Ordering 4 more of the world's largest car carriers! BYD accelerates its "shipbuilding and going global" strategy.

BYD, a privately-owned automotive giant, has placed another order for four of the world's largest dual-fuel car carriers, bringing the total to six car carriers ordered in just two months, for a total value exceeding 4 billion yuan. This demonstrates BYD's acceleration of its shipbuilding and overseas expansion efforts in response to the call for "national cars and national destiny."

Cosco Shipping Heavy Industry to Build! BYD to Order 4 of the World's Largest Car Carriers

According to TradeWinds, BYD has signed an order with Cosco Shipping Heavy Industry for four 9,400-vehicle dual-fuel car carriers. Cosco Shipping Nanjing Jinling and Cosco Shipping Heavy Industry (Jiangsu) will each build two vessels. Each vessel will cost at least US$100 million and is expected to be delivered starting in 2025.

If the news is true, these will be the world's largest dual-fuel car carriers. Clarksons' data shows that the largest vessels currently in the existing car carrier fleet and order book are eight 9,100-vehicle LNG-powered/ammonia-ready/methanol-ready car carriers ordered by Hoegh Autoliners from Cosco Shipping Heavy Industry (Jiangsu). BYD's newly ordered vessels will have a capacity of 9,400 vehicles.

BYD's new order will further solidify Cosco Shipping Heavy Industry's leading position in the global car carrier construction sector. According to Clarksons' data, three of the top five shipyards with car carrier orders are from Cosco Shipping Heavy Industry: Cosco Shipping Heavy Industry (Jiangsu) with 13 vessels, Cosco Shipping Nanjing Jinling with 12 vessels, and Cosco Shipping Weihai Jinling with 10 vessels, totaling 35 vessels, far exceeding other shipbuilding groups. This does not yet include BYD's latest order.

This year alone, among the 45 new vessel orders received by Cosco Shipping Heavy Industry, 20 are car carriers, the highest proportion, followed by 18 chemical tankers.

It is understood that BYD currently mainly exports vehicles through cooperation with professional operators such as COSCO SHIPPING Special Lines and China Merchants Roll-on/Roll-off. Mid-year, news surfaced that BYD would build its own fleet, potentially becoming the second domestic auto company after SAIC Motor to own a self-operated fleet.

Reports suggest that BYD plans to order 6-8 7,700-vehicle dual-fuel car carriers and has contacted several Chinese shipyards, including Cosco Shipping Heavy Industry, Guangzhou Shipyard International, Huangpu Wenchong, and Zhejiang Yangfan Group. Delivery of the new vessels is expected to begin in 2025.

In November this year, it was reported that BYD ordered its first two 7,000-vehicle dual-fuel car carriers from Guangzhou Shipyard International, each costing approximately US$90-93 million, with delivery scheduled for 2025. Combined with the four vessels from Cosco Shipping Heavy Industry, BYD has ordered six car carriers in just two months, with a total value of US$580 million (approximately 4.033 billion yuan).

Strong Growth in New Energy Vehicle Sales Drives BYD's Overseas Market Expansion and Shipbuilding Efforts

BYD's ship purchasing plan is part of the company's strategy to ensure the stability of its supply chain. In June this year, BYD Chairman Wang Chuanfu stated at the annual shareholders' meeting that the company will increase its efforts in overseas markets in the future. The company currently faces significant pressure in developing overseas markets but has allocated scarce resources to advance the global electric vehicle market.

BYD's new energy vehicle business spans six continents, more than 70 countries and regions, and over 400 overseas cities. In the first half of the year, the group's new energy vehicle sales showed strong growth, repeatedly setting new historical highs, maintaining monthly sales of over 100,000 units for four consecutive months, with cumulative sales reaching 641,400 units. This has surpassed Tesla, making BYD the global sales champion of new energy vehicles, with a significant market share lead and rapid year-on-year growth.

Simultaneously with the rapid increase in exports, BYD faces challenges of tight car carrier capacity and soaring freight rates. Clarksons' data shows that the one-year daily charter rate for 6,500-vehicle car carriers has soared since 2021, reaching US$105,000 per day in November this year—double the peak price of US$52,500 in May 2008. Experts predict that daily charter rates may rise to US$120,000 or even US$150,000 in the future.

For Chinese automakers, including BYD, the rising shipping costs and aggressive expansion into overseas markets make shipbuilding and fleet formation unsurprising. In addition to BYD, it is said that Chery Automobile is also contacting various parties regarding the ordering of car carriers, and NIO is also planning to build car carriers.

Furthermore, SAIC Motor, as China's largest automaker, operates a total of 31 car carriers through its subsidiary SAIC Anji Logistics, which handles automotive and parts logistics. SAIC Anji Logistics also jointly established a joint venture automotive supply chain company, Guangzhou Yuanhai Automobile Ship Transportation Co., Ltd., with COSCO SHIPPING Special Lines and Shanghai Port Group Logistics Co., Ltd., in August this year. The company has disclosed shipbuilding plans, with plans to deploy more than 15 large 7,000-8,600-vehicle LNG dual-fuel car carriers from the second half of 2024.

The latest financial report shows that BYD achieved a net profit of 5.716 billion yuan in the third quarter of this year, a year-on-year increase of 350.26%, and a cumulative net profit of 9.311 billion yuan in the first three quarters, a year-on-year increase of 281.13%.

BYD noted that in the third quarter, despite facing multiple adverse factors such as a complex and severe economic situation, sporadic outbreaks of the epidemic, extreme high temperatures, and high prices of bulk commodities, the new energy vehicle industry continued to accelerate its upward trend. The group's new energy vehicle sales maintained strong growth, continuously setting new historical highs, and market share continued to strengthen, achieving significant year-on-year and month-on-month growth, leading to a significant improvement in profitability and effectively alleviating the profit pressure brought about by rising upstream raw material prices.