BYD’s gas-guzzling shutdown leaves a major loophole

A BYD e-SEED GT EV concept is unveiled on stage during the Shanghai Auto Show in Shanghai, China April 16, 2019. Picture taken April 16, 2019. REUTERS/Yilei Sun

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HONG KONG, April 4 (Reuters Breakingviews) – Chinese BYD (002594.SZ), (1211.HK) Friday noted it stopped making vehicles powered only by internal combustion engines. But it’s not yet scrapping gas-guzzling engines: sales of its hybrid cars are soaring, rising 857% to 141,514 in the first quarter from the same period last year. That means hybrids accounted for nearly half of BYD’s passenger vehicle sales during the period.

Automakers, including Toyota (7203.T), Read More, have found a lucrative niche in transition technology. BYD’s Qin and Song models are an easier sell for customers who can’t or won’t go all-electric. Their popularity helped the Warren Buffett-backed brand be the world’s best-selling maker of new-energy vehicles — a term that covers hybrids as well as pure electric cars — in the first two months of 2022, according to Bernstein, with 16% market share. , versus Tesla (TSLA.O) 13%.

However, Beijing policymakers back battery power to reduce carbon dioxide, and hybrids bloat BYD’s new energy average vehicle emissions. Even Li Auto (2015.HK) – the $27 billion Chinese brand built on hybrids – plans to launch all-electric models soon. BYD’s ride may not last. (By Katrina Hamlin)

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Editing by Antony Currie and Thomas Shum

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