How BYD Makes Electric Cars So Cheap — It Makes No Sense!

Discover how BYD produces electric cars under $10,000 by vertically integrating manufacturing and innovating supply chains.

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Key Takeaways

Vertical integration enables BYD to drastically reduce costs by controlling production of key components.
BYD's in-house manufacturing shields it from global supply chain issues and supplier markups.
Their affordable EVs challenge the traditional auto industry's pricing models and supply chain strategies.
Expertise in battery technology is a critical competitive advantage for BYD.
BYD's success demonstrates that building cars differently can disrupt established automotive markets.

What the video covers

BYD offers electric cars priced as low as $10,000, far below typical EV prices of $40,000-$50,000.
The low prices are not due to subsidies, poor quality, or hidden costs; BYD delivers millions of reliable cars annually.
BYD achieves cost efficiency through vertical integration, manufacturing key components like motors, batteries, and chips in-house.
This approach contrasts with traditional automakers who source parts from multiple suppliers, each adding profit margins.
BYD's founder leveraged deep battery chemistry expertise to reduce material costs and build a strong supply chain.
The company started by acquiring a state-owned factory despite no prior car industry experience.
BYD's strategy allowed it to avoid supply chain disruptions like the 2021 chip shortage that impacted other automakers.
The BYD Seagull, a small city car, exemplifies their cost-effective manufacturing and sells for around $10,000 in China.
BYD now sells more electric cars globally than Tesla and Volkswagen, expanding into markets like Australia without special subsidies.
The company's evolution from a cheap car maker to a tech-driven automaker is reshaping perceptions of what a car company can be.

Chapters

How does BYD manage to sell electric cars for under $10,000?

BYD achieves these low prices through vertical integration, manufacturing most key components like motors, batteries, and chips in-house, eliminating supplier markups and reducing costs.

Are BYD's electric cars reliable despite their low price?

Yes, BYD delivered over 3 million electric and plug-in hybrid cars last year, all with real warranties and features like touchscreens, proving their cars are reliable and road-ready.

Does BYD receive government subsidies that explain their low prices?

No, BYD's pricing is not primarily due to subsidies or hidden costs; their manufacturing strategy and supply chain control are the main reasons for their affordability.

Full Transcript — Download SRT & Markdown

Speaker A

BYD's electric cars are too cheap to make sense. That is the simplest way to put it. A brand new electric car from this Chinese company costs less than $10,000 in some cases. Most people think an electric car should run $40,000 or $50,000 at minimum.

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$50,000 at minimum. So, when you hear about a real drivable EV with a warranty and a touchscreen for under $10,000, your brain tells you something does not add up. There must be a catch. Bad quality, hidden costs, a government

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So, when you hear about a real drivable EV with a warranty and a touchscreen for under $10,000, your brain tells you something does not add up. There must be a catch. Bad quality, hidden costs, a government paying for the whole thing with cash.

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real, [music] and they are so low that the rest of the car industry cannot explain them. BYD's electric cars are too cheap to make sense. At least if you look at it the way the old industry works. But when you understand how BYD

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But here is what is strange. None of that is true. BYD delivered over 3 million real cars last year. Real people drive them on real roads every single day. The cars are good, the prices are real, [music] and they are so low that the rest of the car industry cannot explain them.

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starts with a simple idea that took 20 years to pay off. The answer to why their cars are so cheap is hiding in plain sight, and it changes how you think about what a car company even is.

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BYD's electric cars are too cheap to make sense. At least if you look at it the way the old industry works. But when you understand how BYD builds them, the prices make perfect sense. If you like videos like this, please hit the like button because these take a lot of work to put together and subscribe so you do not miss the next one.

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And the car at the center of it is the BYD Seagull, a small city car that sells in China for around $10,000.

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The story of how BYD got here starts with a simple idea that took 20 years to pay off. The answer to why their cars are so cheap is hiding in plain sight, and it changes how you think about what a car company even is.

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It is not a toy or a concept. It is a car you can buy today. BYD is the company behind it. The name stands for Build Your Dreams and they are based in Shenzhen, China. 5 years ago, almost

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The $10,000 car is real. BYD's electric cars are too cheap to make sense. That is the whole puzzle.

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In some places, they outsell both of those brands put together. Last year, BYD delivered over 1.7 million fully electric cars and another 1.6 million plug-in hybrids. Those are real sales, real cars on real roads, [music] and almost every model they sell costs far

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And the car at the center of it is the BYD Seagull, a small city car that sells in China for around $10,000.

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Every major part of it comes from a BYD factory. The motor is theirs. The battery is theirs. The chips are theirs.

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It has a real motor, a real battery, a real touchscreen, and a real warranty.

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assume something is hidden. Subsidies, cut corners, fake accounting. Because if the price is real, it means the global auto industry has been overcharging for decades. But what if the answer is not a trick? What if BYD simply builds cars in

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It is not a toy or a concept. It is a car you can buy today. BYD is the company behind it. The name stands for Build Your Dreams and they are based in Shenzhen, China. Five years ago, almost

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Building every piece from scratch. Take the BYD Seal as an example most people can picture. It is a midsize sedan about the same size as a Tesla Model 3 or a BMW 3 series. It has a full glass roof, a rotating touchscreen,

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nobody outside of Asia had heard of them. Today, they sell more electric cars than anyone else on the planet, more than Tesla, more than Volkswagen.

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In Australia, where BYD gets no special government help over local brands, it sells for about $46,000 [music] Australian dollars. That puts it right next to German sedans in the same class.

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In some places, they outsell both of those brands put together. Last year, BYD delivered over 1.7 million fully electric cars and another 1.6 million plug-in hybrids. Those are real sales, real cars on real roads, [music] and almost every model they sell costs far

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chips come from a factory in Taiwan or South Korea. The battery cells come from Korea. The glass comes from a totally different company. A single modern car has somewhere between 20,000 and 30,000 separate parts. For most old car

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less than the similar car from any American or European brand. The Seagull sits at the bottom of their lineup.

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gets really good at one thing. The car company buys all those parts and bolts them together at the end. This system worked fine for a long time until it did not. The chip shortage of 2021 showed [music] just how weak this setup is.

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Every major part of it comes from a BYD factory. The motor is theirs. The battery is theirs. The chips are theirs.

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screens. Volkswagen slowed down at several factories. General Motors cut back on its best-selling models. The whole industry lost about $210 billion that year. All because of a shortage of parts that cost less than a cup of coffee. BYD never slowed down. This was

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The software is theirs. When you build millions of cars a year and you make every important piece yourself, a $10,000 price tag on a small city car is not magic. It is just math. But that number makes people suspicious. They

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chain broke down, BYD just turned up the speed at their own factories and kept going. No desperate calls to suppliers, no paying extra for emergency parts, no trucks sitting halfone in a field. This is called vertical integration, and it

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assume something is hidden. Subsidies, cut corners, fake accounting. Because if the price is real, it means the global auto industry has been overcharging for decades. But what if the answer is not a trick? What if BYD simply builds cars in

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part [music] because you are making so many of them all the time. Every year, BYD builds more cars and every part in those cars gets a little cheaper to make. Think about the battery. A cell that cost BYD about 100 in 2018 dropped

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a way nobody else does? To understand why their electric cars are too cheap to make sense, you have to look at what is inside them and where every piece comes from.

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that to a European automaker trying to build a similar car. They buy battery cells from a Korean company. They buy chips from Taiwan. They get a motor from another company. Every one of those deals has a profit margin built in for

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Building every piece from scratch. Take the BYD Seal as an example most people can picture. It is a midsize sedan about the same size as a Tesla Model 3 or a BMW 3 series. It has a full glass roof, a rotating touchscreen,

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is why the prices look impossible to people watching from the outside. They are comparing a car made from bought parts to a car made almost entirely in-house. So why did Western car companies not do the [music] same thing?

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rear-wheel drive, software updates, and an 8-year battery warranty. In China, it starts at around $22,000.

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reason to break up their own supply chain to basically fire their own suppliers was never there until it became an emergency.

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In Australia, where BYD gets no special government help over local brands, it sells for about $46,000 [music] Australian dollars. That puts it right next to German sedans in the same class.

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built a single car, he knew battery chemistry and making batteries better than almost anyone in the car world. He spent years learning how to drive down the cost of every material inside a battery cell. [music] He knew where

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And in many ways, it beats them. So, where do all the parts come from? If you ask that about a Volkswagen or a Toyota, you would get a long answer. The engine comes from one supplier. The transmission comes from another. The

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He decided BYD should start building cars. He bought a dead state-owned car factory. He had no experience in the car business.

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chips come from a factory in Taiwan or South Korea. The battery cells come from Korea. The glass comes from a totally different company. A single modern car has somewhere between 20,000 and 30,000 separate parts. For most old car

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business press called it a joke. People who followed the company said Wang had lost his mind. That joke lasted about 15 years, just long enough for the laughing to stop. Wong Chuan Fu believed something simple but powerful. The

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companies, [music] the vast majority of those parts come from outside companies. Sometimes those suppliers are in other countries. [music] Sometimes they are on the other side of the world. This is how the car industry has worked for 100 years. Each supplier

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someone else. They ask for a price, they talk it down, and they wait for delivery. They cannot see how much it really costs to make, and they cannot push that cost down from the inside.

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gets really good at one thing. The car company buys all those parts and bolts them together at the end. This system worked fine for a long time until it did not. The chip shortage of 2021 showed [music] just how weak this setup is.

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prices down or making nicer cars. The head start would be almost impossible to close. He was right. The battery operation in Shenzhen is now a giant, highly automated factory that never stops. If you could walk through it, the

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Chips are tiny pieces that cost a few dollars each, but a lack of them brought some of the biggest car factories in the world to a stop. Ford had thousands of pickup trucks sitting in lots fully built except for the chips that run the

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goes straight into the price of every car BYD sells. When you make batteries by the millions instead of by the thousands, every step gets cheaper. The materials cost less because you buy in bulk. The machines run better because

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screens. Volkswagen slowed down at several factories. General Motors cut back on its best-selling models. The whole industry lost about $210 billion that year. All because of a shortage of parts that cost less than a cup of coffee. BYD never slowed down. This was

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They give you a number that includes their profit. If you are BYD, you walk down the hall to your own battery line.

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not luck. BYD makes its own chips. They do not just put cars together. They build the batteries, the motors, the power electronics, the chips, the headlights, and even the glass in some of their cars. When the global supply

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Over millions of cars, that difference adds up to a fortune. But the battery itself is more than just a cell dropped into a metal box. How it is packed, how it fits into the car, and what is inside

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chain broke down, BYD just turned up the speed at their own factories and kept going. No desperate calls to suppliers, no paying extra for emergency parts, no trucks sitting half one in a field. This is called vertical integration, and it

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battery changes the rules. In 2020, BYD showed the world something called the blade battery. [music] It was not just a cool name. It was a real change in how a battery pack is built.

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is the first reason BYD cars cost what they cost. When you make everything yourself, two things happen. First, you keep the profit that would normally go to a supplier. Second, and this grows over time, you get better at making each

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The module design wastes space inside the [music] pack. It adds weight and it creates more joints and connections that can break over time. The engineers at BYD asked a different question. What if you just skip the module step entirely?

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part [music] because you are making so many of them all the time. Every year, BYD builds more cars and every part in those cars gets a little cheaper to make. Think about the battery. A cell that cost BYD about 100 in 2018 dropped

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The battery is not just sitting inside the car. It becomes part of the car's bones. The result is a pack [music] that is stronger, lighter, and smaller than a normal one. You can either fit more energy in the same space or get the same

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to around $60 by 2023. That is not because the battery chemistry got magically better. It is because BYD was making so many of them in their own factories with their own small improvements that the cost kept dropping year after year. Now compare

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batteries based on nickel and cobalt. Those materials give you high energy density, which means more miles per pound of battery. But cobalt is expensive [music] and hard to get in a clean way. And the chemistry can become unstable when it gets stressed. If you

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that to a European automaker trying to build a similar car. They buy battery cells from a Korean company. They buy chips from Taiwan. They get a motor from another company. Every one of those deals has a profit margin built in for

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to make. It uses no cobalt at all, and it is far more stable under stress. You can drive a steel spike through a BYD blade cell, and it will not catch fire.

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the seller. By the time the car is done, the cost has been stacked with markups on top of markups that BYD does not have because BYD decided years ago to make all of those things under one roof. This

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savings showed up right away because BYD was not paying another company for cells, not paying extra for cobalt, and not paying for the labor of putting modules together. Those costs just went away. They were designed out of the car

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is why the prices look impossible to people watching from the outside. They are comparing a car made from bought parts to a car made almost entirely in-house. So why did Western car companies not do the [music] same thing?

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just laughed and said he was not impressed by their cars ended up copying their battery approach. There was no press release about it. Tesla just started using the chemistry because the engineering was right. The battery is the heart of an electric car. But to

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A few tried. It is really hard. Building a good battery factory takes years and billions of dollars before you make a single cell. Making your own chips takes even longer. The old automakers had good businesses making gas engines. And the

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A 20-year bet that is finally paying off. Put all the pieces together and the picture changes. The vertical integration, the blade battery design, the LFP chemistry, the huge production volume, [music] the 20-year head start on building the most important part of

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reason to break up their own supply chain to basically fire their own suppliers was never there until it became an emergency.

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BYD took about 40% of the electric vehicle market within 18 months of showing up. In Norway, which is one of the toughest and most EV focused markets in the world, [music] the BYD Tang made it into the top five best sellers. In

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A battery company that learned to build cars. BYD did not start as a car company. It started as a battery company. The founder, Wang Chuan Fu, built BYD into the biggest mobile phone battery maker in the world. Before the company ever

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These countries do not have the same politics. They do not have the same government help. [music] They do not have the same economy. They are different nations making their own buying choices. And in every single one of them, the trend points the same way.

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built a single car, he knew battery chemistry and making batteries better than almost anyone in the car world. He spent years learning how to drive down the cost of every material inside a battery cell. [music] He knew where

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for the same reasons. But BYD is building factories in Hungary, in Brazil, and in Thailand. [music] When they build cars in those countries, the tariff math changes. And the big thing is that the cost advantage goes with them. The batteries, the motors, the

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every penny went. Then in 2003, he made a choice that almost broke the company.

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That has been answered by millions of cars sold. The question is whether companies that have spent 100 years buying parts from outside experts can change fast enough into companies that make those parts themselves. and whether they can do it in time to matter. There

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He decided BYD should start building cars. He bought a dead state-owned car factory. He had no experience in the car business.

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BYD did all of that work before anyone outside of China was paying any real attention. Now, the industry is paying very close attention. Toyota is speeding up its battery work. Volkswagen is redoing its whole EV plan from scratch.

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He did not even have a driver's license. His investors were angry. They thought he was throwing awa

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time is the hardest thing to close. What we are watching is bigger than one brand making cheap cars. It is the result of a totally different idea about what a car company should be. Is a car company just

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an assembler that buys parts and [music] puts them together? Or is it a company that controls every layer of the product from the chemistry of the battery to the code on the screen? BYD made that choice quietly, long before it mattered, and

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then spent two decades building the system to back it up. The $10,000 electric car is not an accident. It is not a subsidy. It is not a financial trick. It is the result of a road that almost nobody was watching while it was

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built. But this story is far from over. BYD is already working on its next wave of technology. and what comes next could make a $10,000 car look like the expensive option.

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The next 20 years are already underway. What makes this more than just a car story is [music] what BYD is building right now in labs and factories that most of the world is not watching. They have said they are working on solidstate

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battery cells. That is a technology that could push energy density higher and costs lower than what LFP has already done. They have a research team working on solar panels that go right into the body of a car, adding range from nothing

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but sunlight. Their newest hybrid system gives you over,200 mi of range on a single tank and charge. That is not a concept or a show car. [music] It is a car you can walk into a dealership and buy today. If the last 20 years built a

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system that could make a $10,000 electric car, the real question is what the next 20 years will build. That future is already in the works. We are just at the point where the prices stop making sense to outside viewers [music]

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and people are starting to ask how it happened. Is BYYD showing that Tesla charges too [music] much? Or is Tesla showing that people will always pay more for a name they know and trust? The answer depends on whether you see a car

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as a box of parts [music] ordered from a catalog and put together in a factory or as a complete system built from the ground up to be as cheap, as efficient, and as simple as possible. BYD has made

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its choice clear. The rest of the industry is rushing to catch up, [music] and that rush will shape the next 10 years of how the world gets around. The real competition is not about who can sell the cheapest car. [music] It is

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about who owns the technology inside it. BYD does not just put the car together.

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They make the chips that run the screens. They make the battery cells that hold the energy. They make the motors that turn the wheels. They even make the glass in the windows. That level of doing it yourself gives them a

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kind of freedom that no old car company has. When a supplier raises prices, BYD can just look at its own line and decide to take the cost or build around it.

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When a global shortage hits, BYD is not waiting for someone else to fix the problem because they are the supplier.

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The world is watching a company that started out making batteries for flip phones, got laughed at when it got into cars, and is now setting the pace for the whole global car industry. The $10,000 electric car is the headline,

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but it is not the end of the story. The real question is how much further this model can go and whether anyone in the old industry can answer in time. The next 20 years will tell us. But the

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groundwork is already done. For a long time, people outside China looked at BYD and saw a company making cheap cars. Now they look at BYYD and see a tech company that also makes cars. That change in how you view the company is what makes the

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prices stop looking crazy. When you build every part yourself, when you own every layer of the supply chain, and when you have spent two decades getting better at the most expensive parts [music] at a scale nobody else can

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match, a $10,000 electric car stops being a surprise. It becomes the natural result of a plan that started long before anyone was paying attention. And that plan is still going. If this story kept your attention and you want more

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like it, hit the like button, subscribe, and turn on notifications so you never miss the next one. There are related videos on the screen right now. If you want to keep going, here is a question for you. If you were running an old car

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company trying to catch up to BYD, would you spend the time and money to build your own batteries and chips? Or would you try to find a totally different way to compete? Let me know in the comments.

Topics:BYDelectric carsvertical integrationEV affordabilitybattery technologysupply chainautomotive industryBYD Seagullelectric vehicle manufacturingChinese car company

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