From BYD's Thailand factory, we can see that China's new energy vehicles are going global. The globalization of the industry has spread like wildfire.

On July 4, BYD Chairman Wang Chuanfu traveled to the Thai factory to attend the company's 8 millionth new energy vehicle production ceremony.

In 2021, the number was only 1 million, and three years later it soared to 8 million. It is worth celebrating, but why was Thailand chosen as the location?

91che believes that this is actually BYD actively sending a signal to the world: globalization, here I come.

It is not new for Chinese car manufacturers to invest and start businesses overseas, but BYD's factory includes the four major processes of the whole vehicle, as well as a parts factory, which is equivalent to bringing a complete new energy industry chain to the entire Southeast Asia region.

The current situation is a sensitive period for China's new energy vehicles to go overseas. On July 5, the European Union officially announced the imposition of tariffs on Chinese electric vehicles; before that, the United States had already announced a 100% tariff on Chinese electric vehicles; and according to reports, Turkey, Indonesia and other countries will also follow the United States and Europe in the near future.

BYD's Thai factory model may become a model for Chinese new energy manufacturers to go overseas. It is no longer satisfied with the primary production and manufacturing of parts assembly, but turns to integrate into the local industry and grow with it. The reason for such a large investment is simply because the Chinese new energy vehicle industry has reached the point where it must go overseas.

Although BYD's sales in China have been growing, its market share is approaching its limit. According to the China Passenger Car Association, BYD's share of the domestic new energy market has reached 34% from January to May.

For comparison, the Japanese auto market is a relatively closed market, with domestic brands accounting for more than 90% of the market share, but Toyota, the big brother, only accounts for a little over 30%. In 2023, Toyota's sales in Japan were 1.442 million units, but its global sales were as high as 1,065 units.

The situation is the same for BYD. When the domestic market reaches a certain level, BYD's growth rate will be greatly reduced, its market share will stabilize, and the main growth will come from overseas markets. If BYD wants to become a world-class manufacturer like Toyota, it must face the global market.

It is difficult to truly enter the global market simply by exporting complete vehicles.

The export of complete vehicles brings very little value to other countries and is likely to arouse opposition from local governments and industries. One of the main reasons why the EU imposed tariffs on Chinese electric vehicles is that Chinese brands have destroyed the local electric vehicle industry, so restrictions must be imposed on Chinese manufacturers.

However, it should be noted that the EU only imposes tariffs on imported Chinese electric vehicles, not all Chinese electric vehicles. If Chinese electric vehicle manufacturers set up factories in the EU and build EU versions of "joint venture cars", then the EU will welcome the investment of Chinese manufacturers.

Therefore, the EU’s imposition of tariffs on Chinese electric vehicles is not for the sake of the tax revenue, but to force Chinese manufacturers to invest and set up factories, so that the EU can gain access to China’s technology exports and industrial chain transfers.

The industrial chain has no nationality. The joint ventures established by Toyota and Volkswagen in China have greatly improved China's automotive industry chain and core technologies. Now the EU also wants to learn from China's experience.

To sum it up simply, the EU hopes that Chinese new energy vehicle manufacturers will invest in the EU, create local jobs, and at the same time export and transfer technology to the EU under certain rules.

Is this familiar to you? Yes, it is the EU version of "market for technology". China has become a world automobile production powerhouse through this method, and the EU thinks it can also copy China's path.

Since the EU has such an intention, Chinese manufacturers such as BYD might as well take the initiative to adjust their development strategies, set up some joint ventures such as "Mercedes-Benz BYD", "Volkswagen Xiaomi" and "Peugeot NIO" in Europe, and create some "European-made" versions to occupy the European market in this way.

What's more, investing and setting up factories in key global markets can greatly reduce the resistance of Chinese new energy manufacturers to go overseas. The costs of logistics, manpower, taxation, management, marketing, etc. will be greatly reduced, which in itself is beneficial to the development of Chinese new energy manufacturers.

In addition, investing overseas, transferring technology, providing local employment opportunities, and purchasing from local parts manufacturers can also reduce political resistance and help Chinese manufacturers expand their markets.

China is a responsible country that has been pursuing the goal of globalization since the Belt and Road Initiative. Since Volkswagen can be called "Volkswagen of China", why can't BYD be "BYD of Germany"?

Investing in overseas factories is a two-way struggle between Chinese new energy vehicle manufacturers and the European Union. Although the negotiations between China and the European Union on this issue have broken down, the two sides are not really at loggerheads. After some coordination, a certain balance will be reached. In fact, aren't imported and domestically produced Mercedes-Benz sold at the same time in our domestic market?

Therefore, BYD and other manufacturers are actively investing overseas, mainly out of commercial considerations. Regardless of the EU's tax increase policy, it is imperative for Chinese manufacturers to go overseas, and they will definitely take localization as the main direction. Traditional manufacturers such as Toyota and Volkswagen did so in the past.

But the question now is, will Chinese new energy manufacturers' investment and establishment of factories overseas lead to the loss of Chinese new energy technology, and thus cause Chinese new energy vehicle manufacturers to lose their dominant position?

Technology transfer is inevitable. As long as you invest and set up a factory in a local area, technology diffusion is inevitable. The establishment of joint ventures such as Toyota and Volkswagen is actually a process of technology diffusion.

But this will certainly not affect the dominant position of China's new energy manufacturers, because China always holds the dominant position in core technologies.

The BYD Han is a mid-range model in China with a starting price of 169,800 yuan, but its price in many EU countries is as high as 70,000 euros, which is basically the same as the Mercedes-Benz E-Class; the Wuling Hongguang MINI EV is a commuter car priced at 20,000 to 30,000 yuan in China, but its price in the Southeast Asian market is often above 70,000 yuan, and the gap is very obvious.

If BYD Han is produced in Europe in the future, it will most likely only launch some models that have been eliminated in China. By then, it is very likely that European consumers will be looking forward to a Chinese brand model being produced in Europe as soon as possible, just like Chinese consumers a few years ago asking "when will Prado be produced in China".

Under this model, most of the products consumed by overseas markets are China's previous generation of technologies and products, which can contribute a lot of profits to Chinese manufacturers. The current status of Chinese manufacturers in Europe is roughly equivalent to that of Volkswagen and Toyota in China decades ago.

In the era of fuel vehicles, although Chinese local manufacturers have studied for decades, have they threatened Volkswagen and Toyota? The core technology still has a high threshold.

So, can the EU and other countries and regions replace the position of Chinese new energy manufacturers through learning and independent research and development? This is possible, but the probability is very low.

China can make great use of the "market for technology" strategy because its infrastructure, power supply, high-quality labor force, market regulations, etc. are all improving simultaneously. It also has stable industrial support policies and world-leading execution capabilities. The EU does not have such conditions.

Therefore, in the final analysis, we should not be afraid of going overseas. On the one hand, we cannot always "dominate" the domestic market. On the other hand, there is no need to worry too much about our technology being replicated. Most of the time, it is an illusion to think that if China can do it, so can I.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.