BYD (比亚迪股份有限公司)

Although BYD’s overall year-on-year sales decreased by around 10 percent in 2019 due to the low number of sales in the China sales region, its share of sales from battery electric vehicles still remains high. BYD’s low-carbon vehicle sales have shown remarkable growth over the assessment period, increasing from 4 percent of total sales in 2014 to 48 percent in 2019 – the highest share of sales from low-carbon vehicles of all companies assessed apart from Tesla. This rapid growth in low-carbon vehicle sales has resulted in the necessary reduction in its vehicle in-use emissions to align with its low-carbon pathway. BYD is also projected to remain within its emissions budget over the coming five years.

The company audited its annual emissions data and states that it has set emissions reduction targets, though no further information was found regarding these targets. BYD has also continuously tracked its carbon emissions, thus providing the opportunity to further develop its long-term transition plan by establishing robust and clear targets based off this historical data. The plan and targets can help guide BYD’s efforts to reduce its emissions by improving existing products and developing new business models to become more of a regional leader.

Without a clear public commitment by the executive team to focus on addressing climate change issues, BYD’s successes to date on emissions reductions may not be sustained. The company should appoint climate experts to the board, carry out scenario analysis and stress testing to inform public emissions reductions targets as well as embed climate change management into all aspects of its management, including incentives. This will enable the company to build on its current strong sold product performance for any expansion plans, even if government support is diverted away from low-carbon – or ‘new energy’ – vehicles.

Visible financial commitments to develop the breakthrough technologies required to bring low-carbon vehicles to market at scale is a strong indicator of a company’s overall commitment to a low-carbon economy. The fact that BYD has published the R&D expenses for some of its low-carbon business models is a good start. However, the company should further break down its published R&D expenditure and share information on its R&D spending on climate change mitigation technologies at the corporate level to display its commitment to the low-carbon transition.

BYD does not publicly disclose any details about its emissions reduction targets or low-carbon transition plan. However, the company is actively developing business models that contribute to its ‘new energy’ vehicles and low-carbon transition.

BYD has continued its investment in and business activities around low-carbon vehicles, renewable energy infrastructure and alternative mass transit vehicles such as buses. However, BYD has not published robust evidence concerning its overall greenhouse gas emissions reduction, climate governance or low-carbon transition efforts.

BYD continues to develop new low-carbon vehicle models, which accounted for 48 percent of the company’s sales in 2019. Despite the fact that the withdrawal of subsidies from the Chinese government in 2019 may put pressure on profitability, BYD continues to create innovative technologies and sell low-carbon vehicles believing that the market for these vehicles will further develop.

BYD is actively developing new low-carbon vehicle models. Between 2015 and 2018 the company had the highest number of annual low-carbon vehicle sales globally of any company assessed. Furthermore, BYD’s electric bus sales are increasing both domestically and globally. By 2019, its electric buses had been sold to more than ten major cities in China and more than 50 countries abroad improving the electrification of mass public transport.

BYD is actively developing alternative mass transit vehicles, low-carbon vehicles and renewable energy solutions. A wide range of stakeholders, including investors, are increasingly focusing on the company’s performance in a low-carbon future. However, BYD has shown inconsistency that may affect its progress towards a low-carbon transition. For instance, the company lacks climate governance and emissions reduction targets to guide its overall decarbonisation efforts and assure stakeholders that the company will be on track to align with its low-carbon transition pathway and remain profitable in a low-carbon future.