The ‘nutty’ professor behind rise of China’s electric vehicle giant


Wang Chuanfu is not afraid of throwing investors curveballs. In fact, the Chinese billionaire appears to relish it.

Twenty years ago, Wang unveiled plans for his BYD group to buy a failing state car manufacturer that had attempted to develop a sideline in making missiles.

His logic: rip out the petrol-guzzling internal combustion engines from the cars and replace them with batteries. For BYD shareholders who thought they had invested in a more humdrum maker of batteries for mobile phones, the strategy “seemed loaded with nutty ambition”, according to an analyst.

But six years later, Wang pulled off a coup when Warren Buffett invested $232mn in BYD. This week, Wang’s vision — and Buffet’s bet — was validated when BYD snatched Tesla’s crown as the most popular maker of battery-driven cars.

Half-year sales figures showed that BYD — short for “build your dreams” — sold more vehicles than Tesla. About half the cars currently sold by BYD are plug-in hybrids that China counts as “new energy vehicles” alongside pure battery and hydrogen-powered models.

In dethroning Elon Musk, Wang also achieved what General Motors, Ford and Volkswagen have all failed to do.

“Even Musk underestimated him,” said Tu Le, managing director of Beijing-based consultancy Sino Auto Insights. “But there is no doubt that his ambition equals his peers or competitors.”

BYD’s success has propelled the Shenzhen-based company, still little-known outside China, to the front lines of a battle for survival among carmakers as more of the world’s vehicles are electrified and automated.

Wang, who last year ranked as the 22nd richest person in China with a fortune of more than $25bn, is at the heart of an intensifying competition between China, the US and Europe over access to resources, control over supply chains and ownership of consumer data that will shape the future of the car industry.

The 56-year-old, who has carefully aligned himself with the long-term policy ambitions of Beijing under president Xi Jinping, must also continue to navigate what can be a highly political and unpredictable business environment in China.

It is a sharp contrast to his upbringing, which according to biographical notes published by Beijing research group Gavekal, was far from affluent as the second youngest in a family of eight children in Wuwei county, in the eastern Anhui province.

After the death of his parents, his siblings’ hopes for social advancement fell on Wang’s promise as a student. He earned a place at a research institute for non-ferrous metals in Beijing, first to study, then to teach. In Beijing, an idea began to percolate: China’s nascent battery producers could — and should — compete with Japan.

Frustrated by the lack of dynamism at the state-run organisation, in the mid-1990s Wang relocated to Shenzhen, southern China, just as it was transforming from a sleepy fishing village into a global manufacturing hub. The mass migration from rural areas gave the city’s factories the cheap labour they needed to compete with rivals in Japan, Korea and Taiwan.

A BYD Seal electric car on display at an international motor show in Shenzhen in June © Stringer/Anadolu Agency via Getty Images

While Wang is prepared to defy convention, in the two decades that followed BYD in some ways stuck to a well-worn path among successful East Asian corporates of tearing apart Japanese and US products and finding ways to replicate the underlying technologies. Like many Chinese manufacturers, the group has denied numerous claims of intellectual property theft.

However, Wang and his top lieutenants told a group of academic researchers in 2018 that it was during BYD’s early years, making batteries and other components for Siemens, Nokia and Motorola, that the company was handed a key lesson in manufacturing. Seemingly minor, innocuous problems in small components, when multiplied across a vast number of suppliers, had a cumulative effect: phones did not work.

As a result, BYD set about a process of mastering technologies from its finished batteries all the way to the lithium and nickel mines.

Today, BYD’s vertical integration — controlling the supply chain from the minerals to the computer chips used in vehicles — is regarded by industry executives and analysts as world class.

Rival carmakers have for several years been frustrated by logistics bottlenecks and shortages of key parts. BYD, meanwhile, has produced its own auto chips and sold its own batteries to rivals, including Tesla.

Many among Wang’s billionaire class built their empires on the back of property and infrastructure development, which required both debt and political connections.

Since Xi took power in 2012, China has stepped up efforts to reduce its dependence on key imports, including oil and computer chips. Xi has also made the development of clean technologies a national policy priority with implications for the country’s security.

“Our assessment is that Wang enjoys a favourable relationship with the Xi administration due to his strong investment in Chinese industry, particularly the high-tech sector, especially given rising geopolitical tensions,” said Alex Payette, chief executive of Cercius Group, a consultancy focused on Chinese political risk.

Wang’s importance to Xi’s ambition stems, in part, from BYD’s position as China’s second-biggest producer of EV batteries behind CATL. It is also among the lowest-cost manufacturers of EV cars and batteries, according to research from Bernstein.

As a leader, Wang has been hailed by employees for his own relative austerity and work ethic, as well as rewarding loyal staff with stock options. BYD has minted several billionaires among his top team who have been with him from when he founded the group in 1995 at the age of 29.

“He has said that there is no such thing as work-life balance for his generation of Chinese business leaders,” recalled one car industry executive who has met him several times. “He works all the time.”

Yet Wang has also demonstrated a ruthless streak — not an unusual trait among the heads of family-owned business empires across Asia. He is referred to internally simply as “the chairman”.

“Our company has only one voice and it cannot have another,” he once told a Chinese business magazine.

Despite selling more vehicles than Musk so far this year, many analysts believe that Wang is still to be fully tested, especially as China’s carmakers launch an aggressive push to prise open overseas markets.

BYD sales have predominantly been low-cost models to the Chinese domestic market. Deepening the challenge facing BYD, the US and allies are ratcheting up sanctions against Chinese companies amid fears over their rising global technological dominance and links to the People’s Liberation Army.

Yet those who have followed Wang’s rise caution against betting against “the chairman”.

“He is the quiet, unassuming genius that you might walk by in the street without noticing,” said Michael Dunne, a former GM executive and China industry expert. “That would be a mistake.”

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