Forvia and Uber BYD wants to expand with Western partners

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The car manufacturer BYD wants to establish itself on the world market—also through partnerships. Uber and the supplier Forvia are expected to contribute to this and want to benefit themselves.

BYD aims to conquer the global market and is relying on partnerships to do so. The largest electric car manufacturer in China has just signed a contract with Uber that will put 100,000 of its electric cars on the roads of several continents. And BYD will collaborate with the supplier Forvia in its new factory in Hungary that is currently under construction.

In its partnership with Uber, BYD plans to provide 100,000 electric cars to Uber drivers at discounted prices over the next few years, starting in Europe and Latin America, and later also in the Middle East, Canada, Australia and New Zealand. The companies aim to reduce the total costs of owning an electric car for Uber drivers. This is expected to quickly electrify the Uber fleet globally, according to a press release from Uber.

BYD relies on well-known names

In the "global" deal between the American ride-sharing provider and China's most successful EV manufacturer, one country stands out for its notorious absence: the USA. Their president has recently imposed prohibitively high punitive tariffs on the import of Chinese electric cars.

For BYD, the collaboration with Uber is primarily a marketing success. The car manufacturer based in Shenzhen knows that it first needs to make its brand known beyond the professional world in Europe and other foreign markets. For this purpose, the OEM signed a contract with the German car rental company Sixt in 2022—again for 100,000 electric cars over a period of six years.

However, the car rental company had to change its plans after the residual values of electric cars dropped significantly in the first quarter of this year. It is not known whether or to what extent this development has dampened Sixt's enthusiasm for more electric cars from China.

BYD is building several factories

In any case, BYD can use every good headline that supports its push into the global market. For the same reason, the company has also just sponsored the European Football Championship and the "Copa America" with a lot of money.

Concerning the agreement with Uber, Stella Li, CEO of BYD Americas, said they are looking forward to seeing "our advanced electric cars soon become a familiar sight on the streets of many cities around the world." To pursue this vision despite the lifting of import duties for Chinese electric cars to 100 percent in the USA and—in BYD's case—to just over 27 percent in the EU, the manufacturer is currently planning or opening one car factory after the other: including in Brazil, Thailand, Turkey and Hungary.

For the new factory in Europe, the Chinese manufacturer has agreed a cooperation with Forvia. The French supplier will produce there itself and operate the factory with it. It is an "important milestone for both companies that we bring our partnership to Europe".

Joint ventures in several countries

Forvia and BYD have been working together since 2017. For example, in the joint venture "Shenzhen Faurecia Automotive Parts", which is majority-owned by the supplier. Also in various factories in China that manufacture car seats, electronics, interiors, and software for the automaker. Both companies have just jointly opened a new seat assembly plant in Rayong, Thailand.

"We are confident that this expansion will drive joint growth in the European market," said Patrick Koller, CEO of Forvia, when he inaugurated the new joint project with BYD in Thailand and announced the new cooperation in Hungary on this occasion.

In this case too, both partners are hoping for synergies. Forvia is looking to offset the revenue declines from its shrinking deliveries to European car manufacturers with the help of the successful Chinese. BYD can also hope that Forvia will not only build seats for it, but also facilitate its entry into the European market with its experience and industrial contacts.

Forvia: out of weak phase with Chinese customers

Forvia recently published its financial results for the first half of 2024 and revised its sales and margin forecasts downward. The automotive production in Europe has seen little growth in the first six months of this year, explained the Tier-1 supplier resulting from a merger between Faurecia and Hella, complaining primarily about "the slowdown in the pace of electrification in Europe."

Forvia and Uber hope for successful electrification in the global automotive industry. They are betting on BYD, one of the pioneers from the Chinese market. If the plan works, the cards may be reshuffled.