Key Takeaway
BYD employs a vertical integration strategy, manufacturing about 75% of its vehicle components in-house, including Blade Batteries and electric motors. In contrast, Tesla’s Model 3 produced in China has an estimated 46% in-house component share. BYD Semiconductor is developing AI chips with performance capabilities of 80 trillion operations per second, aiming to compete with Nvidia and Horizon. The company has partnered with TSMC and MediaTek to create a 4-nanometre smart cockpit chip. An internal analysis suggests that a BYD car comparable to the Model 3 costs 15% less to produce than Tesla’s vehicles from its Shanghai gigafactory.
BYD’s Vertical Integration Strategy
BYD currently produces approximately 75% of its vehicle components in-house, including its ‘Blade Batteries’, electric motors, and power electronics.
This is in contrast to an estimated 46% in-house component share for Tesla’s Model 3 manufactured in China, as reported by investment bank UBS.
The company’s subsidiary, BYD Semiconductor, is also developing custom AI chips, boasting a performance of 80 trillion operations per second.
These chips are being designed to compete with products from Nvidia and Horizon, making fully domestic production a more feasible option for the Chinese company.
To support this initiative, BYD has partnered with semiconductor manufacturers TSMC and MediaTek to create a 4-nanometre smart cockpit chip.
An internal analysis of the firm’s manufacturing processes indicates that “a BYD car, comparable to the Model 3, costs 15% less than production at Tesla’s Shanghai gigafactory”.
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