In Effort To Reduce Costs, BYD Aims To Increase Plug-In Electric Car Output

2 months ago by Eric Loveday 6

BYD Qin EV300

BYD Qin EV300

Chinese automaker BYD says that it will increase output of plug-in electric vehicles in an effort to cut costs.

BYD plug-in hybrid vehicles Qin and Tang

BYD plug-in hybrid vehicles Qin and Tang

BYD’s hope is that it can sell more plug-ins next year than it did in 2016, despite the fact that China will begin to reduce subsidies for these vehicles.

By increasing output, BYD hopes to  decreases costs by an amount close to half the reduction in subsidies (-20% in 2017, as compared to 2016).

China Daily reports:

“Considering the government’s subsidy for new energy vehicles will decrease by 20 percent in 2017, the company has to cut its costs by 5 to 10 percent to compensate for this.”

“According to the Ministry of Finance, China will reduce the 2017-18 subsidies for new energy vehicles by 20 percent from those granted in 2016, and further cut them by 40 percent in the 2019-20 period.”

“All subsidies will be phased out after 2020…”

In addition, BYD will ramp up production at its battery cell division in an effort to further drive down costs. BYD says batteries account for up to 40% of the cost of electric vehicles.

BYD says that it’s prepared for the phase-out of subsidies, but it seems most other Chinese automakers are not ready for this reality.

The past few years have been break-out years for plug-in electric vehicle sales in China (largely due to those subsidies), but the coming years will show us whether or not EVs can stand on their own as subsidies begin to phase out.

Source: China Daily

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15 responses to "In Effort To Reduce Costs, BYD Aims To Increase Plug-In Electric Car Output"

  1. Roy_H says:

    Good news. BYD wants to do what Tesla is doing in the U.S.. bring costs down by large scale manufacturing. As production increases it is more economical to automate and reduce labor costs. Making more of a part before changing over the equipment to make another part also reduces labor.

  2. terminaltrip421 says:

    according to an article I found when searching for whether or not the phaseout was planned for a while, the phaseout is in response to the fraud. f-ing grand that the fraudulent companies effectively effed over the technology twice; taking the incentives they didn’t deserve and causing the incentives to disappear altogether.

    I hope BYD and any other chinese EV producer forges ahead. I was a fan of the idea of chinese tesla knockoffs assuming they were well made. I mean, whatever funds the tech IMO.

  3. Yogurt says:

    I realy like BYD but they have stated that they dot wont to compete on cost which is probably why they were over taken in China EV sales the last couple of months…
    That is probably a huge issue if they want to come the the US or Europe as it also is GAC who was at the Detroit auto show and said the same thing…

  4. I wonder if China could borrow some of Norway’s ICE taxing program’s? In that way, ICE buyers pay for the EV rebates!

    Maybe it is time for CARB states to do similar hits on ICE vehicles like Norway does?

  5. Bob Nan says:

    BYD is primarily a battery company and so they can mass produce batteries to bring down the costs. Even with a 20% cut in subsidies, they can easily bring down the cost by 30 – 40 % and sell more.

    1. Mikael says:

      BYD sold vehicles using somewhere around 10-13 GWh last year. They should be able to cut their production costs some considering the scale.

      This can be compared to the ~6 GWh Panasonic delivered to Tesla vehicles last year.

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