Chinese automaker and power battery manufacturer BYD [002594:CH] announced that it has stopped making combustion engine vehicles last month and it will focus on full electric and plug-in hybrid cars, as reported by Reuters on April 3. The company’s move makes it the world’s first automaker to stop the production of fuel combusting vehicles. Last November, following the COP 26 summit, six automakers including BYD, Ford [F:US], General Motors [GM:US], Jaguar Land Rover, Mercedes-Benz [DAI:GR], and Volvo [VOLV:US] pledged to phase out fossil-fuel-powered vehicles by 2040.
BYD installed 25.06 gigawatt-hours (GWh) of power batteries in 2021. It ranked second in China, right after another battery producer Contemporary Amperex Technology (CATL) [300750:CH] which installed 80.51 GWh in 2021. The strong competitiveness in the cell industry drives BYD to embrace the transition to new energy vehicles (NEVs). The company aims to sell 1.2m units of NEV in 2022 after its NEV sales skyrocketed by 231.6% YoY to 593,745 units last year. The ambitious target was based on China’s resolution to boost NEV sales. In March 2022, China’s National Development and Reform Commission (NDRC) and the National Energy Administration (NEA) released a plan that the country’s new energy vehicle (NEV) will account for around 20% of all new car sales by 2025. The plan also aligns with China’s carbon-reduction goal of reaching carbon emissions peaks by 2030 and carbon neutrality by 2060.