China’s BYD extends olive branch to Tesla in EV market battle

China’s leading electric vehicle (EV) manufacturer, BYD, has vowed to “work together” with rival Tesla to challenge gasoline-powered cars, while insisting that Beijing is “more open” to foreign business than the West perceives.

In an interview with the Financial Times, BYD’s Executive Vice President, Stella Li, stated, “Our common enemy is internal combustion engine cars. We need to work together to change the industry.”

Despite Li’s comments, the two automakers are competing to be the world’s largest EV group. BYD aims for rapid growth in advanced EV sales in Europe, offering a wider range of products than the US group. Tesla, meanwhile, has experienced a decline in European sales due to Elon Musk’s increasing political activism.

Speaking at a BYD showroom in London, Li said that despite rising trade tensions with Brussels and Washington, China is willing to share key technologies in EVs and autonomous driving with foreign companies.

“The Chinese government is more open, so maybe there are too many misperceptions here,” she said.

She added that the Chinese auto market is “the motherland of innovation,” urging foreign companies to come to China. “The government will support you and work with you to allow any technology to be realized,” she said.

Last month, BYD announced that advanced intelligent driving functions, via its “God’s Eye” autonomous driving system, would be available to customers on most of its models at no extra charge.

This announcement raised concerns across the industry about declining revenues for such driver-assistance technologies, with analysts predicting that the entire market will have to follow suit in the widespread adoption of intelligent driving functions.

The Warren Buffett-backed group is also making an aggressive push into European markets with plans for local production through factories in Hungary and Turkey, countering high tariffs imposed by the EU on imports of Chinese-made EVs. BYD is also planning to raise up to $5.2 billion through a share sale in Hong Kong to help fund its overseas expansion, according to a person familiar with the terms of the deal.

However, Brussels also wants Chinese companies to transfer intellectual property rights to European businesses in exchange for EU subsidies. Meanwhile, Beijing has signaled that it wants Chinese companies to limit some advanced overseas production in response to growing Western protectionism.

In recent years, China has gradually expanded its export controls, from restrictions on battery materials like rare earth elements to technologies and processes that convert refined rare earth elements into metals and permanent magnets used in EVs.

When asked about recent political developments in the EU regarding technology sharing, Li said she was not concerned about politics as it was “short-term” and consumers would ultimately choose the better product.

She noted that the Chinese government was helping with its overseas push and that all its innovations, including self-driving technology, would be available to global markets: “For every investment we make overseas, the [Chinese] government is very supportive [of us].”

Li said that BYD would offer European consumers options beyond EVs, such as the Seal U plug-in hybrid, as EV sales fall in leading European markets and hybrids are not subject to the EU’s anti-subsidy tariffs. It also plans to launch its Denza premium brand later this year.

According to Schmidt Automotive Research, BYD’s battery EV market share in Western Europe, including the UK, was 2% last year.

Li confirmed that BYD has no plans to introduce EVs in the US, where China imposed a 100% tariff on EV imports last year. On Thursday, US President Donald Trump announced additional tariffs on imports from China and confirmed that taxes would also be imposed on Mexico and Canada starting next week. Li said no decision had been made on BYD’s plans to build a factory in Mexico.

She stated that she was not concerned about a global slowdown in the transition to EVs as a result of Trump’s policies. Referring to the shift away from gasoline cars in China, she said: “Why do people now prefer EVs? Because it’s a better car, a smarter car… and of higher quality.”