With its game-changing electric vehicles and cutting-edge batteries, Chinese carmaker BYD (002594. SZ) is widely viewed as one of the most disruptive tech companies in decades. It has the potential to reshape the auto industry in the United States and radically transform urban rail transportation, thanks to its battery-powered fleet of buses and subway cars. Investors are taking notice, with the firm’s shares rising by more than 50% this year. “It’s the most exciting tech company I’ve seen in a while,” says Taylor Ogan, founder of investment firm Snow Bull Capital. He adds that BYD is a model of efficiency, employing what Silicon Valley calls a lean process called GSD—Get the shit done. Tu Le, the consultancy Sino Auto Insights founder, agrees with that assessment. “They do everything from seats to engines,” he notes, adding that the company is one of the most vertically integrated in the world. It can achieve astonishing range levels on a single charge for its electric vehicles, aided by its proprietary Blade technology and an unmatched level of automation at its factories.
Acquiring Jabil’s mobility business will expand BYD Electronic’s (BE) customer base, product portfolio, and smartphone components business as it looks to capture growth in the sector. BE primarily sells electronic components for consumer electronics like smartphones and laptops, and the acquisition of Jabil’s mobility operations will boost its market share in this segment.
Jabil, which makes printed circuit boards and manufactures various consumer electronics products, did not disclose how much it would pay for the mobility unit. However, it did say a combination of debt and equity issuance would fund the deal.
While BYD is best known for its electric vehicles, he adds that this deal serves as a reminder that it excels in more than just EVs. For example, it also has a solid presence in the mobile supply chain and is a supplier to Apple.
As for the future, BYD’s main challenge will be cracking America, which is not as established as Toyota or Nissan in EV sales. But as the US economy strengthens, BYD may soon be able to compete for sales from traditional automakers.
The deal with Jabil could help BYD overcome this hurdle, as it will provide the firm with a better understanding of what American customers want and expect from EVs. It will also give it access to a network of suppliers that can deliver what the American market demands. For BYD, the opportunity to bolster its presence in the US could be a significant boon in its quest to become a global player. BYD is also expanding its car dealerships in India and will increase the number of showrooms in Thailand, Brazil, and other emerging markets. Its car exports quadrupled last year to 55,916 sedans and SUVs.
