Under the guidance of the “dual carbon” strategy, the automotive industry, as an important growth point of China’s economy, not only shoulders the important task of promoting internal circulation and stimulating consumption, but also needs to lead low-carbon travel and low-carbon transportation, help China move from a manufacturing country to a manufacturing power, and promote the high-quality development of China’s economy. Born at the forefront of reform and opening up, BYD has always adhered to the development concept of “technology is king and innovation is the foundation” since its establishment in 1995, relying on strong R&D strength to form core competitiveness, and accurately positioning the market in the four major tracks of automobile, rail transit, new energy and electronics, becoming a global leader. Standing at the crossroads of unprecedented changes in a century, BYD has accelerated its progress in the field of new energy, with business in more than 70 countries and regions around the world. After more than 20 years of innovation and development, BYD has become the largest new energy vehicle manufacturer in China and the world’s largest sales volume. Behind the continued boom in sales, how to balance production capacity and quality, as well as the relationship between corporate ESG (environmental, social and governance) practices and high-quality development, so as to improve the sustainable development of enterprises, is an important issue facing BYD.
Policy-driven to Market-driven Byd Staged “Acceleration”
China is a major carbon emitter and energy consumer. In the past ten years, policies related to new energy vehicles have been intensively introduced. From the pilot demonstration and promotion from 2009 to 2012, to the promotion and application from 2013 to 2017, and then to the market-oriented adjustment stage from 2018 to 2022, the production and sales of new energy vehicles in China have been rising, and the industry has been moving forward. The automobile industry started late in China, and key components such as engines are too dependent on imports. However, in recent years, the domestic automobile industry has developed rapidly, realizing the transformation from catch-up to leader in the field of new energy, breaking through technical barriers in pure electric, plug-in hybrid, range extender, etc., upgrading from technology to capacity improvement, and achieving curve overtaking in the development of new energy vehicles. Policy support gives car companies favorable conditions for the transition to electrified roads. Standing on the cusp of “carbon peaking and carbon neutrality” and the historical node of unprecedented changes in a century, after more than ten years of perseverance, BYD has achieved remarkable results. Wang Chuanfu, chairman of BYD, said that he will continue to work hard in the future to overcome some difficulties and meet greater glory. At present, BYD’s nine major plants in Shenzhen, Changsha, Xi’an, Hefei and other regions have collectively made efforts, and sales have continued to exceed 150,000 units per month since July 2022. On November 16, 2022, BYD’s 3 millionth new energy vehicle rolled off the production line, taking 13 years from “the first new energy vehicle to the 1 millionth new energy vehicle” and one year from “1 million to 2 million vehicles”. From “2 million to 3 million units” in only half a year, the average daily production of nearly 5,500 new energy vehicles, surpassing peers, is accelerating in the new energy track. According to official data, BYD’s new energy vehicles ranked first in the world with sales of 1.8685 million units in 2022, a year-on-year increase of 152.5%, accounting for more than 26% of domestic new energy vehicle sales (excluding exports). According to TrendForce statistics, global sales of new energy vehicles will be about 10.65 million units in 2022, and BYD’s new energy vehicles will account for nearly 18% of the global market, which means that about 2 out of every 10 new energy vehicles in the world are produced by BYD. In 2022, overseas sales totaled 55,916 units, an increase of 307.2% over 2021, and the demand for Yuan Plus/ATTO after its overseas launch was hot, triggering flash sales in Europe and the Asia-Pacific region, contributing to the main increase. According to the latest data, BYD showed a good off-season in February 2023, with sales of 193,700 units in the current period, a year-on-year increase of 112.6%. Vehicle exports in February were 15,002 units, up 44.1% y/y. China’s new energy vehicle industry can make breakthroughs in the short term, and BYD has made great contributions. In 2020, BYD launched battery “black technology” – blade battery.The blade battery has changed the packaging process of the battery pack, increased the volume utilization rate by 50%, greatly extended the vehicle range, and has been highly recognized by the market and the industry. In the penetration test comparison between the blade battery and the ternary lithium battery based on the lithium iron phosphate design, the ternary lithium battery burns violently, and the temperature rises to about 500 degrees instantly, while the blade battery maintains a constant temperature of about 50 degrees. According to flush data, in January 2023, BYD’s installed lithium battery market share reached 35.29%, an increase of 11 percentage points from the previous month, hitting a new monthly high. According to Liu Huanming, vice president of BYD, general manager of the audit and supervision office, and secretary general of the CSR committee, the acceptance of new energy vehicles is gradually increasing, and if production capacity is increased, the penetration rate of new energy vehicles may reach 60% in the future. In addition, BYD’s high-end brand “Yang” series is expected to be launched in 2023.
New Energy Pioneer Byd Takes the Lead in “Carbon Reduction”
Green and low-carbon has become the main theme of world energy development, the basic framework for promoting the green and low-carbon transformation of global energy has been formed, and the global process of addressing climate change has accelerated significantly. With the increase of car ownership, problems such as traffic congestion, environmental pollution caused by power combustion, energy consumption and even climate change have become increasingly prominent, posing a huge threat to the earth in which we live. Nowadays, the issue of environmental governance has become the focus of attention of all countries in the world, and a common task is how to effectively curb energy depletion and control the deteriorating environmental situation. As a firm practitioner of green dreams, BYD is at the forefront of “carbon reduction and emission reduction”, and its growth process is the epitome of domestic green and low-carbon development. As early as 2008, BYD put forward the green dream of solar energy, energy storage power stations and electric vehicles, opened up the whole industry chain of energy from absorption, storage to application, super hybrid DM-i technology, EV pure electric platform, etc. have played an important role in addressing climate change and strengthening environmental protection, and achieved remarkable results. In 2022, BYD successfully built China’s first zero-carbon park headquarters for automotive brands, which is a model of zero-carbon parks in China.According to reports, the utilization rate of new energy vehicles in BYD’s Pingshan headquarters park has reached 100%, and all pure electric forklifts, stacker trucks, pallet trucks, heavy trucks, and clean vehicles developed and manufactured by BYD have been produced in the park, fully realizing green logistics and reducing a total of 245,681.89 tons of carbon dioxide equivalent. According to BYD’s carbon emission personnel, since 2015, BYD has begun carbon emission related work, and the results of the investigation show that the overall standard has been met. In 2021, BYD established a carbon emission control committee under the responsibility of the main leaders of the group, formulated a series of carbon emission control systems, and carried out a series of clear division of labor such as carbon emission verification, management, publicity, and training, officially starting the company’s management journey to achieve carbon peak and carbon neutrality goals. At present, Shenzhen’s total carbon emissions have a downward trend, and the replacement of fuel vehicles by new energy vehicles is a two-way benefit.
BYD’s ESG Report Transparency Exceeds the Overall Level of the Industry
With the increase in the penetration rate of new energy vehicles, the trillion-scale new energy vehicle industry is extremely important in environmental protection, low carbon, quality control, safety, employee rights, governance and other practices, which are important topics in the “Guidelines for Social Responsibility in China’s Automotive Industry” compiled by BYD. In terms of ESG practice, BYD also plays a “leader” role. Since 2010, BYD has issued social responsibility reports to the society for 12 consecutive years, and is one of the first automotive companies to carry out ESG disclosure. From the perspective of the number of disclosure issues, BYD has made timely and accurate disclosures with reference to the requirements of the social responsibility guidelines for the automotive industry. From the perspective of disclosure length, since 2014, BYD’s ESG report has continued to exceed 40 pages, exceeding the average length of the automotive industry for eight consecutive years. In 2021, BYD’s ESG report reached 86 pages, more than double the average of 33.44 pages in the automotive industry, and the transparency of information disclosure ranked at the leading level in the industry. Currently, BYD is the only listed automaker to receive an A grade in the MSCI rating.
Reduction in Emission Intensity of Major Environmental Indicators Such As Greenhouse Gases
In terms of environmental protection, BYD will strictly investigate the surrounding environment and residential buildings before planning the plant, and the practical results are remarkable. According to BYD’s ESG report, by the end of 2021, BYD had sold more than 1.5 million new energy vehicles and reduced CO2 emissions by more than 8.92 million tons. In 2021, the greenhouse gas emission intensity was 24.15 tons/million revenue, down 8.77% from the previous year; During the same period, the density of industrial wastewater and packaging materials decreased by more than 25%; Electricity consumption and water consumption have improved.
Strengthen Quality Control Management, Pursue Quantity and Pursue Quality
The safety of new energy vehicles has higher requirements than that of fuel vehicles. Product quality and safety are one of the most concerned issues for BYD’s stakeholders, and in the interview, Liu Huanming said that the most important thing to consider the quality of electric vehicles is to consider their safety.For BYD’s “OEM” business module, the quality control management experience of upstream and downstream enterprises has good reference value. At present, BYD starts from the physical quality of products, checks layer by layer, carries out special quality inspections, prioritizes risks, finds out the reasons behind problems, and promotes system improvement. For the quality of new products, BYD has set strict quality thresholds from product design to trial production to mass production, and implements zero tolerance for the quality of vehicles leaving the factory. Establish a sound recall mechanism to ensure that defective vehicles are effectively and standardized. In 2021, BYD plans to recall 22,581 vehicles, accounting for about 3% of the total vehicle sales for the year. By the end of 2022, the recall upgrade completion rate has reached about 90%. At the same time, BYD has established a sound customer satisfaction management mechanism, mainly in the form of telephone, car machine and WeChat survey, to conduct a life-cycle care return survey for customers on factors such as service attitude, process, quality, delivery time, and price. 2021 China Automotive After-sales Service Customer Satisfaction Survey, BYD’s automotive customer satisfaction ranked third among domestic car brands.
Employee Satisfaction Has Increased Significantly and the Turnover Rate Has Decreased Significantly
From auto parts, to vehicle manufacturing to automotive service, every production link requires the orderly presence of employees to operate normally. As a super factory with hundreds of thousands of employees, the protection of employees’ rights and interests is very important and an important issue for ESG practice. According to the 2021 ESG report disclosed in 2022, BYD’s total global employees exceeded 280,000 at the end of 2021. Zhang Jiafu, director of the Party Working Committee, said that considering the difficulty of employment, in order to “promote employment and ensure growth”, BYD increased from the original plan of recruiting 10,000 fresh graduates to 20,000, fully demonstrating the responsibility of large enterprises. In March 2022, BYD stopped all labor dispatch and actively cooperated with the Human Resources and Social Security Bureau, colleges and universities by means of self-recruitment, internal recommendation, and online recruitment. At the same time, build a variety of employment channels and establish employment platforms. In terms of workforce construction and improvement of satisfaction, the construction of skill channels, technical channels and craftsman systems has been carried out, and corresponding treatment has been given, mobilizing the enthusiasm and creativity of employees; The introduction of the NPS evaluation mechanism in the park has greatly improved the satisfaction of employees, and the turnover rate has decreased significantly, and the employee turnover rate of BYD in 2021 has decreased by nearly 9 percentage points compared with the previous year.
“hardcore” Wang Chuanfu As CSR Director
The above series of practical achievements are a test of BYD’s increasing emphasis on ESG. Wang Yanying, Deputy General Manager of BYD’s Audit and Supervision Department and Secretary of the Secretariat of BYD’s CSR Committee, introduced that in order to continuously improve the company’s ability and level of fulfilling social responsibilities, the organizational structure of the CSR Committee was reset in 2021, and Chairman Wang Chuanfu personally served as the director of the CSR Committee, which played a good exemplary role, setting up seven working groups such as corporate governance, employee care and protection, product quality and service, green operation and production, partner management, anti-corruption, and giving back to society and public welfare, with a clearer division of responsibilities.
“Look Up” to the Future, How to Break Through Intelligence, Battery Life, and Safety
Carbon reduction is not just a slogan, from the first new energy vehicle to the first “zero-carbon park”, from the first officially announced suspension of sales of fuel vehicles to the first domestic car company to achieve 3 million new energy vehicle sales, BYD has created a number of global firsts. The cumulative sales of more than 3 million vehicles are not only recognized by consumers, but also reflected in innovative technologies, which is enough to prove that BYD is the leader of the new energy vehicle industry. The development of new energy vehicles is changing from policy-driven to market-driven, what direction will new energy vehicles develop in the future, and how to make breakthroughs in intelligent technology, power systems, safety and other aspects? BYD’s every move has attracted much attention from all parties. In terms of intelligence, BYD has integrated the traditional distributed electronic and electrical architecture into a domain control architecture, which is divided into four domain controllers: intelligent power domain, intelligent vehicle control domain, intelligent cockpit domain and intelligent driving domain, improving the efficiency of system interaction. And independently developed the automotive operating system BYD OS with decoupling software and hardware, providing a high-standard collaboration system for high-level intelligent driving. In terms of power system, range anxiety is widespread, and battery life is one of the most concerned issues for users. At present, the global new energy vehicles are dominated by power lithium batteries, but lithium batteries are relatively expensive, and how to further improve the energy density of batteries is critical.At present, the energy density of BYD blade battery is about 140Wh/kg, and the volume energy density can reach 230Wh/L; Lu Zhipei, deputy director of BYD’s Shenzhen Development Center, said that it is expected that the battery energy density will be greater than 180Wh/kg and the volumetric energy density will reach 300Wh/L in 2025. In terms of safety, it is considered by many car owners to be the most luxurious configuration. BYD has mastered the core three electric technologies (battery, motor, electronic control), and the safety solution is worth learning. For example, the ATTO 3 model uses a large number of high-strength materials, and it is far superior to its peers in active and passive safety equipment such as tire pressure display, lane departure warning, and active braking.
