Why Warren Buffett-Backed BYD Becomes a “New” Success

Those who are familiar with the business world would know BYD, a Chinese automaker that is backed by Warren Buffett. It is headquartered in Guangdong Province in southeastern China, the largest province of the country in terms of economy and foreign trade. In 2023, BYD sold more than 3.02 million new energy vehicles (NEVs), ranking first in the world. For every five NEVs sold globally, there would be one from BYD.

Is BYD’s “new” success incidental? Wang Chuanfu, founder and CEO of BYD, shared his thoughts at a high-quality development conference held in Guangdong on February 18. “These achievements are an epitome of Guangdong’s commitment to prioritizing manufacturing, accelerating the development of new quality productive forces and achieving high-quality development”, he said.

The term “new quality productive forces (NQPF)” was written into China’s annual government work report in 2024, and has since become a buzzword. In the report, “striving to modernize the industrial system and developing new quality productive forces at a faster pace” is set as the first major task for 2024. The report lists more than 10 industries including intelligent connected new energy vehicles that are regarded as NQPF.

In order to promote the development of NQPF, Guangdong Province has been actively launching industrial innovation projects, improving the industrial ecosystem, expanding application of innovations, and promoting integrated and clustered development of strategic emerging industries. There are not only national champions such as BYD in the province, but also a large number of less visible champions with great creativity and excellent achievements in specific segments. For example, a company called RoboSense, also based in Guangdong Province, mainly produces LiDAR—“the eyes of NEVs.” Benefiting a lot from Guangdong’s full-fledged automotive supply chain both upstream and downstream, the company delivered more than 250,000 LiDAR units in 2023, ranking first nationwide. Nine of the top 10 Chinese automakers by sales use LiDAR produced by RoboSense. Such outstanding performance of upstream operators have laid a solid foundation for BYD’s “new” success.

Look across the whole country and you’ll find that BYD’s “new” success is not an isolated case, and the region-specific effort to develop NQPF is continuously producing new outcomes. In 2023, China accounted for over 60 percent of global NEV output and sales, and there was a 30-percent increase in exports of the “new trio,” namely, electric vehicles, lithium-ion batteries, and photovoltaic products. China’s traditional industries saw accelerated transformation and upgrading, strategic emerging industries achieved vigorous growth, and groundwork was laid for developing industries of the future. Advanced manufacturing was further integrated with modern services, and a number of world-class innovations were made in major industries. It is increasingly clear that NQPF does not mean isolated, sporadic breakthroughs. Instead, it means connecting scattered dots of breakthroughs into lines and lines into a network, which will drive the development of complete industrial chains, entire industries and the whole society, and produce a multiplying effect.

In Guangdong, you will find a myriad of high-tech enterprises like BYD, all sparking with inspiration and creativity. If you take a bird’s eye view of Guangdong, these sparkling dots, when connected, form a highly efficient and collaborative virtual network providing a constant source of economic dynamism. This dynamism is the reason behind BYD’s “new” success.