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• Competition in the electric car market is becoming tougher
• BYD is closing the gap to Tesla
• Soon also car insurance in BYD’s product range?
BYD, short for Build Your Dreams, is becoming an increasingly tough opponent for industry leader Tesla. For a long time, Elon Musk’s e-car maker Tesla was considered the top dog in the field of electrically powered vehicles, but last year BYD caught up significantly in deliveries. This was partly due to the fact that the Tesla plant in Shanghai was affected by a corona lockdown, whereas BYD was lucky that its plants in China are hardly located in regions where lockdowns were imposed.
BYD Vice President Stella Li recently emphasized in a “Bloomberg” interview that she does not see Tesla as a direct competitor: “Our competition, maybe our enemy, is the car with a combustion engine”. Nevertheless, there is no denying that competition in the electric car industry is increasing, which is why Tesla is currently being forced to make significant price reductions in China, Europe and the USA.
BYD plans takeover
Now the Chinese, who have Warren Buffett on board as a prominent major investor, seem to be opening a secondary theater of war: The news agency “Reuters” reported that BYD wants to set up its own insurance business for electric cars and is already about to take over the Chinese insurer Yi ‘negotiated to P&C Insurance. The group has also confirmed this, it said.
According to Reuters, Yi’an P&C was seized by regulators in July 2020 as part of Beijing’s campaign against large financial conglomerates. The following year, the insurer then received approval to initiate bankruptcy and reorganization proceedings.
According to Reuters, electric vehicles are relatively difficult to repair, which poses major challenges for insurers. But Tesla launched an insurance division back in August 2019 with the promise of offering insurance policies up to 30 percent cheaper than its competitors.
Another mainstay for electric car manufacturer BYD
The entry into the car insurance business fits in with BYD’s previous strategy of diversifying. Because the Shenzhen-based group manufactures important vehicle components such as semiconductors and batteries itself and thus has an enormous competitive advantage in times of scarce raw materials and preliminary products. Now it seems that another lucrative business area around the car should be added.
Editorial office finanzen.net
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