A certain type of advantage is only apparent when something goes horribly wrong. An oil shock causes supply chain disruptions, shaken consumers, and cautious language in earnings calls for the majority of automakers. It appears more and more like a sales event for BYD.
In late February, when crude prices surged toward $100 per barrel due to American and Israeli airstrikes against Iran, an unusual event occurred in automobile dealerships from Australia to the Philippines. According to reports, BYD started moving two weeks’ worth of inventory in one day. At a closed-door briefing, the company’s founding chairman, Wang Chuanfu, told analysts that soaring fuel prices would likely drive overseas sales to “another level.” It wasn’t arrogance. It was a recurring pattern that is getting harder to ignore.
Although that dynamic is real and instantaneous, the explanation goes beyond simply saying that high gas prices encourage people to drive electric cars. The deeper narrative is structural. Over the course of about 20 years, BYD has quietly developed a business that is independent of the global supply chain. While rivals rely on outside battery suppliers, independent semiconductor manufacturers, and uncontrolled shipping networks, BYD manufactures its own Blade Batteries, chips, and has even made investments in specialized cargo ships. BYD stands behind its own wall when the logistics networks that are essential to everyone else become entangled due to geopolitical tensions. Perhaps this was always the plan, or perhaps Wang Chuanfu just built what made sense from an engineering standpoint and was rewarded by geopolitics. The outcome is the same in either case.
The geographic scope of BYD’s expansion is what makes the current situation so fascinating. Western markets, including the US, Canada, and a large portion of the EU, have been closing their doors by imposing tariffs that are so high as to prevent real competition. BYD hasn’t responded by waiting or lobbying. In the gaps between those barriers—Hungary, Turkey, Thailand, Indonesia, Vietnam, and Brazil—the company has been systematically establishing factories.
Pakistan, on the other hand, has received less attention than it merits. In collaboration with Mega Motors, a plant in Karachi is intended to manufacture 50,000 cars a year for a domestic market where car sales may be half-electric by 2030. Customers from Pakistan are not the only ones using that facility. It’s a foothold on a coastline that links to the Mediterranean, East Africa, and the Middle East—a geography that becomes suddenly more important during any energy crisis.
It’s worth pondering the irony at the heart of this tale. The same geopolitical shocks that push oil to crisis levels also frequently result in trade fragmentation and protectionism, which should theoretically make it more difficult for a Chinese company to expand. It doesn’t sound good to have higher tariffs, more scrutiny, or friendshoring policies that push supply chains toward reliable allies. And yet. Because of its vertical integration, BYD is forced to build locally, as it had previously intended, due to tariffs on completed automobiles. Protectionism turns into an incentive to accelerate the kind of long-term, embedded presence that eventually gives a foreign business a sense of domesticity. It seems that BYD has been aware of this dynamic for a longer period of time than its Western rivals.
It should be noted that BYD is by no means having a flawless year. Due in part to intense domestic price competition and the cost of discounting, which has put pressure on margins throughout China’s entire EV industry, net profit dropped 19% in 2024—its first decline since 2021. The business, which some analysts now refer to as the Toyota of the EV era, has significant financial clout. Furthermore, the transition question that looms over every energy crisis is still genuinely unanswered: will the adoption of clean energy actually accelerate or will the world turn back to coal and increased oil drilling? The supply chains for solar panels and other green energy components are strained by the same shock that makes EVs seem appealing. This is not clean at all.
However, it seems that BYD has accomplished something that most industrial businesses never do: it has made itself structurally relevant to a variety of potential futures. People will purchase EVs if oil prices remain high. BYD will construct more local factories if trade barriers continue to rise. If emerging markets continue to urbanize, its less expensive models will find consumers that Tesla never intended to attract. Thus far, BYD has primarily benefited from the geopolitical shock that was expected to make matters more complicated. That’s either outstanding luck or clever strategy. It’s most likely both at this scale.
