They say that to convince investors that the lithium batteries in his cars were sustainable and compatible with the environment, Wang Chuanfu did not hesitate and swallowed a shot of their liquid. Whether true or not – as The Wall Street Journal reported in 2008 – this episode says a lot about the determination and ambition of this Chinese businessman who is now on the front pages of the media because his electric car company BYD has surpassed to Tesla and is the automobile company that sells the most vehicles of these characteristics in the world right now.
Wang Chuanfu, 57 years old, embodies what should now be called the Chinese dream, due to its similarity to the American dream. Born in a small village in eastern China, he lost his parents as a teenager. He managed to complete his studies in chemistry and in 1995, thanks to a loan of $300,000 from a friend, Wang founded BYD (Build Your Dreams) in Shenzhen. The company, under Wang's leadership, was the first Chinese supplier of lithium-ion for Motorola and Nokia mobile phones in the early 2000s, establishing its presence in the battery industry before entering the automobile business.
BYD's initial foray into electric vehicles began in 2003, when Wang decided to pivot his business, sensing that the mobility of the future would be electric. He acquired a bankrupt state-owned automobile manufacturer and thus brought his first plug-in hybrid to the market. The year was 2008.
It was when even a guru like Warren Buffett recognized the potential of BYD with an investment of $230 million through Berkshire Hathaway. For the late Charlie Munger, Buffett's right-hand man, Wang was even "better than Elon Musk at making things." But unlike Elon Musk, Wang's presence on social media is almost non-existent. Evil tongues claim that much of his business success is due to state subsidies and his political connections. But he assures that everything lies in cost optimization. They say his work week is 70 hours. He is credited with a net worth of $15 billion.
Its business mission seems almost a declaration of political intentions. “The time has come for Chinese brands. It is an emotional need for 1.4 billion Chinese to see a brand from our country go global. Let’s tear down old legends to create new global brands!,” she once told the press.
The numbers support his proposal. With 526,000 cars delivered between October and December, BYD dethroned Tesla, which, despite growing 38%, stopped at 484,000 units. A symbolic overtaking that seems to seal the change of traction of the automobile industry from West to East.
It took BYD 13 years to produce its first million cars, another year and a half to reach three million and just 9 more months to reach five million produced. In 2023 it will surpass Volkswagen as the best-selling automobile brand in China. Its success is partly due to the fact that it makes its own batteries, as well as some of the semiconductors. An integrated supply chain that represents a competitive advantage.
“In China the company has a reputation similar to that of General Motors or Ford in the United States,” says Pedro Nueno, an IESE professor who is an automotive expert and who directs a business school in the country. “Their sales are successful in China because the market is favorable to electric cars, both because of subsidies and because they are the ideal vehicles for traveling in very large cities. But in Europe the situation is different,” he clarifies. In fact, BYD has very local success and is only now taking its first steps on the Old Continent. With a market capitalization of $78 billion, it is a company ten times smaller than Tesla. But Wang has already shown that he is willing to swallow whatever it takes to achieve success.
