Chinese EV manufacturer BYD edged out Tesla to take the top spot in our Future Readiness ranking released in May. It came as a report showed that BYD outsold its US rival in the European market for the first time. The feat is all the more impressive given that the EU has recently imposed tariffs on Chinese-made EVs.
So, what has changed? Elon Musk has promised many innovative products over the past decade, including robotaxis, humanoid robots, and fully autonomous driving. However, he has consistently missed deadlines, and some experts predict that most of these projects will be years in the making. Conversely, BYD’s Wang Chuanfu has remained focused on developing the company’s capabilities. Today, it is the world’s biggest EV manufacturer powered by batteries with an impressive range. In March, BYD announced a five-minute battery charge would add 400km of range.
Established in 1995, BYD was initially focused on producing rechargeable batteries, principally for mobile phones. By the late 1990s, the company had become a leading supplier, but the market was maturing fast, and margins were reducing.
Wang was searching for the next growth area. In the 2000s, the demand for simple, battery-powered bikes and scooters exploded in cities across southern China. They were cheap, practical, and perfect for overcrowded streets. Cities across Asia followed suit. Building millions of battery packs for bikes and scooters gave BYD a crash course in real-world durability. The company learned how to lower unit costs, extend battery life, and scale manufacturing under pressure. Then Wang spotted an even bigger opportunity: fleets.
BYD didn’t chase luxury sedans. Instead, it targeted the workhorses: buses, taxis, delivery vans, and trucks. In 2010, it rolled out its first all-electric bus, the 12-meter K9. and became the first in the world to commercialize electric buses at scale. In 2018, DHL began using BYD’s T3 electric vans in Shenzhen for last-mile delivery. By 2019, BYD had built 50,000 electric buses that served over 300 cities worldwide.
BYD doubled down on vertical integration, designing and manufacturing in-house batteries, motors, and electronic controls. Engineers had to master every nut and bolt. Where others saw scraps, BYD saw strategic ground. It quietly dominated the niches everyone else ignored.
The lesson is clear: always maintain a strong focus on your core business. Lose focus and passion for what you do, and the competition will slide in and take over.
There has been much speculation about whether Musk still cares about selling cars, with Donald Trump, SpaceX, X, and xAI all vying for his attention. Meanwhile, BYD has pulled ahead while receiving less government support globally than Tesla. BYD has surpassed Tesla in all key metrics, from pure EV sales (on top of a booming hybrid segment) to innovation output.
BYD’s success demonstrates how strategic patience and compound capability-building are redefining competition. When launching the e6 electric vehicle, first as a taxi and later for consumers, BYD wasn’t leaping into EVs like a startup. The company was extending a system of capabilities that it had spent 15 years perfecting.
This is the classic playbook of low-end disruption. Each rung wasn’t just a win but a learning platform for the next win: batteries taught BYD about energy storage, scooters taught it to build efficient electric drivetrains, and buses demanded system integration at scale. Each step up the value chain was built on the previous one.
In an era obsessed with disruption and chasing the next big thing, BYD’s methodical march reminds us that sustainable advantage often comes from mastering the boring stuff first.
In a 2011 Bloomberg interview, Musk laughed when the journalist suggested BYD as a potential rival for Tesla and chuckled: “Have you seen their car?”
Musk was looking at the surface and missed the iceberg beneath: 15 years of accumulated capabilities, millions of batteries tested, thousands of buses deployed, and a manufacturing system that could scale beyond anything that Silicon Valley had imagined.
Inside BYD’s mammoth Shenshan Auto Industrial Park factory in Shenzhen, the blade battery line runs with 50 workers per gigawatt-hour, 80% fewer than a typical Western plant. Autonomous robots shuttle trays between stations, while warehouse drones reorder stock by scanning QR codes overhead. The factory is a glimpse of the future.
In an era obsessed with disruption and chasing the next big thing, BYD’s methodical march reminds us that sustainable advantage often comes from mastering the boring stuff first. Our longitudinal data shows how a few selected companies have moved in our Future Readiness Indicator rankings over time. It’s hard not to be impressed by BYD’s meteoric rise to the top.
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