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MILAN/SHANGHAI – China’s prominent electric vehicle manufacturer BYD is revamping its operations in Europe following a series of strategic errors. These missteps primarily include difficulties in establishing a robust dealer network, hiring executives familiar with local markets, and delivering hybrid vehicles in jurisdictions resistant to fully electric options, as disclosed by six current and former executives from the company.
In response to these challenges, BYD is moving quickly to enhance its presence in this vital export region. This includes diversifying its dealer network and offering attractive compensation packages to attract executives from European car manufacturers, particularly Stellantis, according to sources within the company.
In December, BYD outlined a strategic shift that positions plug-in hybrids as essential to its European operations. This adjustment followed advice from Alfredo Altavilla, a key executive in BYD’s renewed European strategy, who indicated to BYD’s founder and chairman, Wang Chuanfu, that a strategy focused solely on electric vehicles would struggle in several European markets.
“He quickly grasped the message and instructed BYD’s engineering teams that every new model has to be available in both electric and hybrid versions for the European market,” Altavilla shared, emphasizing the need to guide consumers through their transition to greener alternatives.
While individual executive hires have been acknowledged, BYD has openly addressed its difficulties in Germany. This article offers a comprehensive overview of the internal challenges identified by BYD executives and the systematic measures being implemented to rectify these issues. Most of the executives provided insights under the condition of anonymity due to the sensitivity of the strategic discussions.
Although BYD declined to comment on these matters, Altavilla declared in Italy that plug-in hybrids would be central to BYD’s European vision going forward, asserting that it would be imprudent to ignore consumer preferences by exclusively offering electric models.
BYD recruited Altavilla, a former executive at Fiat-Chrysler, last June and made his appointment public in August. His previous role involved advising private equity firm CVC Capital Partners. Under his guidance, several talented managers from Stellantis were brought on board, including Maria Grazia Davino for Germany and central Europe, Alessandro Grosso for Italy, and Alberto De Aza for Spain. The company sought to woo these individuals with significant salary increases and the prospect of career advancement, as noted by a current BYD executive.
“These were valuable employees that we were not pleased to lose,” commented a source from Stellantis familiar with BYD’s recruitment actions.
HIGH EXPECTATIONS
As a testament to its commitment to enhancing European operations, BYD appointed its second-in-command, Stella Li, as the head of the region last year. This shift occurred after Michael Shu, BYD’s former European chief, had predicted that the company would secure at least a 5% share of the European electric vehicle market ahead of the launch of its first manufacturing facility in Hungary this year. However, BYD concluded 2024 with just a 2.8% market share, achieving sales of 57,000 vehicles—significantly less than anticipated.
BYD’s urgency to expand in Europe can be attributed to its remarkable sales trajectory in China, which has surged seven-fold since 2020, reaching 4.2 million vehicles by 2024. BYD overtook Tesla last year to become the leading electric vehicle seller worldwide and is currently the sixth-largest automaker globally.
The company is also facing increasing competition from other Chinese manufacturers eager to penetrate the European market, such as Chery, Geely, Xpeng, and Changan. All Chinese automakers are under pressure to achieve growth in international markets to sustain profitability, especially given the ongoing price competition within the domestic EV sector.
Industry observers and partners have noted BYD’s recognition of its challenges in Europe and its intentional moves to rectify them. “They are taking this matter very seriously, although they must realize that establishing a foothold in Europe will take time,” remarked Tim Albertsen, CEO of Ayvens, a major leasing company in Europe and a partner of BYD. “Just as European or American automakers need time to adapt when entering China, the same goes for Chinese companies in Europe.”
Signs are emerging that BYD’s renewed focus on Europe is beginning to yield positive results. The company’s sales across Europe, including the UK, have surged more than threefold in the first quarter of 2025, reaching over 37,000 vehicles compared to around 8,500 during the same period in 2024.
BYD’s success in China can be attributed in part to its agility in responding to consumer preferences, noted Bo Yu, the country manager for research firm JATO Dynamics. For example, BYD recently captivated the Chinese market by offering “God’s Eye” assisted-driving technology for free across its vehicle range, including models priced below $10,000.
At the recent Shanghai auto show, BYD presented an expansive exhibition of vehicles under four distinct brands that overshadowed many competitors. The display included a range of models, from the affordable Seal 06 and Sealion 06, starting at about 100,000 yuan ($13,700) and 160,000 yuan respectively, to the luxurious Yangwang U8L, a three-row SUV, and the Denza Z, a high-end sports car concept.
LACKING LOCAL KNOWLEDGE
After a swift ascent in China, BYD launched its European operations in 2023 with ambitious goals. The former European chief, Shu, stated last May that the company aspired to be the top seller of electric vehicles in Europe by 2030.
However, current and former managers assert that BYD failed to adequately analyze the diverse European markets prior to its launch.
As an example of this oversight, BYD secured a costly and prominent sponsorship for the Euro 2024 soccer championship in Germany, branding itself as the leading “NEV” maker— a term commonly used in China that refers to both electric and hybrid vehicles but lacks meaning for German consumers.
Additionally, the original dealer network was deemed insufficient, being both too limited and overly concentrated in major urban areas, according to BYD insiders.
Recognizing the need for expansion, BYD now intends to increase its dealer presence in Germany from 27 to 120 locations, as disclosed by Davino in March. As Europe’s largest automotive market, Germany recorded sales of 2.8 million vehicles last year, whereas BYD’s sales there fell short at under 2,900 cars in 2024. “Germany is a challenging market,” Davino acknowledged. “We still lack basic infrastructure.”
Former managers indicated that BYD’s primary error before its European launch was treating the continent as a single market akin to China or the United States, rather than acknowledging the multitude of distinct national markets. One ex-manager articulated this complexity by likening European markets to “frogs in a pan,” each jumping in varying directions, stating, “BYD is only just starting to understand this.”
Source
finance.yahoo.com