BYD’s battery technology gives its electric vehicles a global advantage

On the summer, BYD began shipping electric vehicles to Norway, a country that has seen rapid growth in demand for battery-powered cars. The Chinese automaker is able to capitalize on its local battery technology which allows production costs much lower than its competitors, and it is targeting other global markets as Chinese electric vehicles (EVs) are on the verge of dominating. potentially the global industry.

BYD debuted in the mid-1990s as a producer of lithium batteries for consumer electronics and today operates its own battery technology in its line of electric vehicles, reports the Financial Times.

The battery technology used by BYD uses components that are cheaper than industry standards for cobalt and nickel, instead building their batteries with much more abundant sources such as iron and lithium. In addition, the signature battery design form, nicknamed the “blade”, combined with the materials, means that the battery can hold 50% more energy than similar sized batteries.

Reduced battery components and costs translate into big savings; BYD currently offers electric cars at a lower price than the combustion competition. This is a major turning point for the industry, as cost has been a major barrier to accessing EV ownership for many consumers.

“It is easier for Chinese electric vehicles to succeed than Chinese internal combustion cars, because European and American automakers have a long history in manufacturing engines, it is difficult for Chinese automobile manufacturers to catch up on the overnight, ”said Ji Shi, analyst at Haitong International Securities in Hong Kong. “But electric vehicles are different because they are simpler in structure and Chinese automakers have better supply chains in terms of batteries.”

China now dominates the electric vehicle battery market, with BYD being one of the main competitors. BYD is said to be in talks to supply Tesla with batteries and to enter into a joint venture with Toyota.

“We are in the early stages of transforming China into an automotive export market, selling cars overseas, especially electric cars,” said Sam Jaffe, Managing Director of Cairn Energy Research Advisors. “And BYD is in a very good position. These batteries bring electric vehicles to the mass market much faster. “

KARS harnesses the growth of electric vehicles

The ETF KraneShares Electric Vehicles and Future Mobility (NYSE: KARS) invests in BYD and many global leaders in the electric vehicle industry, including some in China, where the electric vehicle industry is booming.

KARS measures the performance of the Bloomberg Electric Vehicle Index, which tracks the entire industry, including exposure to EV manufacturers, EV components, batteries, hydrogen fuel cells and materials raw materials used in the synthesis of the production of parts for electric vehicles.

The index has strict qualification criteria. Companies must be part of the Bloomberg World Equity Aggregate Index, have a minimum free float market capitalization of $ 500 million, and have a 90-day average daily traded value of $ 5 million.

BYD is carried by KARS at a weight of 2.21% and the ETF has an expense ratio of 0.70%.

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