BYD, the Shenzhen-based electric vehicle (EV) manufacturer, has announced the company would stop production of internal combustion engine cars as of this March and will focus on pure electric-powered and plug-in hybrid EVs, according to BYD’s statement on Weibo on 3 April. This makes BYD the world’s first auto company to discontinue producing petrol-fuelled cars, a further step taken by one of the world’s biggest EV carmakers for the global environment.
Existing customers of BYD’s petrol engine-powered vehicles, however, will continue receiving promised after-sale service and warranty, the statement adds. The move responds to China’s overall carbon emission plan, where the government promises a peak of greenhouse gas emissions by 2030 and to realise carbon neutrality by 2060.
China’s carbon pledge has pushed BYD to double down its bet on these clean energy products and the fruit from last year’s efforts has furthered the company’s determination in its electrification strategy. BYD smashed a sale of EVs by nearly 600,000 units in 2021, three times as many as that achieved in 2020, as per the company’s 2021 annual report. With such a record, BYD topped sales rankings in China’s new energy vehicle market, and took second place in the global market, just following the American rival Tesla.
The growth pulled up by EVs has also allowed BYD to break the company’s decade-long sales bottleneck. Having had the total annual sales stuck around 400,000 since 2009, the company’s overall sales, for the first time, hit more than 700,000 in 2021, thanks to the domestic boom of the EV market that has brought out new avenues of revenue for the carmaker.
The latest shift would naturally advance the development of BYD. On the other hand, the company has also been warned of challenges, in particular, sluggish growth in profit, due partly to the increasing cost of raw materials such as Lithium and Cobalt, both are crucial components for batteries powering electric vehicles.
While the rise in cost is believed to have slowed down recently, some have raised concern as to the company’s ability to deliver, with consumers reporting 4 to 6 months wait before they can pick up a car, pushing some to turn to other brands.
BYD, therefore, is also expected to improve its capacity in order to scale up its production to meet market demand. This would also allow the manufacturer to pull off mass production to further cut down the cost, and therefore, better leverage the potential of a thriving market.