A partnership between ride-hailing giant Uber and BYD is a boost for the world’s largest electric vehicle (EV) maker’s expansion plans, following punitive tariffs levied by the US and the European Union (EU) on Chinese car exports.
The Shenzhen-based BYD will supply 100,000 EVs to Uber globally, the two companies said in a statement on Wednesday evening. The cars will be introduced to markets including the Middle East, Canada, Australia and New Zealand.
“The companies aim to bring down the total cost of EV ownership for Uber drivers, accelerating the uptake of EVs on the Uber platform globally, and introducing millions of riders to greener rides,” Uber said.
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It is the largest supply contract BYD, which counts Warren Buffett’s Berkshire Hathaway as a minority shareholder, has secured outside mainland China since 2022, as its cars have become increasingly popular around the world because of their affordability and battery performance.
BYD and its domestic peers are now grappling with trade barriers in developed markets after authorities in the US and the EU slapped punitive tariffs on Chinese-made EVs to protect their own car industries.
In May, the White House announced a quadrupling of tariffs on Chinese-made EVs, which now stand at 100 per cent. In July, additional duties of 17.4 to 37.6 per cent came into effect provisionally in the EU.
Uber said the partnership will “offer drivers access to best-in-class pricing and financing for BYD vehicles” on its platform, adding that the companies’ joint efforts may also include discounts on charging, vehicle maintenance, insurance and lease offers based on market conditions in different regions.
They also said they will collaborate on future BYD autonomous-capable vehicles to be deployed by Uber.
“The deal reflects Uber’s endorsement of BYD’s vehicles and opens the floodgates for other fleet businesses for the Chinese carmaker,” said Qian Kang, who owns car components businesses in Zhejiang province. “It somewhat dispels the gloom in China’s electric car sector, which is mired in overcapacity.”
In October 2022, BYD formed a partnership with German car rental company SIXT, which agreed to buy 100,000 EVs from the Chinese carmaker over several years.
BYD, known for its battery-powered cars that are priced around 100,000 yuan (US$13,830), dethroned Tesla as the world’s largest EV maker in 2022 by unit sales, with most of its sales derived from the mainland.
The company’s blade lithium-iron-phosphate battery packs have been well received by mainland Chinese drivers and car assemblers. The battery cells are arranged in a way that increases energy density while enhancing resistance to overheating.
BYD has accelerated its internationalisation pace since 2023, actively promoting its vehicles in markets like Southeast Asia and Latin America.
Last year, the company exported 242,765 units, or 8 per cent of its global total. Exports jumped 334 per cent from 2022.
In March, Wang Chuanfu, chairman and president of BYD, told an investors’ conference the company expected to deliver 450,000 units to overseas customers this year, an increase of 85.4 per cent year on year.
HSBC said in a research report the same month that exports made a disproportionately higher contribution to BYD’s earnings because of higher margins and a more favourable pricing environment.
Chinese carmakers have a huge cost advantage over their global rivals in building EVs, with a fully developed supply chain driving its strong manufacturing heft, according to Stephen Dyer, Greater China co-leader and head of Asia automotive practice at global consultancy AlixPartners.
A Chinese-made EV costs 35 per cent less to produce than those from other carmakers, he said last month.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP’s Facebook and Twitter pages. Copyright © 2024 South China Morning Post Publishers Ltd. All rights reserved.
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