
BYD buys 77% of Xi'an Qinchuan Automobile from Norinco for HK$269M, gaining a car production license.
2005
The F3 enters production at CN¥73,000 after the 316 prototype is scrapped and CN¥100M written off.
2008
BYD unveils the F3DM plug-in hybrid at Geneva. Berkshire invests ~US$230M for 9.89%.
2016
BYD hires Wolfgang Egger as head of design.
2019
Net profit falls to CN¥1.6B, and BYD spends CN¥8.4B on R&D.
2020
The Blade battery launches and FinDreams is spun out.
2022
BYD ends production of petrol-only cars and sells 1.88M vehicles.
2023
BYD becomes China's top brand, ahead of VW, and outsells Tesla in BEVs in Q4.
2025
BYD becomes the world's top EV seller, passes Ford in total sales, and builds its 15 millionth NEV.
2026
BYD launches the second-generation Blade with 5-minute Flash Charging, plus an in-house 4nm driving chip.
Principle 1
Buy what the leaders are abandoning
Wang's two most important bets came twenty-five years apart and had the same structure. In 1995 Japan's battery makers were leaving nickel-cadmium for more valuable chemistries. The market was still there, and its best producers were walking away from it. In 2020 much of the battery industry was leaving lithium iron phosphate for denser nickel-based chemistries, and BYD redesigned the cell architecture into the Blade instead of following them.
Markets abandoned by their leaders are rarely dead. Usually they have been mispriced by people who are ambitious in a different direction. The incumbents' exit leaves behind customers, mature knowledge, and suppliers who need a new buyer. An entrant who can make the "obsolete" product much more cheaply, or redesign it so its old weakness matters less, inherits demand nobody is defending.
The discipline here is technical, not contrarian. Wang did not bet against the trend out of temperament. He understood the chemistry well enough to see that LFP's density problem was partly a packaging problem, and packaging can be engineered.
Tactic: List the product categories that the leaders in your industry are publicly moving away from, and for each one ask whether its weakness is fundamental or is a design problem nobody has bothered to solve.
Principle 2
Treat capital intensity as a choice, not a law
BYD's first competitive advantage was a factory design. The Japanese lines were automated and housed in climate-controlled dry rooms. BYD broke the process into manual steps, built much of its own machinery, and found a way to make phone batteries at room temperature. The result was unit costs reported at five to six times below its rivals'.
This was not simply a matter of cheap labor. Many Chinese factories had cheap labor in the 1990s, and few became world leaders. What mattered was that the founder knew the process well enough to tell which steps truly needed precision equipment and which were automated only because the incumbents could afford it. That knowledge is what lets a newcomer swap capital for labor, or for cleverness, without giving up quality. The same thinking later shaped BYD's in-house production of molds, equipment, and nearly every major component.
The cost is that labor-intensive models scale through headcount, and headcount brings human consequences. BYD hired 280,000 people in 2022 alone. Overtime complaints, a disputed death, and the conditions documented in Brazil and Hungary are the same model seen from the other side.
Tactic: Take your most expensive process step and ask whether its cost reflects physics or the incumbent's balance sheet. Then prototype a version that a well-trained person could do with simpler tools.
Principle 3
Acquire the permission, not the plant
In 2003 BYD paid HK$269 million for a struggling automaker whose factory was too small and whose car, the Flyer, nobody remembers. What it bought was Qinchuan's automobile production license, which was hard for a private company to get at the time, plus a foothold in an industry that would otherwise have taken years of lobbying to enter.
In regulated industries the binding constraint is often permission, not capability. A founder who can build the product but cannot legally sell it is worth less than a mediocre incumbent with a license. Buying a weak company for its regulatory standing, and then replacing nearly everything else, is a well-known move that founders who think of themselves as builders often overlook.
Wang did it against his shareholders' wishes, without having disclosed the plan in his IPO prospectus. That was a real breach of investor trust, and a founder should count it as a cost, not a heroic detail.
Tactic: Map the licenses, certifications, and approvals that gate your target market, and price what it would cost to buy an existing holder instead of earning them from scratch.
Principle 4
Make the world's knowledge your raw material, then graduate
Wang's formula for new products (60 percent from existing literature, 30 percent from sample analysis, 5 percent from raw materials and other external factors, about 5 percent original research) is the most candid statement any major founder has made about catching up. Early BYD cars followed it closely: a Corolla-like F3, an Accord-like F6, and Mitsubishi engines that BYD modified until they were its own.
The principle is not "copy." Most copyists stay copyists. The principle is to treat imitation as a curriculum with an exit. BYD went from a 5 percent original-research formula to more than 13,000 patent filings, 102,000 R&D employees, its own 4-nanometer chip, and battery technology that Tesla buys. Imitation funded the learning, and the learning made imitation unnecessary.
The cost is real. Courts found BYD liable for trade-secret infringement in the Foxconn case, and executives faced criminal consequences. Whatever the competitive logic of fast-following, the line between studying a product and taking someone's secrets has to be held.
⚖
Imitation as Curriculum
How BYD's relationship to outside knowledge changed over two decades.
| Phase | Evidence | Status |
|---|---|---|
| Absorb (2003–2008) | F3 resembles the Corolla, F0 the Aygo, and early cars use Mitsubishi engines. Wang says BYD uses "non-patented technologies." | Imitate |
| Adapt (2008–2015) | Modified Mitsubishi engines, the F3DM as the first production plug-in hybrid, and the Qin. | Modify |
| Originate (2016–2021) | Egger's design center, the Blade battery, DM-i hybrids at a claimed 43% thermal efficiency. | Invent |
| Supply (2020–present) | FinDreams sells cells to Tesla, Toyota, Ford, and Kia. The Xuanji A3 chip is developed in-house. | Lead |
| Liability | Foxconn trade-secret ruling (2008) and recurring "copycat" criticism. | Risk |
Tactic: For every product you build by studying a competitor, write down in advance which component you will have to originate yourself by the third generation, and staff that team now.
Principle 5
Kill your sunk costs with your own hands
The 316 had cost CN¥100 million in R&D when dealers rejected it. Most organizations at that point would have tried to rescue the car with a facelift, a discount, or a smaller launch, anything to avoid admitting the money was gone. Wang scrapped it and, by every account, broke it himself. The F3 that replaced it became China's best-selling sedan.
The physical act matters more than it seems to. When a founder personally destroys a failed product, it settles the question of whether anyone may keep defending it. Nobody lobbies to resurrect a car the chairman has smashed. The gesture turns a financial write-off into an organizational fact.
The same instinct showed up later in less dramatic ways: ending petrol-only production in March 2022, dropping the BUILD YOUR DREAMS badging after criticism, and retiring the warship-named models into other lines. Each was a public reversal, and each was announced rather than hidden.
Tactic: When you kill a project, do it visibly and personally, and make the decision irreversible, so that no one in the organization has to spend political capital wondering whether it might come back.
Principle 6
Own the stack all the way down to the dirt
BYD claims to have the highest degree of vertical integration of any automaker. It makes its own batteries, motors, electronic controls, semiconductors, molds, and production equipment. It holds lithium mining rights in Brazil. It runs its own fleet of car carriers and its own insurance company. In UBS's teardown of the Seal, 75 percent of the components were made in-house, against 46 percent for a China-built Model 3, and the margin gap followed from that.
Vertical integration is unfashionable in management theory because it ties up capital and spreads focus. It works for BYD because the company began as a components maker, and the most expensive part of an electric car, the battery, was already its core business. For BYD, integration was not diversification. It was the outward growth of a component it already dominated.
FinDreams shows how to make integration pay for itself. Once the internal supplier can sell to competitors, the factories that might have been a burden become a separate business that funds itself.
Tactic: Identify the single most expensive input in your product, and if you could plausibly become world-class at producing it, build that capability first and sell its surplus to your competitors.
Principle 7
Spend on R&D hardest when the profits are lowest
In 2019 BYD's net profit fell to CN¥1.6 billion, the third straight annual decline, and Wang said the company's only goal was to survive. That year it spent CN¥8.4 billion on research and development. The Blade battery launched the following year, DM-i the year after, and sales grew tenfold in four years.
The logic runs against how most companies behave. Downturns are when competitors cut research, talent becomes cheaper, and the technologies that will define the next cycle are being decided. A company that keeps spending through the trough comes out with products its rivals stopped developing. Wang appears to have repeated the pattern in 2025 and 2026: profit fell, he admitted that BYD's technical lead had narrowed, and he answered with Flash Charging and an in-house chip, not cuts.
This only works if the business can survive the spending. BYD had battery and electronics revenue to lean on, and in 2019 non-automotive businesses brought in 51 percent of revenue. A company without a second engine may not be able to afford the move.
Tactic: Decide in a good year what your R&D floor will be in a bad year, measured in absolute spending rather than as a share of revenue, and commit to it before the downturn comes.
Principle 8
Rent the taste you cannot grow
BYD spent thirteen years trying to style its own cars, and the answer kept coming back: dealers rejected the 316, critics mocked the copies, and Musk laughed on television. In November 2016 Wang hired Wolfgang Egger, a designer formed at Alfa Romeo, Audi, and SEAT, and gave him a design center that eventually employed 600 designers and could mill a full-scale clay model in five days.
Founders often fail to see what they lack, or they overestimate how quickly they can learn it. Engineering knowledge can be absorbed from literature and teardowns, as BYD's 60-30-5-5 formula shows. Taste is harder to learn that way. It sits in people, so the fastest way to get it is to hire someone who already has it and give them authority.
Notice what Wang did not do. He did not hand over the company's whole personality. The guitar strings and karaoke stayed. The Dynasty names stayed. The dragon showed up in the E-Seed GT. Egger brought craft, and BYD kept its character.
Tactic: Name the capability your organization has failed at three times in a row, and instead of trying a fourth time internally, hire the best practitioner you can find and give them a mandate, a budget, and a building.
Principle 9
Refuse purity during the transition
In 2008 Wang said electric vehicles would let BYD skip the internal-combustion era altogether. In practice BYD ended up building what it claims is the world's most efficient production petrol engine, and in 2024 plug-in hybrids made up about 60 percent of its sales. The company that set out to leapfrog the combustion engine profited by perfecting it as a range extender.
This was not hypocrisy. It was an accurate reading of how transitions happen. Customers adopt new technology when their old worries are answered, and in China in the early 2020s, range anxiety and patchy charging were real worries. The F3e had been cancelled in 2010 for exactly that reason. DM-i hybrids met customers where they were, while the battery-electric lineup and the charging network caught up.
Pure electric companies won praise. BYD won market share. In 2025 it was both the world's largest battery-electric seller and its largest plug-in hybrid seller, because it never insisted that customers make the whole leap at once.
Tactic: If you are selling a transition, build the best possible bridge product as well as the destination product, and let customers choose their own pace.
Principle 10
Set dated, absurd goals, and be willing to arrive late
In 2008, with sales under 200,000 cars a year, Wang said BYD would lead the Chinese market by 2015 and the world by 2025. He missed both dates. He did not miss by as much as anyone would have predicted.
◎
The 'Two Firsts' of 2008, Scored
Wang's public goals against what actually happened.
| Goal (2008) | Outcome | Verdict |
|---|---|---|
| Lead the Chinese car market by 2015 | Became China's best-selling brand in 2023, ahead of VW | Eight years late |
| Largest automaker in the world by 2025 | Sixth in global sales in 2025, after passing Ford. Largest EV seller. | Partial |
| Use EVs as a "stepping stone" to foreign markets | Sold in 70+ countries by 2023, with about 46% of sales overseas in Q1 2026 | Achieved |
| Enter Europe and North America | Europe entered, with a 17.4% extra EU duty. No US passenger-car sales. | Blocked in US |
A goal with a date organizes a company even when the date slips. It tells engineers what scale to design factories for, tells recruiters how fast to hire, and tells investors (Munger, for one) what kind of founder they are backing. A modest goal met on schedule would have produced a modest company.
The danger is believing your own schedule. The 2010 dealer collapse, when production capacity outran quality, was the result of racing toward a deadline. Ambitious goals should set direction, not override quality.
Tactic: Publish one goal that is ten times your current scale and attach a date, and then build a separate, private quality check that has authority to slow you down.
Principle 11
Price for the market you are in, not the market you came from
According to Rhodium Group, BYD's cars sell in Europe at a 92 to 112 percent markup over Chinese prices. The company makes about €14,300 on each Seal U sold in Europe against €1,300 at home, and the Atto 3 costs $19,283 in China and $42,789 in Germany, where it is still competitive. Meanwhile it fought a price war at home that a rival chairman compared to the period before Evergrande's collapse.
The lesson is uncomfortable but clear. A cost advantage does not oblige a company to charge low prices everywhere. In a hyper-competitive home market, low prices defend share and volume. In foreign markets where local rivals have higher costs, the same cost advantage becomes margin. The EU's tariffs were meant to protect European makers, and they barely dented BYD's profitability, because BYD had never priced at its floor in Europe.
The domestic side of this strategy has shown its limits. Price cuts drew regulatory pressure, angered owners who had just paid more, and produced zero-mileage used-car scandals. A price war started to win share can turn into a fight nobody wins.
Tactic: Price each market against the local competitor's cost structure, not your own, and treat every export market as a source of margin rather than an extension of volume.
Principle 12
Know the price of becoming a national champion
BYD's rise is inseparable from Chinese industrial policy. Rhodium estimates about $4.3 billion in state support from 2015 to 2020, and in 2016 subsidies exceeded the company's entire profit. In February 2025 Wang sat directly in front of Xi Jinping as an honored national champion. In 2023 he framed BYD's global expansion as meeting the "emotional need" of 1.4 billion people.
National championship brings real benefits: subsidies, local-government fleet purchases, and protection at home. It also brings costs that compound. India blocked BYD's investment, the United States effectively closed its car market and added BYD to the Pentagon's list of Chinese military companies, the EU imposed duties, and Israel and Taiwan restricted its vehicles. Each subsidy that helped at home became evidence against the company abroad. The defamation suits BYD filed in the US, all of which lost, only made the story bigger.
A founder aligning with a state should understand that the alignment is read differently in every other capital. The question is not whether to take the help but whether the business can survive the bill when it arrives in foreign markets.
Tactic: Before you accept state support or national-champion status, model your three most important foreign markets under the assumption that their governments will treat that support as a reason to exclude you.
⇄
Conventional Wisdom vs. the Wang Approach
Where BYD's founder diverged from standard management advice.
| Conventional wisdom | Wang's approach |
|---|---|
| Automate to cut costs. | Swap capital for skilled manual labor, and build your own machines. |
| Focus on your core competency. | Treat your core competency (batteries) as the seed of a vertically integrated empire. |
| Innovate from first principles. | Start at 5% original research and climb toward invention. |
| Cut R&D in a downturn. | Spend more than five times profit on R&D in the worst year. |
| Commit fully to the new technology. | Perfect the old technology as a bridge (DM-i hybrids). |
| Disclose your strategy to investors. | Buy a car company without telling them in the prospectus. (Not recommended.) |
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Part IIIQuotes and Maxims
In their words
— Wang Chuanfu, on how BYD develops new productsIn developing a new product, 60% comes from existing literature, 30% from sample analysis, and another 5% from raw materials and other external factors. Our own original research accounts for only about 5%.
— Wang Chuanfu, at the ceremony for BYD's 5 millionth new-energy vehicle, August 2023An emotional need for the 1.4 billion Chinese people to see a Chinese brand becoming global.
— Wang Chuanfu, summarizing thirty years of BYD, November 18, 2024 (as reported by BYD Auto)Dare to think, dare to do, and dare to persevere!
— Charlie Munger, on BYD's lead over Tesla in China, February 2023It's almost ridiculous.
— Aaron McDonald, BYD Atto 3 owner in Perth, Australia, to NPR, 2024Yeah, it's fine. I mean, absolutely nothing to complain about, but it's not a superstar, right? It's not going to blow away all your friends with excitement. It's a — yeah, it's a utility.
Maxims
- Pick up what the leaders drop. The best openings are markets that incumbents leave for reasons that have nothing to do with demand.
- Question the machine. Every capital-intensive process deserves a check on whether the capital is required by physics or only by habit.
- Buy the permission. In a regulated industry, a license can be worth more than a factory.
- Copy as curriculum, never as destination. Imitation that does not end in invention is just a slower way to lose.
- Break the failure yourself. A sunk cost killed in public by the founder cannot come back.
- Integrate from your strongest part outward. Vertical integration works when it grows out of the component you already make best.
- Fund the trough. Research spending in the worst year shapes products in the best years.
- Hire the taste you lack, but keep your soul. Bring in the craft, and keep the guitar strings.
- Build the bridge as well as the destination. People cross to a new technology at their own pace.
- Know who is watching. Every advantage granted at home is examined somewhere else, and the people laughing at your car today may be the ones writing your tariffs tomorrow.
