Since 2020, due to the epidemic and insufficient supply chain production capacity, most new energy vehicle companies have struggled in the dilemma of chip shortage and rising costs. Among them, BYD is an outlier, and its production capacity and profit have been against the trend

Since 2020, due to the epidemic and the shortage of production capacity of in the supply chain, most new energy vehicle companies have struggled in the dilemma of chip shortage and rising costs. Among them, BYD is an outlier. Its production capacity and profit have been against the trend in the past two years. In this year, BYD has completed sales of more than 1.6 million vehicles, and the profit of a single bicycle has increased significantly, from about 800 yuan last year to 2,000 yuan in the first quarter of this year, and then to about 10,000 yuan in the third quarter. It can be said that the profitability of BYD Auto is getting stronger and stronger. The important weapon that allows BYD to calmly deal with insufficient supply chain production capacity and rising costs is the vertical integration of of BYD's supply chain .

It can be said that BYD is the only car company in the new energy vehicle industry with a full industrial chain layout, running through the up, mid-, downstream and after-sales markets of the industry. In terms of parts, BYD has established five fudi series companies. fudi battery products cover 3C batteries, power battery and energy storage batteries. fudi Power is committed to developing new energy vehicle powertrains. fudi Vision focuses on the product research and development and production of automotive lighting and signal systems. fudi Technology masters a large number of electronic and chassis parts technologies, and fudi Seiko mainly develops welding production lines for the group's body and parts. There is also BYD's semiconductor business unit. BYD's products include power semiconductors, automotive-grade MCU chips, CMOS image sensors, photoelectric semiconductors and other fields. It can be said that BYD's self-developed and produced supply chain occupies all kinds of core components of new energy.

When the overall environment of automobiles is affected by the epidemic and political factors, BYD's vertical integration can increasingly play its real role. The advantage of vertical integration is that it can manage and integrate the supply chain more effectively and reduce costs. The disadvantage is that the plate is too large, the initial investment is large, and the company is easily affected by external impacts if its own supply chain technology is not up to standard. Now that the cost of battery raw materials has soared, cars have serious chip shortages, and upstream parts production capacity is seriously insufficient, BYD's vertical integration can give it stronger control over upstream costs and production capacity; and BYD's years of investment in new energy research and development have also brought its technology to a boom, becoming a moat for vertically integrating industrial chain . Now BYD's three-electric and semiconductors not only meet their own production needs, but also relax their supply to the outside world. The early investment can also be rewarded when sales soar.

BYD's vertical integration can now be said to occupy the best development niche, which is why BYD has always wanted to split the battery and semiconductors to go public.