BYD’s bold voyage: breaking into shipping

BYD, the Chinese electric vehicle (EV) maker, is diversifying its business by entering the sea freight industry. The company has assembled a fleet of at least eight car-carrier ships to transport its EVs from Chinese factories to European, South American, and other markets. BYD’s move into shipping comes as its sales of EVs soar overseas. In 2023, the company sold three million electric cars and plug-in hybrid models, making it the world’s top-selling EV company in the fourth quarter of that year. While the majority of BYD’s sales are in China, its export business has been expanding significantly. However, the lack of car-carrier ships worldwide has been a barrier to growth, with rising costs to hire these ships due to a bust cycle in the international shipping industry since 2008, technological challenges in making ships greener, and existing vessels being reserved by automakers in other countries. BYD’s entry into the shipping industry follows a similar movement by other Chinese automakers such as SAIC Motor. While the move appears promising for BYD, there are potential risks involved, as demonstrated by a failed attempt by another Chinese car company, Chery, to build its own car-carrier ships in the 2000s.+