China’s BYD Blames Brexit as It Rules Out UK for Europe Car Plant

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The world’s largest seller of electric and hybrid cars has ruled out building its first European car factory in the UK because of Brexit.

China’s BYD has set out ambitious plans to dominate the region’s electric vehicle market this decade, aiming to account for one in 10 battery cars sold by 2030, and wanting to be among the top three EV brands in Europe.

But its European president Michael Shu said the UK did not even make the top 10 possible locations for its first European plant, with a shortlist of sites in Germany, France, Spain, Poland and Hungary.

“As an investor we want a country to be stable. To open a factory . . . is a decision for decades,” he told the Financial Times.

“Without Brexit, maybe. But after Brexit, we don’t understand what happened,” he added. “The UK doesn’t have a very good solution. Even on the long list we didn’t have the UK.”

A BYD assembly line in China. BYD has shortlisted sites in Germany, France, Spain, Poland and Hungary for its European plant, with the UK not even making the top 10 possible locations © AFP/Getty Images

The group, backed by Warren Buffett’s Berkshire Hathaway, wants to raise sales to about 800,000 models in Europe by 2030, with at least one car manufacturing facility in the region. It already makes buses in the region.

The UK has struggled to attract investment from new electric vehicle companies, with Tesla also citing Brexit for its decision to bypass Britain in favour of Germany.

Additionally, several established carmakers in the UK are facing crucial decisions over their plants this year.

BYD, which stands for “build your dreams” and began developing batteries in 1995, is planning a global sales drive in pure electric vehicles. It has set a target of becoming India’s second-largest EV seller within a year.

The company believes that a vertically integrated model, where it makes most parts of the vehicle and completely controls the electronics and battery systems, sets it apart from other carmakers that buy in technology.

In Europe, BYD is looking at both new sites and existing plants to gain a foothold in the region’s “very competitive” car industry, Shu said.

One option is to purchase Ford’s Saarlouis plant in Germany. Shu said the US carmaker was being “very aggressive” in its negotiations, though the two sides have “good communications”. 

A decision is likely this year, with the aim of producing its first vehicles as early as 2025.

The company has sites in China capable of producing more than 1mn vehicles a year and the company may well decide to develop a single megasite in the region to meet its short term needs.

BYD is one of a handful of Chinese carmakers that are hoping to use electric vehicles to break into Europe’s fiercely competitive car market.

It has launched three models in Europe in a handful of markets including Norway and Germany.

It has launched the Atto3 in the UK, a compact sport utility vehicle that is the first model to use its new electric skateboard system that integrates the battery directly into the frame of the vehicle to increase efficiency.

The car is already sold in India and in China, where it has been the biggest selling compact SUV.

The company will run a pilot scheme for its own charging network, because of the “terrible” state of the current infrastructure, Shu said.

Its pilot system will include using static batteries to store energy, allowing them to charge cars quickly without the need for expensive high speed connections to the National Grid.

Shu added: “This is different to the [Tesla] supercharger because Tesla is close to the grid, but we are close to the customer.”

The company has teamed up with existing dealer companies to roll out showrooms across the region, believing this is a better way to reach customers than the direct sales model favoured by Tesla.

It will use Pendragon, Arnold Clark, Lookers and LSH in the UK, it has announced.

The company aims to have up to 100 dealerships in the UK alone by 2030, though it has not come up with a forecast for Europe, Shu said. “We want to have a long relationship with the dealers,” he said.

This means it will have a network of sites that offer servicing and maintenance as well as new sales.

Source: Financial Times