BYD’s subsidiary BYD Auto Industry Co. Ltd. and the Management Committee of the Shen-Shan Special Cooperation Zone have entered into an agreement under which BYD will invest an additional RMB 20 billion to develop the second phase of its auto industrial park that lies within the cooperation zone. Situated between Shenzhen and Shanwei, the cooperation zone is a government project that aims to create a new prefecture-level city and spur socioeconomic revitalization in this part of Guangdong Province.
The second phase of the auto industrial park will contain production facilities for the critical parts of BYD’s new energy vehicles. Once built and in operation, the facilities of the second phase will be able to support the annual production of 600,000 vehicles. Earlier on August 13 last year, BYD Auto Industry and the management committee of the special cooperation zone inked a strategic cooperation agreement that will see BYD invest RMB 5 billion into the first phase of the auto industrial park. With the latest supplemental agreement, the entire auto industrial park will be generating an estimated annual revenue of around RMB100 billion.
Besides Guangdong, BYD has also signed framework agreements with the governments of other Chinese provinces and cities to establish new manufacturing hubs for traction batteries and vehicle parts. In Xiangyang (Hubei Province), BYD has initiated a three-phase industrial project that is worth around RMB 10 billion in investments. According to the reporting by other news outlets, the Xiangyang project is expected to accommodate production capacity for battery cells, battery modules, electrode materials, electric motor systems, ECUs, HVAC systems, gearboxes, wiring harnesses, etc.
Moreover, BYD has partnered with the government of Changchun (Jilin Province) and compatriot carmaker FAW Group to form a joint venture for the manufacturing of traction batteries. Located in the Changchun International Automobile City, the new entity will build up a production capacity of 45GWh for the blade battery that is being developed by another subsidiary of BYD. Additionally, BYD is reportedly to have sealed a deal with the government of Fuzhou to build an industrial park in the Fuzhou High-Tech Zone for the manufacturing of batteries and vehicle parts. This agreement was made near the end of last year.
Nikkei Asia recently reported that the sales of BYD’s hybrid and electric cars surpassed the sales of Tesla’s electric cars in China last year. Hence, the growing domestic demand for new energy vehicles has provided the motivation for these ambitious capacity expansion projects.