BYD is Expected to Challenge Its 5-6 Million Sales Target by 2025
Citi has published an update on BYD's business outlook and operational strategies following a meeting with the company's management. According to the report, the electric vehicle manufacturer is expected to challenge its sales target of 5 to 6 million units for 2025.
BYD's management anticipates that international sales will double on a yearly basis and contribute significantly to this ambitious target. Current stock levels at BYD are just over one month, indicating a noticeable improvement compared to stock levels of 2.0 to 2.5 months recorded at the end of 2023 and the beginning of 2024.
This healthier stock position suggests increased operational efficiency and readiness to meet market demand. Despite the rising number of competitors launching new energy vehicle (NEV) models to compete with BYD, the company management remains confident in increasing sales volumes by capturing market share from traditional internal combustion engine (ICE) vehicles.
Additionally, BYD plans to shift its focus towards higher-end brands and products by 2025. In terms of production capacity, BYD's management reports that the current monthly vehicle production capacity is approximately 540,000 units, equating to an annual capacity of 6.5 million units at maximum output.
On the battery production front, as of early 2024, the annual capacity is around 300 gigawatt-hours (GWh). This capacity is sufficient to support the production of 7.5 million vehicles based on an average battery size of 40 kilowatt-hours (kWh) per vehicle. Regarding overseas production, BYD commenced production at its Thailand factory in July 2024, with monthly production expected to reach 4,000 units by November 2024. This facility is designed with an annual capacity of 150,000 units.
The company is also planning to expand its international manufacturing footprint with a factory in Brazil, expected to start production in the third quarter of 2025 and to have an annual capacity of 150,000 units. Additionally, plans are in place for a factory in Hungary to begin production in 2026, with an expected capacity of between 150,000 and 300,000 units annually.
As observed in industry reviews, BYD began offering cash discounts on selected models in December 2024. This move is seen as a market share preservation strategy without an official discount on the manufacturer's suggested retail price (MSRP). In the area of Advanced Driver Assistance Systems (ADAS), BYD's management aims to keep the cost of ADAS hardware at 10% of the vehicle's price, making these features more affordable for customers.
For its lower-tier brands, BYD plans to equip vehicles with an in-house developed ADAS solution, ensuring that safety and technology features are accessible across its entire product range.