Comment by dizhn
9 hours ago
> BYD is eating Tesla for lunch
For some reason my Youtube echo chamber is trying to convince me that BYD makes so many cars but cannot sell them. It's really bizarre. Other things it's trying to convince me of "Don't get an electric car. Period", "Ukraine won. Done deal", "Trump is devastated" about something else every day. Yes I do want the latter two to be true and it's playing on that but I don't get the BYD thing.
BYD is selling a lot of cars, but they're also making a lot more cars than they can sell at sticker price in China, as does every other Chinese car company. This oversupply leads to all kinds of distortions, like dealerships registering cars as "sold" to make their sales targets and then selling those brand-new cars as "used" at a discount. https://www.reuters.com/business/autos-transportation/local-...
Maybe your YouTube echo chamber additionally thinks that this will cause BYD to collapse, but I doubt that. There are about a hundred Chinese EV manufacturers in worse financial shape, who're likely to go bankrupt first, which should reduce oversupply enough for BYD to survive.
There's not really NEV oversupply, the EV adoption curve will keep shooting up from 50% to 100%, many PRC EV companies will die from competition/pricewar consolidation not broader oversupply, since EV industrial base is still undersupply relative to 100% adoption curve.
Oversupply is in legacy ICE displacement due to rapid domestic EV penetration. "Zero-milage used car" accounting trick is primarily to export excess capacity of gasoline cars (now that EV has taken over) that aren't moving domestically anymore. MOST of PRC exports are ICE, IIRC 60-80%, there's plenty of global demand for ICE still. Pushing domestic sku new car with crushed domestic demand as "used" exports where there's plenty of demand = meet sales target, but less through discounts but import fees engineering - used cars circumvent import duties, certifications, warranty requirements etc. It's a lifehack to unload domestic ICE inventory, not EV. This also likely transient effect because NEV transition in PRC happened so fast ICE manufacturer that target domestic market caught flat footed. They need a few years to either retool to EV or shift primarily to target export markets that still has appetite for affordable gasoline cars.
Right. I can imagine seeing lots full of unsold cars might be interpreted as "there is no demand", especially if they are trying to push a particular narrative.