The fast-growing electric vehicle (EV) market in the Asia-Pacific region continues to gain further ground. In a filing with the Hong Kong Stock Exchange, China’s BYD, an automaker whose EV output has become a core business of the company, announced that it was phasing out combustion engine-powered vehicle production effective immediately. This move will not entirely eliminate fuel engine production, though, as hybrid EVs require smaller fuel engines to boost vehicular performance.
Reuters reported that the filing, made on 3 April 2022, will help boost the Chinese government’s efforts to maximise the use of green energy in the country by 2030. This is in line with similar global and regional commitments made by several countries across the region, particularly in Southeast Asia. BYD is also a party to an agreement between six of the world’s leading EV manufacturers, including Volvo and BMW, to phase out combustion engine production by 2040.
BYD’s filing also mentions key production figures for March 2022. These unaudited figures show that the company manufactured 106,658 EVs over the past month, compared to 21,492 units the year before, marking a 417% increase. Its EV sales showed a similar story, with 104,878 units sold against 24,218 in March 2021, an increase of 423%. These figures show that the company’s focus on a robust market for clean energy-powered vehicles is meeting a heightened demand for EVs in the market. The announcement is likely to further bolster their ability to provide potential EV customers with more options as countries like China shift to clean energy.
A study by Mordor Intelligence revealed that the Chinese EV market was worth US$124.2 billion in 2021, with COVID-19 and its economic consequences contributing to the weak market. However, the research company predicts that the industry will grow by an average of 30% a year from 2022 to 2027 to around US$799 billion as China’s economy gets back on track and demand for EVs increases. The demand is not just from passenger vehicle consumers as cities endeavour to use EVs as the sole type of public transport vehicle.
The consequences of BYD’s filing may also be more choices for EV customers throughout its existing markets as countries in Southeast Asia move toward clean energy vehicles. While companies like Hyundai and Volvo are opening EV factories in Indonesia and Malaysia respectively, a 2022 report from the Jakarta-based Economic Research Institute for ASEAN and East Asia says that BYD is filling important gaps in the region’s EV market. For instance, BYD is the only major EV passenger car dealer in the Philippines, focusing on plug-in hybrids and battery electric cars.
BYD Co Ltd is a manufacturing conglomerate founded in 1995 and based in Shenzhen, China. It has two main divisions, one dealing with vehicle production and another with electronics. The company claims to be the largest manufacturer of EVs in the world, with product lines including cars, buses and trucks. It has grown to attract attention from some of the most prominent investment companies in the world, including Berkshire Hathaway and BlackRock, which both have small stakes in the company.
The Chinese manufacturing conglomerate BYD announced in a 3 April 2022 filing with the Hong Kong Stock Exchange that it would phase out the manufacturing of combustion engine vehicles in favour of its growing EV line.
The company also reported a massive boost in EV production and sales over the last year, with a 400% growth rate for both.
The company’s total shift to EVs is part of an industry commitment by major EV manufacturers to phase out combustion engine vehicle production by 2040 and helps boost Chinese efforts to shift to green energy by 2030.