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Yet it will not be the logos of BMW or German rivals including Volkswagen or Mercedes-Benz plastered on stadiums or television coverage. Instead, China’s BYD is the only carmaker to sponsor Europe’s premier international tournament.

BYD’s roots as a battery maker appear to have given it an important manufacturing advantage. Rhodium’s Sebastian said vertical integration – owning the supply chain rather than buying parts from elsewhere – had given it “a lot of control over costs”.

Tu Le, the managing director of Sino Auto Insights, a consultancy, highlighted its ownership of computer chip factories as well as its batteries. And “they have scale”, he added, predicting 4m car sales this year – about half pure electric and half hybrid. “There is no one close to building as many clean energy vehicles as BYD.”

And where other carmakers have focused on long-range batteries containing expensive nickel, manganese and cobalt (NMC), BYD has pioneered the use of the cheaper lithium iron phosphate (LFP) chemistry.


https://www.theguardian.com/business/article/2024/...

Rhodium’s Sebastian said vertical integration – owning the supply chain rather than buying parts from elsewhere – had given it “a lot of control over costs”.



I don't see how owning the parts makers gives you any control over the costs. Certainly it gives you some advantages: control of supply, quality, integration with your product, etc. But control over costs?v if you are a carmaker like Ford that is buying its batteries, you pay market price for batteries. If you are BYD, you have to make them yourself, and you will still end up paying roughly their market price. The market price for a commodity like batteries is, very roughly, the same thing as their cost of production. If BYD could make batteries any more cheaply than its competitors, it would be taking over the market for batteries, but it can't and it isn't.

dtb

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