BYD’s gas-guzzler halt leaves major loophole

A BYD e-SEED GT concept EV is unveiled on the stage during the Shanghai autoshow, in Shanghai, China April 16, 2019. Picture taken April 16, 2019. REUTERS/Yilei Sun

HONG KONG, April 4 (Reuters Breakingviews) - China’s BYD (002594.SZ), (1211.HK) on Friday said it has stopped making vehicles powered only by internal combustion engines. But it’s not sending gas-guzzling motors to the scrap heap yet: sales of its hybrid cars are revving up, growing 857% to 141,514 in the first quarter compared with the same period last year. That means hybrids accounted for nearly half of BYD’s passenger vehicle sales in the period.

Automakers including Toyota (7203.T) read more have found the transition technology a lucrative niche. BYD’s Qin and Song models are an easier sell for customers who can’t or won’t go all-electric. Their popularity helped the Warren Buffett-backed brand be the world’s best-selling maker of new energy vehicles – a term that covers hybrids as well as pure electric cars – in the first two months of 2022, per Bernstein, with 16% of market share, versus Tesla’s (TSLA.O) 13%.

However, policymakers in Beijing back battery power to cut carbon dioxide, and hybrids bloat BYD’s average new energy vehicle emissions. Even Li Auto (2015.HK) – the $27 billion Chinese brand built on hybrids – plans to launch all-electric models soon. BYD’s joyride may not last. (By Katrina Hamlin)

(The author is a Reuters Breakingviews columnist. The opinions expressed are their own.)

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