Here I analyze the China strategies of 3 firms, General Motors (GM), BYD (OTCPK:BYDDF) and Tesla (TSLA). I note briefly Great Wall (OTCPK:GWLLF). I write from
China's EV Market: Comparing Strategies Of GM, BYD And Tesla
Summary
- China's passenger vehicle market is large and varied, with 108 EVs and 41 PHEVs in August. EV players position themselves differently, which will condition their potential growth and profitability.
- GM has China's top-selling EV in the Wuling Hongguang. To succeed it must move upmarket, a longstanding strategy for success in automotive.
- BYD is positioned differently. It began as a battery maker, not a car company. Its strength is a broad product portfolio and strong overall sales, a good foundation for expansion.
- Tesla entered China with products designed for California, and its strategy remains US-centric. Its branding impedes moving downmarket. It faces death by 147 cuts from competitive Chinese NEVs.
I'm a retired economist. Over the decades I focused on the auto industry and on the Japanese economy. I also taught a course on the Chinese economy for 30+ years. Prior to that I was an international banker and worked in factories. I began visiting automotive suppliers in Japan in 1983 for my PhD, while based at Hitotsubashi University and the University of Tokyo. Since 1994 I've served as a judge for the Automotive News PACE awards, visiting suppliers (under an NDA) for business case and engineering presentations on innovations. Over the years I've visited over 100 suppliers, in Korea, Japan, China and the Philippines, the US/Canada/Mexico, many countries in Europe, and Israel. I'm also on the steering committee of the GERPISA consortium of auto industry researchers, and helped plan their June 2022 global conference in Detroit. I'm the co-author of Smitka and Warrian (2017), A Profile of the Global Auto Industry: Innovation and Dynamics, available on Amazon as an eBook.I first lived in Tokyo in 1975, after graduating from Harvard with a degree in East Asian Studies. My econ PhD is from Yale; the Nobel Laureate Oliver Williamson was my dissertation chair. I've spent 7+ years in Japan, and 2 months or more in China, Korea, Germany and the Philippines. I read, write and speak Japanese, and read German and (a covid project) now read Chinese.My current research interests are technology in the automotive supply chain, and the Chinese industry. I am active in my community, the Treasurer for 2 non-profits and on the Board of a 3rd.My investing is mostly passive, via my university's TIAA retirement plan, supplemented by direct holdings of 20 or so equities.
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