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Hello dear gq community,
Today I would like to give you a closer look at developments in the electric car sector over the last few months.
This time it's not so much an in-depth evaluation of the BYD share $1211 (+1,43 %) than an introduction to the European electric car market and the company.
In the past, Chinese cars have been described as "clunkers" and "plastic bombers" with gaps wider than the phone book of German cities, and rightly so.
But the Chinese have one thing over the Europeans - they learn and they learn damn fast.
Today, the vehicles of the well-known Chinese manufacturers are flawless and of very high quality.
European car buyers are also noticing this more and more.
In Germany, buyers are becoming less and less skeptical. Whereas a year ago hardly any Germans could imagine buying a Chinese car, the latest surveys show that half of Germans could already imagine buying a Chinese car.
Why is this the case with BYD?
Like few others, the manufacturer has understood so quickly that Germans still want to go into a car dealership to inspect the vehicles, check the workmanship and feel the materials.
In the last 6 months, BYD has managed to persuade many renowned car dealerships to include BYD as a brand.
While other manufacturers only have a partner every few hundred kilometers, BYD currently has 190 service partners!
A year earlier there were just 26!
This shows how massively BYD has worked on its visibility and has been able to gain powerful partner companies in this short time.
The vehicles
BYD only launched its vehicles in Germany in 2022. It started with a smaller SUV with an unusual interior that reminded many of guitar strings and records, which was called the Atto 3. In addition, the Chinese offered a large SUV called Tang, which clearly wanted to push into the luxury sector, and a sedan, the Han, which scored points with equally fine materials. Some elements of the interior of this vehicle were particularly striking, looking very much like parts of the previous Mercedes C-Class. No wonder, as the Chinese had a collaboration with Mercedes.
Several other models were added later. Today, BYD offers every vehicle segment, from the Dolphin Surf subcompact to the sporty Sealion 7 crossover SUV.
Here too, few other manufacturers from the Far East are as well positioned as BYD.
The technology
BYD offers modern LFP batteries that offer low susceptibility to faults and a high level of safety. They also require no cobalt or nickel and are very durable.
The entry-level versions of the vehicles are already almost fully equipped. This is what German manufacturers dream of.
BYD offers many models either as fully electric vehicles or, for skeptics of e-mobility, as hybrids with ranges of over 1000 kilometers.
In short, BYD fully caters to the needs of German customers.
The design as well as the interior and chassis layout are geared towards German requirements.
Is that enough of a positive argument for the company?
Not by a long shot!
BYD not only builds good and inexpensive cars, but also commercial vehicles. We've had a large number of buses in our local public transport system for years now and they're humming quietly and emission-free through the cities.
BYD is also one of the largest battery and energy storage manufacturers.
Another line of business is the SkyRail rail system, which we don't have on our radar when we hear the name BYD.
Attention! The electronics division with contract manufacturing for well-known companies such as Apple, Samsung and Xiaomi is housed in a separate company with its own shares.
BUT the parent company holds over 65% of the shares, which also means that cash flows into the parent company.
The last branch of BYD is the production of solar systems.
BYD is not just a car manufacturer, but a huge corporation that is now becoming visible in Germany with its vehicles.
Since the beginning of the year, the share has been able to offer a remarkable upward trend of over 29% despite the adverse circumstances surrounding wars, inflation and trade disputes.
With a P/E ratio of over 20, the share is no longer really cheap if one were to view the company as a pure car manufacturer, but BYD should not be viewed as a pure car manufacturer. For this reason, a lot is already priced into the current price, but I think there is still plenty of room for upside.
The Hare himself is invested in BYD and remains convinced.
I hope you enjoyed this brief overview of this, in my opinion, very interesting company.
Your bunny 🐰 André
