08 September 2025, Bavaria, Munich: Stella Li, Vice President of the car manufacturer BYD, speaks during a presentation by the manufacturer BYD at the press day of the International Motor Show IAA (IAA Mobility, International Motor Show) at the company's stand in a hall of Messe München (Bavaria, Germany) on September 8, 2025.
At a time when electric vehicle sales growth in China has been slowing, BYD expects the country's EV market to expand — quite in contrast to smaller rival Nio that recently said the industry's "golden era" was over.
"With all the innovation technology introduced to the market, China's market very quickly will push to ... close to 80% in EV penetration," BYD's Executive Vice President Stella Li told CNBC's Arjun Kharpal on Monday.
Thanks to state support and a flood of car options, the penetration rate of hybrid and battery-only vehicles has grown rapidly in just a few years, exceeding half of new passenger cars sold in 2024 and a record 62.9% last month, according to the Chinese Passenger Car Association.
The U.S. electric car penetration rate remains at just around 10%, while that figure is roughly 25% globally, the International Energy Agency said last month.
U.S. tariffs of 100% on China-made electric cars have restricted local sales. BYD along with some other firms was put on the Pentagon's list of Chinese military-affiliated companies on Monday. The EV maker did not respond to a request for comment.
But BYD is optimistic about the domestic market, banking on improved battery technology.
Domestic demand for BYD's EVs now stands at around double what the company can currently deliver, Li said, thanks to its fast-charging technology that is reportedly capable of achieving a 70% charge in just five minutes.
Sales of gas-powered cars in China plunged by 39% in May from a year ago, the CPCA said Monday, citing the impact of higher oil prices amid ongoing hostilities in the Middle East.
Looking ahead, Li expects the next phase of competition to likely center on driver-assist features.
BYD on May 28 expanded insurance coverage for "L2+" driver-assist users, which Li said could boost customer utilization by 5 percentage points to at least 95%. The company also revealed its own driver-assist chip.
For now, Li said BYD would largely use Nvidia's driver-assist chipsets, even as the automaker employs roughly 7,000 engineers for semiconductor development. That's just a fraction of the over 869,600 workers the automaker employs, as per its 2025 annual report.
Leon Cheng, head of the mobility practice at YCP, an Asia-focused consultancy, pointed out that despite a recovery in May, BYD's total sales were essentially flat year over year.
"The question is not only whether BYD can maintain its leadership in China," he said, "but whether it can defend its position globally as more Chinese EV players compete aggressively in export markets."
In May, BYD sold nearly three times more cars in China than the second-largest automaker by new energy vehicle sales, association data showed, arresting an eight-month streak in declining sales.
BYD has struggled to grow locally, turning instead to export markets to buoy sales.
Li said the automaker aims to locally produce 75% of cars sold in Europe. She denied allegations from a New York-based watchdog of labor abuses during BYD's Hungary factory construction, adding that the European Commission had yet to investigate the site.
The EU said last month the case fell under the jurisdiction of Hungarian labor authorities.
