South Korea’s Samsung group apparently bought into China auto maker BYD as a way of improving its prospects in China, where it has struggled against government protection of the local industry. If that’s the case, it could hardly have picked a better partner, for BYD has been one of the principal beneficiaries of government largesse, emerging as a state champion in electric vehicles and hybrids on its way to becoming the world’s largest electric car manufacturer.
BYD sold 58,000 electric and plug-in hybrids last year. New energy vehicle sales were up more than two-and-a-half times from 2014 , and BYD’s popular Qin and Tang models give it an 80% share of China’s plug-in hybrid market.
The Shenzhen-based auto maker announced July 21 that Samsung, South Korea’s largest chaebol, bought a 2% stake in BYD for $450 million as part of a share placement that saw the car- and battery-manufacturer raise almost $2.2 billion, funds that will be used to expand its electric vehicle production.
Electric and plug-in hybrid car sales in China quadrupled to 351,000 last year. Government subsidies have played a big part in that surge. Consumers receive a range of subsidies and other perks when they buy electric and hybrid vehicles. But BYD, too, benefits from lavish government support, support that has played a key role as it has established its global lead in electric vehicles.
Originally published in Forbes. Can be accessed here.