BYD vs. NIO: Must-Know Facts
BYD and NIO have taken different trajectories over the years, but there is no denying their significance in the electric car market. Both companies are in a fast-growing sector involving innovation and sustainability and, as such, have a few similarities worth mentioning.
- BYD expanded by scaling the value chain beginning with the electric bike, bus, and eventually car.
- NIO’s main competitors are NIO include Tata Motors (TTM) and Li Auto (LI).
- BYD itself develops its advantage on a low-cost R&D strategy.
- NIO has performed well on Chinese and U.S. equity markets.
China is one of the largest electric car markets in the world, considering the past three decades have witnessed tremendous growth in the technological and automotive sectors.
The population is also keenly invested in domestic brands, hence the success of BYD and NIO. Both are popular Chinese EV brands that have gained significant traction in recent years and have tremendous potential for expansion.
However, they do not share the same approaches to the market, nor do they have the same origin story. Analyzing their differences could reveal which is the better option at present or which option would best cater to a customer’s needs.
BYD vs NIO: Comparison Table
|Market capitalization||$844.73 billion||$35.58 billion|
|Year and Month founded||February 1995||November 2014|
|Short history||The company was founded in 1995 and began as a battery maker before entering the automotive sector in 2003. BYD expanded by scaling the value chain, starting with electric bikes before moving on to buses. They reverse-engineered products from other brands and sold them as their own.||NIO began as an electric car company in 2014. It is headquartered in Shanghai and was tailored for specific upscale markets. The first NIO was the EP9 Supercar, produced in 2016, and they have since made five other models.|
|Founder||Wang Chuanfu||William Li, Lihong Qin|
|Best-selling models||NIO ES6, NIO EC6, and NIO ES8||BYD Qin Plus DM-I, BYD Song DM, BYD Han EV, BYD Tang DM|
|Cars sold 2021||12,961||721,328|
BYD vs. NIO: What’s the Difference?
Both companies have succeeded in the Chinese market because of their innovation and resource implementation. The electric vehicle market has also been rapidly expanding because of increased demand for new sustainable cars from the customer base. Even so, BYD and NIO have led different paths in their quest to capture the imaginations of Chinese consumers.
The first noticeable thing about both companies is how they started out. BYD did not initially have the intention of selling electric cars. Conceived in 1995, BYD quickly became an expert in rechargeable batteries and advocated for renewable energy solutions. It made the first smartphone batteries for Motorola and Nokia before scaling up the value chain.
BYD started with electric bikes before moving on to mopeds and, eventually, electric buses. Their approach was to reverse engineer the designs used by other brands, improving them and innovating new ones for mass production.
The great thing about this is that BYD used its supply chain to assemble new products for sale. When it started manufacturing electric cars, for example, its rechargeable batteries were sourced from its factories.
NIO was founded much sooner in 2014 by William Li, who aimed to create a futuristic brand. The logo features sky and earth, representing the company’s commitment to a better future. Sky illustrates vision, while earth illustrates action, direction, and momentum for the future.
NIO made its first model, the EP9 Supercar, in 2016. The California Department of vehicles also allowed the company to begin testing its cars on public roads. During its short eight-year history, NIO has not deviated from its objective to provide the market with premier electric vehicles.
BYD, on the other hand, gradually evolved to include automotive manufacturing, but that was not it’s original offering.
BYD started as a battery manufacturer before moving on to automotive technology. Throughout its life, the company has focused on improving technologies and innovating design for more sales.
BYD president Wang Chuanfu indicated that the company not only sells cars to business customers but also seeks a more prominent presence within the customer-facing market. They also strive to improve customer loyalty among current BYD clients.
It is possible to assess BYD’s customers as well by looking at the best-selling models. These include the BYD Qin Plus DM-I, BYD Song DM, and BYD Han EV. Except for the Han EV, a luxury sedan, the Qin and Song are electric models priced below $28,000.
NIO’s first model, the EP9, made a significant impression on the market, considering it is a $3.48 million supercar. The EP9 is technically not a road-legal vehicle, but it set the tone for NIO’s models and the target market. NIO’s first mass-market electric car was the 2017 ES8, a seven-seater electric SUV.
The following year NIO made the ES6, a high-performance electric SUV. Both do not hold a candle cost-wise to the EP9, but they cost over $50,000. An NIO, then, is not exactly a cheap car. In fact, owning an NIO in China is akin to joining a membership.
There are NIO owner clubs the same way there are Tesla chat groups. The NIO app also offers human assistants for owners so they can get a curated experience. BYD may prioritize technology, but it has focused on giving the market sustainably priced electric vehicles, so the goal has been to sell to every demographic. NIO has not taken the same approach as its offerings have been to the high-earning groups.
As a premier electric vehicle manufacturer, NIO has focused on one specific customer base: the Chinese affluent. They have been successful in this endeavor, as the company sold 50,000 EVs before 2020. Lihong Qin, one of the company founders, stated it is the first time in history that a Chinese domestic brand has achieved these sales numbers.
However, NIO has only specialized in providing the market luxury sedans and SUVs. There may be plans to broach other customer bases, but this is still in the planning stages.
On the other hand, BYD has not only considered every consumer group but began in a different industry. It invested in batteries, assembly lines, and the fabrication of semiconductors. BYD became self-sufficient when it branched into the automotive industry.
Therefore, BYD has diversified its operations to include most parts of the electric vehicle, parts supply, and assembly. NIO has only focused on assembling its cars, but parts like its batteries or chips are made by CATL and Qualcomm, respectively.
BYD and NIO have made a significant impact on the electric vehicle segment. Their presence is not limited to the Chinese scene as BYD, for example, has expanded its operations and models to more than 50 countries globally. In Singapore, BYD is championing the use of electric taxis and other public transportation services.
NIO may not have expanded as much as its competitor, but it does have operations in Europe. The company currently sells cars in Norway, with plans to launch in Germany, Sweden, and the Netherlands. In February 2022, the chief executive, William Li, announced that NIO would provide services to over 25 countries and regions.
BYD company stock has been able to improve significantly because of the performance of its underlying businesses. For example, during the chip shortage crisis, it was not as affected as much as other companies, because BYD makes its own chips. It may be a mature automaker, but BYD has steadily grown its revenue.
In the first half of 2021, BYD reported a revenue increase of 53%. This should translate to growth operations in the long run. BYD is also gradually expanding its footprint to every continent. The first batch of electric BYD Han models arrived in Mexico, Colombia, Uruguay, Brazil, and Costa Rica in 2021. Similar plans are being made for the United States and other markets.
NIO is the younger company and hence less stable but has been able to grow significantly. The strategy mirrors Tesla’s by initially offering high-end models for wealthy customers before producing more affordable but premium options.
It has paid off, considering NIO doubled its production from 43,728 units in 2020 to 91,429 units in 2021. The company’s aspirations to tackle the European market before selling in the United States and South America should make it one of the leading players in the electric vehicle sector.
Both companies have integrated apps
BYD has several software solutions like BYD_EnergyMS, a high-efficiency energy monitoring application. It is for users to check the product’s real-time performance remotely.
BYD also recently launched an Auto app that would combine cloud services, BYD Mall, BYD Club, and other platforms into one entry point. The goal was to increase customer loyalty and turn the platform into a community.
NIO’s app, though, is more advanced as it integrates functions and allows users to speak to human assistants. NIO owners can browse e-commerce stores and access a user forum to engage with others. BYD and NIO are sure to make developments to the software packages as they continue expanding their reach.
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