by Brandon Porter and Matthew Wang
Stella Li is President of BYD Motors Inc., a Southern-California based company that imports renewable power products, green-energy products and zero-emissions vehicles from China. Here she shares her insights on the growing electric vehicle industry and her company’s plans for the future.
Innovare: So, at our school, and in Los Angeles, it seems like every other parent has a Tesla car. But many people fail to realize that BYD is much larger than Tesla in terms of sale and units shipped. Do you have a plan in place for creating more awareness of BYD in American markets?
Stella: Yes, that’s a very good question. But first I need to start with BYD, because our position on sales is very different from Tesla. We’re more focused on the fleet industry transaction, which, in our view, is the most effective way to help reduce pollution and combat climate change. There’s some data from the big urban cities such as Los Angeles, Beijing, and Shanghai, showing that inside the city urban area 50-60% of pollution is from vehicles. We’ve learned that only 1.2% of vehicles on the road in cities are public transportation, which is the buses and taxis, but that they contribute 30-35% of that pollution. It’s very simple, they’re running 20 hours per day on the street, but the private car is only running 2 hours per day, right? So the impact, if we target this 1.2% population, is we can immediately avoid 30-35% pollution for the city. So this is what is happening in China now.
Then, another second group contributing to pollution is the heavy duty trucks, including the refuse trucks, delivery trucks, and other commercial fleets. This total vehicle population is around 7.2% or maybe 8%, but they contribute another 35% of the pollution out of the whole vehicle population. If regulations require that these trucks electrify, we can immediately reduce 35% of air pollution.
So, then the third portion is consumer cars, which is taking longer to electrify. For example, imagine you like a certain kind of a car, you’re not thinking about the environment, right? You’re more thinking about which car you like. So it’s very hard to make sure people buy the EV. And you’re talking about several hundred million people that need to be convinced, that’s what takes a long time.
But then in terms of BYD, we started with batteries, and we are the largest battery manufacturer. It’s our core technology and what we felt was most beneficial to society, so we put the most effort there. Tesla takes a different approach. Tesla is more promoting consumer cars with a luxury brand. For BYD, the Chinese market is the biggest market because this is the country that requires zero emission cars, in part because of pollution, and in part because of less access to oil. In the U.S. there is less pressure on that. That said, in California on Friday, BYD just had our grand opening for a new 450,000-square-foot facility that can produce 1,500 electric buses annually, making us the largest electric bus manufacturer outside of China. The governor just signed a bill to approve $1 billion in funding to subsidize the electrification of the heavy duty vehicles on the road. And then, LA Metro has announced that by 2030 all their fleet will be zero emission. You can clearly see California is taking the same path as China to be more focused on heavy duty vehicles, including buses and trucks.
Innovare: The market for electric vehicle battery technology is very important, can you give us a little insight into BYD’s battery technology and how you’re pioneering that?
Stella: BYD has always been very strong on materials science and battery technology. So far, we have the 16 gigawatt hours battery in production, and we are adding a 20-30 gigawatt hours facility. At BYD our strategy is very clear and I would say very smart, because own products are going to drive all this demand. The buses, the trucks, and also the taxi fleet are going to drive all the output at our battery facilities. With consumer cars, it’s very hard to predict how much you will sell, and you can invest several billion in manufacturing a battery that someday you cannot sell and you start losing money. But for BYD, we’ll always have our very strong fleet business, and that will be the main baseline to drive our production.
Innovare: BYD has established itself in a very prominent position in the electric bus market. Do you feel there are any companies that you need to watch out for that are competitors, and if so, how do you manage that?
Stella: This is a very good question. So, you can see recently for the buses, even in the U.S., a lot of new competition is coming from traditional bus manufacturers that have started to announce their electric bus lines. So then, for BYD, we’re in the leading position at 80% of the electric bus market, but they are only less than 10% of the total commercial bus market, so we still have a lot of space to go. In order for us to continue in the leading position, we need to make sure our next generation bus will have a longer range and then our after-sales need a mostly intelligent system. So, for example, we’re trying to introduce the buses by next year that can drive 250 miles to 300 miles per charge with the air conditioning on with people in the bus. At the same time we’re going to introduce what we call an intelligent, after-sales system that allows us to monitor battery issue remotely. We also need to increase our marketing, PR, and consumer education to continue leading the industry. That said, we are the only company that owns battery technology manufacturing in-house and also produces engines and vehicles in-house.
Innovare: So, what are your predictions for future electric vehicles, buses included, and how do you think EVs have changed over the years since you first started?
Stella: So, in thinking back to 1995 when BYD started, it started with 20 people, and they wanted to be the largest battery manufacturer in China. But then we achieved that and set another goal, we wanted to be the largest rechargeable company in the world. So now, every time we set a goal that we know is achievable, at the same time we are looking for the next goal. Now today, BYD is focused on this something we call the total green technology solution for green transportation. So, you will see BYD is always looking for the small step and the big dream and pushing ourselves while positioning ourselves to expand in the area. In 1996 when I joined BYD I could never imagine that we could be like we are today.
BYD will continue to invest in a lot of EV technology to get a lot more people affordable electric vehicle technology, so next year we’re going to introduce better performance, low-cost EV into the market. After government subsidies kick in, people would be able to buy an EV at the same price as they pay for a gas car. At that moment, then the whole EV industry will start taking off.
But then the challenge for us is how we can have enough talent to grow at the same speed as we have already. Because for each area we’re into, we need the talent, the best talent in the industry to help us. BYD has some weakness, we need to enhance our branding and marketing capability to make BYD more well-recognized globally, not only in China. That is a challenge that we’re facing, we’re always saying that BYD is more like an engineering company, we’re more focused on the B2B, so the next step is how we can do a better job with B2C.
Innovare: How has BYD been looking into in the vehicle industry autonomous driving capabilities? Is BYD investigating and researching autonomous technology for their buses and other vehicles?
Stella: Another very good question. So, for BYD, we have a little bit of a different view than other auto companies. GM and Ford, they spend huge money trying to acquire the company to do automatic driving in house. But BYD will have less investment here because we are in the IT industry. Like if you see today’s cell software choices: iOS from Apple, Android from Google, Windows from Microsoft. Everything is uniform into 2-3 platforms. Before these final three we had many, many different technologies. So our idea is that Google is in the leading position technology-wise in terms of automatic driving. And then Uber is also making a big commitment to do automatic drivers. So the kind of thing that happened before with cell phone is going to happen with automatic driving, but who is going to be the final winner? We don’t know. Because in the end we will see who has the best deep-learning, self-learning story and then also who has the massive data, then they have the best, most robust technology. In the hardware side you have the laser radar, then you have all the steering cameras. But which technology will be the final winner? We aren’t sure. At this stage, we don’t need BYD to invest in something different, just like all the big guys, when later we can pick up the most popular and best performing one to integrate into our system. So that’s BYD’s strategy, we are watching closely but we will not invest in house. But we will be very open to working with different companies who are the major players now, then wait for several years to see who will be the winner, then we will jump in.
Innovare: That will be the big shift in the market.
Stella: A very big shift. But then if we, as long as we keep us the big giant supplier…
Innovare: You can capitalize on…
Stella: We can capitalize here and then all the like automatic driving software companies…
Innovare: They’ll come to you…
Stella: They’ll come to us.
Innovare: You’ll get to pick them. They’ll fight for you.
Stella: Exactly, exactly.
Innovare: Very smart, very smart.
Stella: That’s our strategy. But we don’t need to spend several billion to do so.
Innovare: It would be a waste with so many companies and money already invested in this research. There’s no point.
Stella: Yes, just like in Microsoft, even 5 years ago a lot of people were talking about the Microsoft Windows phone that now today nobody uses.
Innovare: It was a big flop. And they spent billions of dollars on it, so.
Innovare: Very smart. You are, of course, one of the most successful women in business in STEM, not just in China but globally. In America, one of the biggest problems is getting young girls and women interested in STEM. Do you have any advice for anyone who doesn’t think they can do this – any young girls who want to go into STEM?
Stella: You have very good questions today. In the U.S., the whole environment, like TV shows for teenagers, they always position girls as fancy and more focused on the arts, smart on fashion, and popular, right? But then we position boys as engineers and needing to be doing the genius things, so this automatically gives the indication to the girls that STEM isn’t for them. In China, even when I was growing up, at least 8 out of the top 10 of every class were girls, because they are good at math, they are good at chemistry, they are good at physics. But here is almost the whole environment, culturally. You have indicated that the girls should focus on more arts, focus less on engineering and STEM, and then even if they are good at math they mentally tell themselves they are “not good” because they are girls.
Innovare: So they try and fit into the sort of role that you’re saying they think they’ve been given.
Stella: I think that’s the biggest problem. So in the U.S. we need to solve this one, we need to copy a similar custom to China. In China, they equally educate the kids, then we always encourage the best students to be even more outstanding, to do more work. My Dad always told me, if you can learn, if you’re good at math and also physics and chemistry, then you can always, always find a well-paying job. So that is my motivation, but here the motivation is different. But here in the U.S. the motivation for girls tends to be very different. But you will find that some families, they don’t have this kind of culture for their daughters. And many girls in the U.S. are very smart, they are very outstanding at school and in STEM and engineering. Very smart. Once they realize they can do it, they are very good, very concentrated.
Innovare: Thank you so, so much for your time. Amazing answers. It was very insightful and I know a lot of people are going to find this very interesting.