Numlock Sunday: Zeyi Yang on BYD
By Walt Hickey
Welcome to the Numlock Sunday edition.
This week, I spoke to Zeyi Yang, who wrote “Why the world’s biggest EV maker is getting into shipping” for MIT Technology Review. Here's what I wrote about it:
BYD is a Chinese electric car manufacturer that has become a reluctant entrant into the global shipping industry. The car manufacturer is building a fleet of roll-on, roll-off (RORO) shipping vessels, the first of which, BYD Explorer No. 1, having entered operation connecting China to European markets with 5,000 cars aboard. It’s in part because vehicle exports is simply a new game here: BYD shipped 55,000 vehicles overseas in 2022, which jumped to 240,000 vehicles in 2023 and is poised to go higher if only BYD can obtain the means by which to actually ship the cars. RORO vessels have been a bit rare to come by because of knock-on effects of the 2008 recession, and typically vehicle manufactures will own their own RORO fleets, like Nissan and Toyota. Prices to rent ROROs jumped to $115,000 per day in 2023, up from $17,000 in 2019, hence the need to build some boats.
I loved this because I had increasingly been seeing BYD mentioned in the news, and I wanted to talk to someone who had covered this world extensively for the past several years.
We spoke about why BYD is compelling, what their actual business has become, and what it means for the global car business.
Yang can be found at MIT Technology Review and on Twitter.
This interview has been condensed and edited.
Zeyi, thank you for coming on.
Thank you for inviting me.
Yeah, I've been following your work for what feels like a very long time now. You write about such a really interesting part of, you know, I guess industry and technology and green tech, too. The reason that I wanted to talk to you is because you wrote this really fascinating story about this Chinese company called BYD. And I've been seeing more and more about this specific firm in the past few years, and you know, part of that I think is because they've been exporting more and more. Do you just kind of want to take a step back and talk a little bit about what this company is and kind of what role it's starting to play in global commerce?
Oh yeah, of course. So, BYD is this Chinese automaker. They used to produce gas cars and they were not very good at it. They were kind of the butt of the joke for a long time in China. But then, I think like more than a decade ago, they started pivoting toward electric cars. They were producing plug-in hybrid cars. They were producing pure battery cars.
And fast forward to today, they are now the most prominent, top-selling electric vehicle brand in China. And they are also increasingly exporting their cars all over the world. And I think that's why their global image has really improved a lot in the last few years.
Yeah, it kicked off. You had a few numbers about just how much their exports have increased. But it's like, you know, a multiple of what it was year over year.
Totally. I think for a few consecutive years, their export numbers increased fourfold, like quadrupled. It's kind of crazy to see that you can keep this growth for two years and maybe even more. So, yeah, they definitely show some really strong growth.
Yeah. I guess, what makes them attractive to customers? What makes them unique compared to, you know, a Tesla or any of these other kinds of offerings?
Yeah, so I think right now, internationally speaking, there aren't too many electric vehicles being offered in the market, right? So people are usually considering Tesla, some of the traditional automaker brands, and then a lot of the Chinese EVs, they're being sold overseas. And Tesla is still somewhat of a luxury brand.
Yeah.
So you're thinking of a premium price to get a Tesla compared to a lot of the BYD vehicles actually much cheaper than that. And they still offer a pretty good battery range. They offer pretty good quality of the build. So if you are not someone who's willing to spend a ton of money on your car, and you do want to go and try out an electric vehicle, something like a BYD vehicle will be a much easier kind of entry vehicle to this field.
Cool. One very fun part of this story, one reason that I wanted to have you on, was that it also revealed something fascinating just about how cars are shipped, and just how it's different than how other goods are shipped. Do you want to talk a little bit about that? Because that genuinely was fascinating to me.
Of course, I completely learned about that during the reporting of this story. I mean, when you think about, like, ocean shipping, just think about all those big container boxes, right?
Yeah.
And those boxes need to get on and off the boat. But the thing with cars is that when you're putting it into a container box and lifting it up, there are a lot of things that could go wrong and damage the car. So it was actually safer, and it was actually more, I guess, space-saving, to say you just drive the car onto the ship, and then the ship will have multiple layers, kind of like a vertical parking lot.
And then this is why these specific kinds of ships are called roll-on, roll-off ships. They're built for you to transport cars, or those construction vehicles — everything that has wheels and can be driven directly onto the boat. So that is how the car industry has traditionally been transporting these cars to another country across the ocean.
And what's happening with BYD is that they are growing more and more important in terms of global car trade, but they haven't really had the capacity to ship these cars abroad. So BYD, they are trying to charter ships and buy ships, especially this kind of roll-on, roll-off ship, so they can make sure their cars can actually be delivered to the customers that are not in China.
Yeah. It's just such an interesting thing because it feels so ancient. I thought the reason that we had shipping companies was that, no, it makes sense for shipping companies to handle everything. But like you were writing, of course Hyundai and Toyota just own a fleet of ships in addition to making cars.
Yeah, I mean, it definitely makes sense when you’re at their level, when you’re selling like hundreds of thousands of cars every year, you don't really want to rent a ship every time you sell them, right? You kind of want to have a little bit more control there.
And the other thing is that, as I mentioned in the story, over the past few decades the global shipping industry was kind of in a bust cycle because of the 2008 financial crisis. So there weren't that many ships going around, and also because in recent years there were more Chinese companies, for example. So there's a lot more demand than there is supply for car shipping.
And then that is why if you are a company like Toyota, and you have your own boat, you don't really have to worry about competing for the ships with other companies. But the Chinese companies, they don't have boats, and they will need to find shipping companies to work for them.
Yeah, it's just a funny situation where sometimes you get so good at making cars that all of a sudden you need a navy.
Yeah, that's definitely what they are coming out with now, basically.
So I guess just backing out a bit, you cover Chinese tech for MIT Technology Review. It’s been a pretty compelling beat for a few years now, because there have been some geopolitical flare-ups as well as some tech innovation stuff going on. What are some other companies that you’ve been covering that you’ve found particularly interesting lately?
I mean, one thing is that with the rise of ChatGPT and one of the first language models, a lot of people are also paying attention to what's happening in China, right?
Yeah.
Because a lot of the Chinese tech companies have been sort of similar, but not really comparable, not at the same level of capacity when it comes to AI. So in this sense, we're talking about like Baidu, which is a traditional tech giant, and it's one of the companies that have invested AI in both. But they also, like there are a lot of AI start-ups. Like iFlight tech, things and companies that weren't really that common, I would say two years ago, but now a lot of people are talking about them to see whether they can produce some AI product that's even better performing.
So AI would definitely be one of the skills that I'm focusing on a lot. And the other one, as we're talking right now, is green tech and more specifically electric vehicles. Because China has really, really encouraged us to do that in terms of electric vehicle production markets and just really everything about it, including the battery production. So, BYD, other car companies like NIO, Xpeng, they started a car company. They are very popular in China, but they're also trying to export overseas. And then there’s also I guess CATL, which is the battery company, who's really the largest electric vehicle battery maker in the world. And they might work with Tesla soon, too. So yeah, it will be interesting to follow, I guess.
Yeah, it’s been very excited to watch. And again, like this BYD story, I think I had first heard of this company from reading your work and now it just feels like I’m seeing it everywhere, so thank you for doing some early reporting on this kind of stuff. It’s so informative.
Thank you. And I think you will hear about it more because, I mean, they actually have been in the United States for a really long time, but they were making electric buses. And I guess buses are just not very, I don't know, interesting for people to talk about all day. And their passenger cars are available here, too. But I definitely think that maybe one day, when they're so popular and when they're selling to everyone — like, they are already selling to Europe and South Asia and Southeast Asia and South America — maybe one day, they will come to North America, too. And then, yeah, everyone will start hearing about their names.
No, that's so interesting that they are a big force in buses. That's not a very known, like, you know, consumer niche. But obviously, that's a cool business.
I guess the reason why we were selling buses and not selling to individual customers is that it’s probably easier to convince like a government or busing company to buy a fleet of buses when people don’t trust electric vehicles so much. So that's actually how they got their first, like, head start into the electric vehicle space. And then they go, oh, yeah, we can also use the cars and convince people to buy them and drive them. And they pull that off. So, yeah, they started with buses, but now they're in passenger cars, too.
Fascinating. And now they're in ships, too. That's very fun.
Yeah. I mean, the company actually talked about in their press release that, oh, we're going to put our battery tag to use for our ships, too. But I feel like that is still very aspirational right now.
Yeah.
This ship is still powered by just the traditional fossil fuel options, or like LNG, the natural gas. So it will take a long time for battery-operated big ships to appear, but maybe they’ll get into that, too.
Well, that's fun. All right.
So where can folks find you? Where can they find your work? What's got you interested now?
Oh, yeah. So I write a newsletter for MIT Technology Review. It's called China Report. It's published every Tuesday, and it streams.
Yeah, I'll link out to that, that’s great.
I am still on Twitter, even though I spend less time there. So if you want to kind of talk to me, that would be a very easy way to reach out.
Amazing. Well, actually, tell me a little bit about the newsletter before you go. That sounds very cool.
So every week, there is a main story, kind of, like what is happening, or maybe something I’ve worked on lately, or this is what we're talking about in China right now. And then, often, there are sections of, like, this is the technology news coming out of China this week, and there's one dedicated section to translate a story from China every week.
And then, every week, I usually end it with a little joke, and I'm pretty proud of the last section. We call it “one more thing,” and, yeah, I love my jokes.
Amazing. Okay, cool. I'll be sure to link that out. Well, thank you so much for coming on.
No, thank you so much.
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