BYD will struggle to do a better Toyota impression

TOYOTA MOTOR

06/10/2026 10:16

The author is a Reuters Breakingviews columnist.  The opinions expressed are her own.
By Katrina Hamlin
HONG KONG, Oct 7 (Reuters Breakingviews) - BYD 002594.SZ, short for “build your dreams”, may not fulfill those of its founder. Wang Chuanfu told shareholders at an investor meeting in June the Shenzhen company aims to become the world’s largest carmaker by 2030 – a plan that entails overtaking Toyota 7203.T, which sold roughly 11 million cars last year. BYD is retracing the path the Japanese giant took in its early decades, but the next steps are harder to follow.
Wang has long watched Toyota. Early BYD models were eerily similar to the Japanese marque’s bestsellers: the 2008 F3 sedan was hailed as a “Corolla ripoff”.
In some ways, the company itself has become a dead ringer for the young Toyota. It has risen by pushing an affordable alternative to fuel-intensive gas guzzlers, at a time when geopolitics and climate change make cutting dependency on oil a priority for both policymakers and consumers. Decades ago, Toyota also won over drivers with efficient engines and lighter models. In the wake of the 1970s oil crisis, its Corolla outshone heavier, thirstier cars made by American rivals such as Ford Motor F.N.
BYD leads in its home market, with 12% share as of August according to Shanghai consultancy Automobility, just as Toyota dominates in Japan. It’s driving exports to the limit too – they make up nearly half its sales, riling China’s trade partners. That also echoes Toyota: By 1980, the majority of its cars ended up overseas, prompting the US and the then European Community to negotiate import quotas with Tokyo. This combination of commercial aggression and technical prowess saw BYD car deliveries reach 4.6 million in 2025, on a par with Toyota's annual volumes in 1997.
     However, their paths may yet diverge. Toyota matured in a very different environment. While the global vehicle market expanded by about 20 million units over the 1980s and 1990s to reach nearly 60 million at the turn of the century – ample space for the Japanese group to grow into - the next decade could see slower or even stagnant growth. If you sell 10 million cars, someone else loses 10 million, as CLSA analyst Xiao Feng puts it.
The world’s auto producing nations are upping their guard against newcomers. Drivers can buy Toyotas in around 170 different markets. BYD has entered about 120 countries and territories. But it has no or limited access to three of the world’s top ten auto markets, namely the US - Toyota's largest source of sales - plus India and Japan. Together, they accounted for some 22 million passenger vehicles last year, roughly a quarter of the industry total. Changing the status quo is beyond Wang’s control.
Friendlier nations let millions of Chinese cars in. But many are now raising the price of entry. The EU, the world’s second-largest market for electric cars, has imposed an additional 17% duty on BYD’s imports from the People’s Republic. Brussels is under pressure to consider more mechanisms to control import volumes, particularly for hybrid powertrains. Brazil introduced 35% tariffs in July. Mexico, Russia and Thailand all have levies in place, and the UK may soon introduce duties too.
Meanwhile, Beijing itself is signaling unease as passenger vehicle exports break records and look set to top 10 million units this year, angering trade partners. Three ministries have thrown their weight behind new guidelines for exporting automakers, urging them to respect local regulations and avoid disruptive competition. Authorities could take more concrete steps, such as removing a generous 13% export tax rebate.
On top of that, domestic sales are slowing. China’s dealer association expects a double-digit percentage drop this year, and Volkswagen VOWG.DE warned investors the market could contract by 20%. All of that complicates BYD’s efforts to shift the roughly 6 million cars it is capable of churning out in China each year, as estimated by Automobility founder Bill Russo.
Making cars abroad – as Toyota started doing in 1959 – circumvents tariffs and other roadblocks. BYD has announced overseas factories across Hungary, Thailand, Brazil, Uzbekistan and Indonesia, whose combined capacity would amount to nearly 1 million units a year, according to Citi research. It’s also looking into deals to take advantage of existing production sites, Reuters reported, which should be faster than building. It is possible to ramp up international supply chains quickly – Toyota itself doubled overseas production to 4 million in just five years between 2002 and 2007. But Wang would need to at least quintuple capacity outside China to about 5 million to reach his goal of surpassing Toyota’s current volumes, assuming China sales stay flat.
There are other ways to top up volumes here and there. One more Toyota trick BYD is trying is expanding its product range. Just like 1980s Toyota, which launched the Lexus marque in 1989, it has successfully branched into premium products: the high-end Denza and Fangchengbao brands accounted for more than 10% of sales as of the first quarter, according to analysts at Sunwah Kingsway. Cutting-edge technology like its fast-charging batteries, which can charge to 97% capacity in under 9 minutes, and sophisticated digital cockpits could help it wrestle new buyers from incumbents – including Toyota.
Trucks and vans present another promising area. For the first half of the Toyota group’s existence, up until the 1960s, commercial vehicles accounted for more than half of export volumes. Wang is only just getting started on that front. At BYD, commercial vehicles – mostly buses – contributed less than 2% of total sales so far this year. He has an opportunity to do much more: e-truck deliveries reached 30% of sales in China in 2025, compared with almost none in 2021, and exports have spiked since the Iran war broke out.
The company’s commercial vehicle sales are growing fast, rising 28% in the first three quarters, when BYD's car sales fell 4%. Last month it also announced a plan to make heavy-duty trucks in Europe. It’s much less experienced than beefier rivals like Sany Heavy, which is expanding rapidly. But it might take share from legacy groups that remain more focused on gasoline.
BYD is doing a remarkably good impression of a young Toyota, and Wang is still finding new ways to mimic the world’s largest carmaker. But catching up with the $220 billion juggernaut looks like a tall order, especially by 2030. That doesn’t mean Chair Akio Toyoda can rest easy: the Japanese group will be a prime target as its Chinese twin hunts for more market share.
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(Editing by Neil Unmack; Production by Aditya Srivastav)
((For previous columns by the author, Reuters customers can click on HAMLIN/katrina.hamlin@thomsonreuters.com; Reuters Messaging: katrina.hamlin.thomsonreuters.com@reuters.net))