BYD Stock …
Without a doubt, it’s the best way to profit from the death of the American auto industry. And it’s all about pricing.
Let me explain …
When I was in the 7th grade, I started my first business.
I sold individual pieces of gum to kids in my class. This, despite gum chewing being against the rules. So I guess you could say I was running an illegal operation. And I never got busted!
It was a pretty successful business, though.
Every morning, I would stop by 7-11 and buy two packs of gum. Each costing $0.30 a pack. Bubbleicious and Hubba Bubba were my best sellers. I would sell individual pieces for $0.25. The margins were amazing. I would typically sell out before the end of the day, clocking in most of my sales during homeroom and after lunch.
There were a few other kids trying to run a similar hustle, but they could never keep up. Not because I was a particularly good salesman. But because for me, it was all about volume. I’m not sure why, but I could always undercut my competition. They were selling individual pieces for as much as $0.50. But because I always had plenty of inventory, kids knew that they could get a better deal from me. And while I made less on individual pieces of gum, I more than made up for it on volume.
I ran this operation until the last day of eighth grade. Then I gave it up when I went onto high school and realized that cigarettes and weed sold better than gum. Plus, I didn’t have an established network in high school, and to be honest, I was starting to become more interested in girls with tight sweaters than hustling gum. It happens to the best of us, I suppose.
Of course, at the time, I thought I was a genius. That I had figured out something that no one else had: competitive pricing + volume = market dominance. I guess that just comes with that age. You think you know everything.
These days, I’m the customer, though. Always looking for a good deal. And I’m not alone..
Truth is, most people are always looking for a good deal. It’s why Costco (NASDAQ: COST) is so successful. It’s why Amazon (NASDAQ: AMZN) and Walmart (NYSE: WMT) exist. And it’s why China’s electric car industry dominates the global market for EVs. This is particularly true in the case of China’s most successful car brand, BYD (OTCBB: BYDDY).
BYD Stock for the Win
BYD began its low-pricing strategy in China, where it now dominates. But now, the company is actively expanding across the globe, and it’s once again gaining market share by undercutting the competition.
Bloomberg actually did a piece on this, noting just how quickly the Chinese automaker is conquering new markets …
Making its vehicles ultra competitive on cost is starting to pay dividends for the company outside its home market.
In Singapore, BYD is now the best-selling car brand, a notable achievement in one of the world’s priciest auto markets.
BYD is also consumers’ top choice of EV in Thailand, where the nation’s consumer watchdog recently cleared the company of alleged legal violations related to its discount strategies, following complaints from customers. The same goes for Brazil, where BYD sold 50% more passenger and commercial vehicles than Ford last year.
Europe is proving tougher to crack, after its EVs were hit with an additional 17% tariff last year. BYD still managed to become the top-selling Chinese automaker on the bloc in 2024. Last month, the company outsold Tesla in markets including the UK, Spain, Ireland and Portugal.
A strong start to 2025 is imperative if BYD hopes to meet its goal to more than double overseas sales from last year. Its international shipments rose 83% to 66,336 vehicles in January, a fresh monthly record.
Overseas deliveries will also be boosted this year thanks to a fourth BYD cargo ship that entered into service last month. It’s reportedly the world’s largest car-carrying vessel, with capacity for some 9,200 vehicles.
To be sure, BYD has enjoyed tremendous support from China. The kind of support that makes the U.S. federal tax credit for EVs look like chump change. And now with that tax credit, as well as overall support for the domestic manufacturing of EVs in the U.S. in jeopardy, BYD’s expansion plans are unlikely to be stopped by anyone.
Because the U.S. auto market dragged its feet in the early days of the EV revolution (aside from Tesla, of course), China is the dominant force. I honestly don’t see any way the U.S. can catch up at this point, either. Sure, overzealous tariffs will keep those Chinese EVs out of the U.S. market, but at this rate, the legacy American car companies will never be able to compete globally on EVs. Which is unfortunate, as that’s really where the industry is heading.
It may not be obvious to a lot of folks in this country who don’t follow the evolution of car manufacturing, but make no mistake: electric vehicles are the future. And without a miracle at this point, U.S. automakers are at risk of becoming as relevant as typewrite ribbon manufacturers.
It won’t happen overnight. In fact, it probably won’t even be recognizable for at least another ten years. But market my words: If U.S. carmakers can’t figure out how to compete with the Chinese on EV development before the end of the decade, the U.S. auto market will have virtually no international market presence.
