BYD has begun building a new portion of an electric vehicle manufacturing facility to build car components in Shenzhen, as China’s top-selling electric vehicle maker gears up to meet growing demand.

Why it matters: This is the latest example of BYD aggressively expanding key components on the supply chain, such as batteries and chips, at a time when many of its rivals are struggling with industry-wide shortages.

Details: BYD said that construction of the RMB 20 billion ($2.87 billion) industrial park has started at the Shen-Shan Special Cooperation Zone on the city’s east side after receiving official approval, according to a report by the regional broadcaster Shenzhen Satellite TV on Wednesday.

  • The facility will produce “critical components” for 600,000 electric cars per year on an area of 3.79 million square meters (40.8 million square feet), the report said. Mass production is scheduled to kick off in July 2023, and the firm expects to achieve an annual production value of more than RMB 100 billion.
  • This is the Phase 2 portion of BYD’s manufacturing facility. Construction of Phase 1 in the industrial park has continued rapidly, with the main buildings now almost complete, suggesting that part of the facility will soon be operational, according to a July 29 report by the Shenzhen Economic Daily (in Chinese).
  • In August 2021, the carmaker revealed plans to spend RMB 5 billion to build a 1.71 million square meter industrial facility producing car parts, such as clutches and wire harnesses, and later showed interest in more space. Additional investments were announced in January.

Context: BYD has been working with local Chinese governments to establish multiple new manufacturing facilities to ensure the in-house supply of crucial parts, including batteries and chips for its EVs, as part of the major player’s plan to more than double its sales this year.

  • On Sept. 10, the company announced that it had begun constructing a 15 gigawatt-hours (GWh) battery pack factory in the southern city of Nanning, Nanning Evening News reported (in Chinese). Another chip plant will begin production next month in the central city of Changsha.
  • The Warren Buffett-backed EV giant currently has a total production capacity of between 1.5 and 2 million vehicles annually, according to estimates by Bloomberg Intelligence analysts. It currently runs or is establishing nine vehicle production sites in major Chinese cities, including Shenzhen, Changsha, and Xi’an, in the northwestern Shaanxi province.

Jill Shen

Jill Shen is Shanghai-based technology reporter. She covers Chinese mobility, autonomous vehicles, and electric cars. Connect with her via e-mail: jill.shen@technode.com or Twitter: @yushan_shen