BYD is a microcosm of China’s pirate business model: copy, absorb, subsidize, scale, dump and dominate. It began life in 1995 as a battery maker. Today, it has blown past Tesla to become the world’s largest producer of electric vehicles, selling 4.6 million in 2025, including about 2.26 million pure battery-electric cars. Tesla, by comparison, delivered about 1.6 million.
This wasn’t always the case. BYD’s early cars were notorious for being copies of Toyota and Honda designs. Its breakout F3 model was a Toyota Corolla clone with Honda characteristics. But BYD copied fast, modified just enough and scaled at Chinese factory speed.
Then came the supplier play. BYD placed orders for parts, then dropped suppliers as it reverse-engineered components and built them itself. Today, it boasts batteries, motors, electronics, power trains, semiconductors and components all under one roof. This is the dark side of its vertical integration: Suppliers thought they had customers, only to discover they had become unpaid tutors.
China then further developed its pirate model, offering foreign automakers access to its vast consumer market through joint ventures and the devil’s bargain of forced technology transfer. Through this, it extracted engineering methods, factory discipline, supplier networks, quality systems and research capacity.
The likes of Volkswagen, GM, Ford, BMW, Mercedes and Toyota spent decades teaching China how to build world-class cars in exchange for market access. And BYD sat at the very center of this knowledge extraction: Daimler formed an EV joint venture with it. Toyota formed an EV research venture with it.
While Western CEOs thought they were selling cars, Beijing was buying time, know-how and dependency. Then BYD turned it all into a weapon.