BYD Revamps European Strategy After Initial Stumbles

MILAN/SHANGHAI: BYD, a prominent Chinese electric vehicle manufacturer, is restructuring its European strategy following initial missteps. These included an insufficient number of dealer agreements, a lack of local-market expertise in executive hires, and a failure to offer hybrid models in markets where fully electric vehicles faced resistance, according to six current and former BYD executives.

The company has acted quickly to rectify these early challenges in a crucial export market by significantly expanding its dealer network and offering substantial compensation packages to attract executives from European automakers, particularly Stellantis, the executives stated.

In December, BYD announced that plug-in hybrids would play a vital role in its European approach.

This decision followed advice from Alfredo Altavilla, BYD’s European special advisor and a key executive recruited during the European reboot. Altavilla informed BYD Founder and Chairman Wang Chuanfu that a solely EV strategy remained challenging in many European nations.

Altavilla told a news source, “He promptly understood the message and instructed BYD’s engineers to develop every new model in both EV and hybrid versions for Europe. Educating consumers about the green transition is essential.”

Reports have surfaced regarding the hiring of certain European executives, and BYD has openly acknowledged difficulties in the German market.

This marks the first comprehensive account of the issues identified by BYD executives and the company’s systematic efforts to resolve them. Most executives requested anonymity to discuss sensitive strategic matters. BYD has not provided an official comment.

In December, Altavilla announced in Italy that plug-in hybrids would be “central to BYD’s strategy in Europe” moving forward, deeming it “illogical” to disregard consumer preferences by exclusively offering EVs.

BYD initially approached Altavilla, a former Fiat-Chrysler executive, in June and announced his appointment in August. He had been working as a senior advisor to CVC Capital Partners, a private equity firm.

Altavilla subsequently recruited several promising managers from Stellantis, including Maria Grazia Davino to oversee operations in Germany and other Central European countries, Alessandro Grosso in Italy, and Alberto De Aza in Spain.

A current BYD executive stated that the Chinese automaker offered them considerable salary increases and a “chance for career advancement.”

A Stellantis source familiar with the executives’ work confirmed, “We were not pleased to lose these individuals.”

High Expectations

In another indication of BYD’s commitment to strengthening its European presence, the company appointed Stella Li, its No. 2 executive, to lead the region last year.

She succeeded Michael Shu, the former European chief, who had projected that BYD would secure at least 5% of Europe’s EV market before commencing production at its inaugural European facility in Hungary later this year.

However, BYD concluded 2024 with only a 2.8% market share and total sales of 57,000 vehicles, falling short of company targets. BYD’s urgency to expand in Europe is partly driven by its history of rapid sales growth in China, which has surged sevenfold since 2020 to 4.2 million vehicles in 2024.

Last year, BYD surpassed Tesla as the world’s leading EV seller and is now the sixth-largest global automaker.

BYD also faces competition from other Chinese automakers entering Europe, including Chery, Geely, Xpeng, and recently, Changan.

All Chinese automakers are under pressure to increase sales in international markets to improve profitability, which is challenging to maintain in China due to a prolonged price war among numerous EV brands.

BYD partners and industry analysts indicate that BYD has acknowledged its challenges in Europe and has taken decisive steps to address them.

Tim Albertsen, CEO of Ayvens, a major European leasing firm and a BYD partner, stated, “They are taking this very seriously, but it is important to recognize that establishing a strong position in Europe requires time. Similar to European or American automakers entering China, what succeeds for Chinese companies in China does not always translate effectively to Europe.”

There are initial signs that BYD’s European reboot is producing results.

BYD’s European sales, including the United Kingdom, have more than tripled in the first quarter of 2025, exceeding 37,000 vehicles, compared to roughly 8,500 in the first quarter of 2024.

BYD’s success in China is partly attributable to its capacity to “adapt swiftly to meet consumer demands,” according to Bo Yu, China country manager at JATO Dynamics, a research firm.

For example, in February, the EV giant undercut its Chinese competitors by providing its “God’s Eye” assisted-driving technology at no cost across its product range, including vehicles priced below $10,000.

At the Shanghai auto show this week, BYD presented a vast display of vehicles under four different brands, overshadowing the displays of most other automakers.

The company unveiled new models ranging from the affordable Seal 06 and Sealion 06—priced from around 100,000 yuan ($13,700) and 160,000 yuan, respectively—to the Yangwang U8L, an ultra-luxury three-row SUV, and the Denza Z, a high-end sports car concept.

Lacking Local Knowledge

Following its rapid growth in China, BYD expanded into Europe in 2023 with ambitious objectives. Former Europe head Shu stated last May that BYD aimed to become the region’s top EV seller by 2030.

However, the current and former managers noted that BYD failed to adequately study Europe’s markets beforehand.

For example, BYD invested in an expensive and prominent sponsorship of the Euro 2024 soccer championship in Germany, where it promoted itself as the leading “NEV” manufacturer, which stands for “new energy vehicle.” While this term is commonly used in China to refer to the combined EV-and-hybrid sector, the acronym is unfamiliar to German consumers.

BYD’s initial dealer network was also too small and concentrated in major cities, according to BYD sources.

BYD’s Davino, the former Stellantis manager responsible for German operations, told a news source in March that the company plans to expand its dealer network in Germany from 27 to 120 locations. Germany represents Europe’s largest auto market, with 2.8 million vehicles sold last year, whereas BYD sold fewer than 2,900 cars there in 2024.

Davino stated, “The German market is challenging. The basic elements are still lacking.”

Former managers indicated that BYD’s primary error before launching in Europe was treating it as a single market, similar to China or the United States, rather than a collection of distinct countries.

One former BYD manager likened Europe’s national markets to “frogs in a pan,” each jumping in different directions, adding, “BYD is only now beginning to understand that.”