Chinese electric vehicle leader BYD plans to increase its fleet of car carriers to eight within in two years to boost its export capacity, as the country’s dominance in new energy vehicles looks likely to extend to the seas.
“BYD is going to deploy seven car carriers in the coming two years to ease the shortage of shipping capacity for automobile exports,” company founder and chairman Wang Chuanfu said last month.
In January, a ship carrying BYD’s EVs and other NEVs set off for Europe from Xiaomo International Logistics Port in Shenzhen. BYD Explorer No. 1, a roll-on, roll-off (RORO) ship, was manufactured by CIMC Raffles, a shipbuilding affiliate of China International Marine Containers.
The vessel has a 7,000-vehicle capacity and was ordered by London-based shipping company Zodiac Maritime. It is the first car carrier built in a Chinese shipyard exclusively for the export of domestically produced vehicles, CIMC Raffles said.
CSSC Offshore & Marine Engineering, a subsidiary of China State Shipping Corporation, also plans to build two ships capable of carrying 7,000 BYD vehicles. Construction of the two ships has already begun in Guangzhou.
With car carrier charter fees rising, BYD also hopes to reduce transportation costs by securing its own vessels.
China exported 4.9 million vehicles in 2023, up 58% from 2022, and surpassed Japan to become the world’s top exporter. Exports of NEVs, including plug-in hybrids, increased by 78% to 1.2 million units. BYD increased overseas NEV sales every month last year, reaching 240,000 units for the full year.
However, transport capacity has not kept up with rapidly expanding exports. As of November, there were 40 car carriers owned by Chinese ship owners, according to UK company Clarksons Research.
The combined capacity of all 40 ships is roughly 110,000 vehicles, far below Japan’s 1.6 million, Norway’s 930,000 and South Korea’s 490,000.
Japan’s automobile exports got into full swing in the 1960s and increased from 1.1 million units in 1970 to 6 million units in 1980. Japanese shipbuilders, as well as those in Europe and South Korea, kept pace by producing more and ever-larger car carriers, including groundbreaking RORO vessels.
In China, demand for car carriers is just now rapidly increasing, driven by NEV exports. As of November, Chinese ship owners had placed orders for 37 car carriers with a combined capacity of 290,000 units, the highest current level in the world.
Chinese shipbuilding companies, ship owners and shippers—including automakers—are working together to increase exports.
China is focusing on Europe for NEV exports. The region’s consumers tend to be environmentally conscious, and local car manufacturers have yet to introduce any runaway EV successes.
BYD is expanding its sales network in Germany, Italy, France, Spain, and elsewhere. With models like the small Dolphin EV and the electric sport utility vehicle Atto 3, the company is working to quickly establish brand recognition before local competitors can catch up.
Other Chinese automakers are also rushing to secure transport capacity. An RORO ship ordered by state-owned SAIC Motor and built by CSSC also set sail for Europe in January.
SAIC plans to secure 14 carriers, including large vessels that can carry 9,000 cars, within the next three years through SAIC Anji Logistics, an affiliated logistics company. SAIC said it will “support the acceleration of exports of Chinese brands.”
The trend of increasing exports is likely to continue, with the China Association of Automobile Manufacturers projecting exports in 2024 to grow 12% to 5.5 million units.
At the same time, Europe is wary of the influx of Chinese EVs and is starting an investigation into Chinese government subsidies for EVs. In an effort to assuage those concerns, BYD has announced plans to build a factory in Hungary within three years.
Although there are concerns that increased local production could lead to a car carrier supply glut, Masashi Hodotsuka, of the Japan Research Institute, said, “Rather than each automaker operating car carriers exclusively, they can reduce risks by jointly transporting each other’s brands.”