17 January 2020

Reckless technical race may derail BYD’s e-car drive

Is BYD (01211.HK) chairman Wang Chuanfu {王傳福} too obsessed with technical breakthroughs?

With much fanfare last month, Wang revealed that the E9, its next generation of e-sports cars, needed just 3.9 seconds to go from zero to 100 km/h. Tesla’s signature Model S takes 4.4 seconds.

Wang was also keen to talk up the car’s battery modifications. BYD has based its units on lithium iron phosphate, a compound with a high energy density. The technology has allowed the E9′s battery performance to reach a new high of 120 Watt-hours per kilogram, according to Wang, besting BYD’s earlier e-cars like the F3, which managed just 90 WH/kg.

Much time was also given over to touting other features, ranging from the four-wheel drive (4WD) system to the ultra-large, iPad-like dashboard touchscreen.

The bid to out-innovate rivals is commendable, but there are concerns that BYD is advancing technology for technology’s sake. BYD’s big investment in research and development might be a boost to its brand image as a technology-intensive carmaker, but fancy technical features are not necessarily marketable offerings or guarantees of sustainable returns, especially when some obstacles are still a long way from being cleared. The E9, for example, can be fully charged within two hours at designated supercharger stations, but the inconvenient truth is that it still takes up to 38 hours to reach the same point if plugged into a household socket, China Business News Weekly reports.

The E9 is expected to hit the road in less than two years’ time, but it seems that BYD has done little to address some basic issues such as the lack of superchargers and long charging times.

Analysts say Tesla and BYD take drastically different approaches to selling e-cars. Tesla appeals to the top end of town by relentlessly branding its sleek, futuristic marques as eco-friendly and elite status symbols. But BYD needs to take things down a notch because it is not in the same R&D and brand allure league as Tesla.

Embarking on a technical arms race could send BYD into a dead end. BYD would be better off steering clear of direct competition and offering distinctive cost-effective models to woo mass consumers less concerned with acceleration, battery energy density and 4WD. When it comes to tech specs, these buyers are more worried about whether the battery can survive harsh conditions.

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EJ Insight writer