Amidst the high concerns regarding foreign dominance in the Chinese automobile market, a Shenzhen-based automotive manufacturer BYD Co. Ltd. has reportedly developed a new factory to showcase concept cars.
The news comes a week after BYD had secured around USD 3.9 billion from a stock sale, with the company claiming to use the fresh investments to reinforce its EV capabilities in a bid to take on Tesla.
According to industry analysts, most of the Chinese market has been dominated by foreign companies, a problem largely faced by local manufacturers. In addition to this, the automotive chip shortages stemming from the COVID-19 lockdown have also propelled the need to develop a local chip manufacturer.
Sources close to the company stated that BYD’s semiconductor unit will soon be allowed to conduct road tests in the public sector. For those unaware, BYD’s chipmaking subsidiary specializes in producing IGBT (insulated gate bipolar transistors), a vital component used in an electric vehicle’s central processing unit.
Moreover, the company’s battery-making business has given it a competitive edge over its rivals who are facing chip shortage issues and supply chain disruptions, sources claimed. In fact, BYD’s byproducts coincide with chip shortages that have evidently compelled prominent automakers such as Toyota and Ford to cut production.
Some analysts cite that BYD has abundant IGBT chips to cater to its own demand. As a result, the company has largely been unaffected by the industry’s pandemic problem of ordering components and parts from foreign suppliers.
It is also worth noting that developing an in-house semiconductor and battery portfolio requires substantial as well as sustained investments. Sources confirmed that BYD has benefitted from several tax breaks and subsidies apart from Beijing’s recent push for technological self-sufficiency.
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