Shocking Report From China Confirms Worst Fears About BYD
Over the past 18 months, I have made several videos about Warren Buffett selling BD stock. And I honestly couldn’t understand why Warren Buffett was selling a success story. Body, I mean, one of the most successful car companies in the world. One of the most amazing growth stories in the history of the modern industrial complex. I mean, this is a story that should be celebrated. What on earth was Warren Buffett doing? Why was he selling the stock and doing it consistently? Not just one sale, but numerous sales coming one after the other. I was completely baffled. After publishing this video, I’m probably never ever ever going to get invited by Billy D to anything ever again. But um I don’t do this job to get invited to car events. I do this job to inform people on what’s really going on, even if that’s unpopular. And I had thousands of comments telling me how much of a an idiot I am or saying all kinds of abusive things. I mean, thousands and thousands and thousands. But I’m not here to please people. I’m here to provide them with information that they wouldn’t otherwise receive. And this report, I wasn’t going to publish this, but I started reading it and I thought, “Wow.” Okay. Wow. Hello, my friends. Welcome to the channel. I’m Sam Evans. You’re watching The Electric Viking. This information is somewhat shocking because I haven’t published anything on this before. I haven’t been able to find sources that were credible enough that I feel comfortable publishing it. Even though many of you have sent me emails saying this is happening. I think uh some YouTuber has made these claims must be true. Must be true. Must be true. And my response would be can you actually provide me with verifiable sources? Well, I suspect this is a good enough source to meet the credibility requirements of most of you. A few a few days ago, Yoken Sebert, who founded the consulting firm JSC Automotive, which specializes in the Chinese automotive market, he actually interviewed um on what’s really going on here and it was scary. He founded this company in 2007. The company is headquartered in Shanghai and previously he worked as a market analyst at Milikin Airbag in Belgium among many other positions. Seabert studied industrial engineering at the technical university of Damstart and is clearly an expert analyst on the Chinese automotive industry and lives in China. Spiegel from Germany interviewed him. Mr. Sebert, what is currently going wrong in Chinese car market? Speet responded saying this can be clearly seen in the case of market leader BYD. It increased its car production 10fold between 2020 and 2024 to 4.3 million vehicles most recently. This year that figure will be higher. BD financed this turbocharged growth to a significant extent on credit. What’s so bad about that? Well, Cbit says the growth occurred at the expense of BYD’s suppliers. The company simply extended payment terms paying its invoices after 270 days instead of 60. Body used the money to finance its expansion. What are the consequences of this practice? As sprigle seat says growth has become disconnected from real demand. The manufacturer is building far more cars than customers currently want to buy. To get rid of them, Body is keeping prices artificially low, thereby fueling the price war in China. In May alone, the company reduced its car prices by around 33%. As you guys know, there has been fur in China recently. There was a meeting between automotive industry heads and the Chinese government where the automotive industry accused BD of this practice and of hurting the industry. Body retaliated and did not agree, did not admit that this is true. They simply attacked those car brands and retaliated in a tit fortat argument. Spiegel went on to say, “Duity’s competitors act the same way.” SEIT. Many are following suit and lowering their prices as well. We’re now dealing with predatory pricing in China with hardly anyone making any money. However, competitors like Sake or Lee Auto are in a better financial position. They haven’t taken on as much debt to their suppliers. Spiegel is the market at risk of collapse. See, at the very least, it’s a painful downsizing curve. The federal government now requires automakers to pay within 60 days. So the federal government has completely changed the way that BOD has previously done business. The this means BD will need billions of dollars in cash in the short term to pay its suppliers. The company will also have to stop charging prices that are sometimes below production costs. Spiegel, is the situation really that dramatic? Last year, Build announced record profits. Analysts are now taking a much closer look at Build’s business figures. This is worrying. There’s been reports that they’ve been fudging the numbers. I haven’t reported on this because I wasn’t sure if it was true. There’s been many reports making these claims. Current liabilities have increased roughly fivefold in the past four years. This cannot continue in the long run. And to be fair, Bill is coming out with new models of cars like every single week. It’s shocking. I don’t report on even half of them. In my view, says Cbert, it is no coincidence that Burkshshire Hathaway, the private equity firm of US investor Warren Buffett, began reducing its stake significantly in BYD beginning in 2022. What happens if China’s car market collapses? Well, SIT said this, “If the bubble bursts, car sales in China will decline by 20 to 25% in the next 2 years. We expect manufacturers across the industry to reduce production and as a result, close factories like Nissen has been, like Volkswagen just did recently as well. This will cost many jobs. Furthermore, it’s likely that some international suppliers will have to exit the market like Mitsubishi just did last week.” “Who are you thinking of?” said Spiegel. Stalantis, the parent company of Opel, Peugeot, Fiat, and Chrysler, is already virtually no longer represented at all in China. There are also Asia manufacturers like Hyundai, Hyundai, Kia, and Nissen that sell only in small numbers there. They are likely carefully considering whether their market presence is even worthwhile at all for them or whether it makes more sense to invest elsewhere. Now, to give you some context, Hyundai did build a car factory there. I think it cost them $1.4 billion US. They sold it a few years later for around $220 million US. Spaggel, what’s in store for Volkswagen? The former market leader in China. On Friday, the company announced it would close its factory in Nanjing. See, Volkswagen along with its partners operates 39 plants in the People’s Republic. That’s far, far too many. The company will likely sell fewer cars in the future. The plants are already underutilized. Some of them losing money. Volkswagen will have to reduce capacity otherwise its profitability is at major risk. So that report has just emerged from China and I believe this is a credible report. This is not a YouTuber trying to get clicks to make money, but um an actual automotive industry analyst who’s been working in the industry for more than 20 years and is actually based in China and this is their job to analyze what’s actually going on. Now, I don’t know how to feel about this. This is um some pretty staggering information. I personally think that um as Sebert said, the automakers that are really struggling in a big way are actually the legacy automakers in China because their demand is continuing to drop. But clearly there is a lot of debt going on and some of this debt we don’t know about. Some of it’s being hidden um in ways like BYD were doing taking 260 days to pay suppliers. It’s like a way of um being able to borrow more money. So, how will this all play out? Things are going to change. Clearly, things are changing. Some of this information is coming to light. Um dealership dealerships are sometimes telling this information to the media. We’re finding out this stuff and it’s um it’s certainly kind of a scary situation. The Chinese government though does not want the automotive industry to contract. They are determined to have it grow. They are doing things like providing huge subsidies. Bring in your old car, whether or not it’s a piece of junk or not. We’ll give you a pretty good subsidy for that car. We’ll pay you cash. Get a new car and we’ll give you a subsidy to buy that new car as well. There’s a lot of subsidies in the market keeping things afloat. Now, I personally I like the subsidies. I think they’re good. It’s getting people out of these old internal combustion cars that pollute and cause major if you’ve been to Beijing in the past. Years ago, you couldn’t breathe the air there. You wouldn’t want to go outside on many days. That’s changed. That’s changing in a big way. Shanghai, Guangjo, many countries, many, many cities, I should say. In China, the air pollution has dramatically changed and these subsidies were needed to get that to happen. How do you guys see this playing out? Let me know what your thought your thoughts are in the comments. And thank you for watching. Bye-bye.
Shocking Report From China Confirms Worst Fears About BYD
A shocking report reveals BYD is facing serious allegations of labor abuse tied to its operations in Brazil, where over 200 workers endured “slavery-like” conditions. At the same time, Chinese regulators found BYD fraudulently claimed millions in EV subsidies, deepening scrutiny amid an intensifying price war.
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