BYD's Clever Strategy to Generate More Revenue Than Tesla

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In the third quarter of 2024, the turnover of the Chinese electric car manufacturer BYD reached 28 billion dollars. This is better than its big American rival, Tesla, which recorded revenues of 25 billion dollars. And this is explained, in particular, by an activity carried out upstream of the company's main operations.

Links with Apple

Indeed, BYD works closely with Apple, for whom it assembles 30% of iPads. The two companies have been partners since 2009, maintaining a relationship that has strengthened over the years. BYD Electronic, a subsidiary specializing in subcontracting, has been mass-producing the Apple brand's tablets since 2019. It is now also responsible for sensitive tasks on behalf of the American giant, such as the titanium parts of the latest iPhone Pro models.

Apple CEO Tim Cook met with BYD boss Wang Chuanfu during a visit to Shanghai in May, where he said the company was among Apple’s suppliers that “pushed the boundaries of what’s possible.” More recently, Cook has reiterated his company’s indebtedness to its Chinese partners. “We couldn’t do what we do without them,” he told the country’s state media in November.

iPad Air 2024 © Apple

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BYD assembles smartphones for major brands

But Apple is far from being the only smartphone manufacturer for which BYD works. Because The manufacturing of electric cars and smartphones has similarities, in terms of batteries, chips and software.

Xiaomi is also a customer. BYD not only assembles some of its smartphones, but also supplies it with some of the technology for its electric vehicles. The same goes for another Chinese mobile giant, Huawei. In addition, the manufacturer is also involved in the assembly of components related to the hinges of Samsung's foldable phones. An activity that is highly profitable for it.

A business threatened by Trump ?

For Apple, this link allows it to diversify its supply chain outside of China, as BYD also has factories in other Asian countries; the Cupertino firm has recently made it its mission to become less dependent on the Middle Kingdom, by investing in Vietnam and India. However, its dependence on certain manufacturers based in the country, such as Luxshare, is growing.

This is all the more problematic in the current geopolitical context. Donald Trump, who will be inaugurated in January, has ambitions to reduce Chinese imports, which could pose logistical and economic challenges for Apple.

During his previous term, Tim Cook managed to convince the Republican to exempt electronic products, including the iPhone, from customs duties on products made in China. This time, it is not certain that the balance will tip in his favor…

• Electric car manufacturer BYD assembles some Apple iPads, as well as devices from Huawei, Xiaomi and Samsung.
• Its subcontracting business is very profitable, and has allowed it to surpass Tesla in terms of revenue.
• Its special relationship with Apple is, however, threatened by the presidency of Donald Trump.

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