BYD's boss on geopolitics, market competition, talents and BYD's secret sauce for success

Recently, Wang Chuanfu, Chairman and President of BYD, attended the 2024 China Automotive Chongqing Forum (CACS2024) held from June 6 to 8 and participated in BYD's annual shareholder meeting on June 6.

At CACS2024, Wang Chuanfu delivered a keynote speech, summarizing BYD's success as the result of several factors: a high-quality engineering talent pool, a highly integrated vertical innovation system, support from national strategies, and a vast base of Chinese automotive consumers. Addressing the issue of "involution" in China's new energy vehicle industry, he stated that the essence of "involution" is market competition, which he described as "excess economy." He believes that only through surplus can competition arise, and competition, in turn, fosters prosperity.

When discussing talent, Wang emphasized that China has a natural advantage in this area, with over 10 million technical graduates each year, particularly from top universities like Tsinghua, Peking University, and other 985 and 211 institutions, providing a significant number of R&D talents. He noted that Chinese entrepreneurs are "very fortunate" to have access to ordinary resources and high-level R&D personnel.

Regarding the restrictive policies imposed by the US and the EU on Chinese new energy vehicle companies, Wang remarked that these measures are abnormal and only serve to make Chinese car companies proud of their own brands.

On developing "new productive forces," he argued that in the automotive industry, this means driving corporate growth and national industrial transformation and upgrading through innovative technologies and products.

Below is the full speech:

Dear friends and leaders, good morning everyone! Today, I am very pleased to be here. I remember visiting this hall 3-4 years ago, where we discussed the market share of domestic brands. Over the past few years, significant changes have occurred. Under the guidance of national strategies, China's new energy vehicles (NEVs) have undergone tremendous transformations in scale, quality, industrial chain, and cost. As you can see, many foreign forces, especially politicians, are anxious and even fearful about the development of China's NEVs. When we say we're doing well, not everyone believes it. However, the anxiety and fear from foreign politicians actually confirm our success. If we weren't strong, others wouldn't be afraid. This is especially true for Europe, the birthplace of the automobile, and America, the pioneer of the automobile industry with giants like Ford. The recent measures, policies, and high tariffs are abnormal, making us proud of China's domestic brands.

In recent years, under the strategic guidance of the government, China's domestic brands have made significant progress in technology enhancement, industrial chain construction, product development, and market marketing. The development of the industry has its ups and downs, challenges, and opportunities, and NEVs are no exception. Recently, I saw discussions online about competition in pricing, technology, scale, and market share. Looking back in five or ten years, this competition will be seen as a driving force for progress. Market competition is the core of development. Excess supply leads to competition, and competition leads to prosperity. The prosperity of our nation is accompanied by competition and market development, leading to changes in goods and economic takeoff.

All entrepreneurs should embrace and participate in this competition, setting sail to support Chinese brands and create the world's leading brands. This is a natural law. Reflecting on household appliances and mobile phones, there were hundreds of brands in Shenzhen, and through years of competition, only a few world-class brands remain. The same happened with household appliances and solar energy industries. This natural law of competition should not cause anxiety. Only by actively embracing and participating in it can we truly emerge victorious.

The conference talks about new productivity, which fundamentally revolves around innovation. New productivity, as a national strategic direction, is essentially about innovation. In the NEV industry, replacing traditional fuel vehicles is an unstoppable trend. Recent statistics show that NEV production surpassed fuel vehicles. This revolution is fundamentally a technological one, driven by innovation. In the automotive industry, new productivity driven by innovative technologies and products will propel enterprise development and national industrial transformation and upgrading.

Innovation requires talent. Every enterprise needs a large number of innovators, especially in the NEV sector, which involves batteries, motors, electronic controls, and engineering semiconductors. These talents are the foundation of innovation and must be cultivated. Under the strategic guidance of the government, China’s automotive industry has built a robust talent pool from scratch, particularly in electric vehicles. Currently, we have nearly 100,000 engineers focused on various aspects of EVs, including batteries, motors, and controls.

China has a favorable environment, with over 10 million university graduates annually, especially from top institutions like Tsinghua and Peking University, providing a fertile ground for talent. Chinese entrepreneurs are fortunate to have access to both ordinary and high-level resources, enabling the automotive sector to achieve higher levels of innovation. With adequate platforms, research funding, and time, these talents will bring revolutionary technologies to enterprises. As an engineer myself, I understand the need for a good research platform and funding, which are essential for innovation and achieving mass production.

In addition to technological innovation, the economy plays a crucial role. The NEV industry is still new, compared to the century-old traditional fuel vehicle industry. In the past decade, various technological integrations and innovations have been crucial. BYD, for instance, has established a highly vertically integrated platform, breaking industry barriers and enabling high-efficiency innovation. Early automobile history shows that vertical integration by pioneers like Benz, BMW, and Ford facilitated rapid innovation and industrial chain formation.

History repeats itself, and in the current NEV revolution, vertical integration enhances innovation and efficiency. The collaboration between batteries and vehicles, motors, and controls in a vertically integrated system significantly boosts efficiency. This advantage allows us to complete in one or two years what others might take five years. In times of transformation, leading by even three years can make a significant difference, allowing a company to soar or collapse.

BYD’s path of vertical integration, coupled with central and national strategic guidance, consumer support, and love for new NEVs, has led to substantial development. The theme of today's conference underscores the importance of innovation and vertical integration, which has been the cornerstone of BYD's development experience. The journey ahead for NEVs is long, requiring further overcoming of challenges in technology, infrastructure, and consumer experience. Continuous investment and efforts from entrepreneurs will ensure we emerge as leaders in this transformation.

Thank you, everyone.

BYD's 2023 Annual General Meeting

The 2023 Annual General Meeting of BYD was recently held at BYD's global headquarters in Pingshan District, Shenzhen. Chairman Wang Chuanfu attended the meeting along with his management team.