Takeaways

• Top Chinese battery manufacturers achieve super-low costs through several key strategies that give them a cost advantage, particularly as price competition intensifies and puts pressure on profit margins.
• We understand BYD (similarly to CATL) cell production cost is just above $40/kWh versus around $55/kWh for the other Chinese manufacturers, all significantly below Western players.
• Although short-term investment decisions have become more cautious, geographical diversification and technical innovation remain key priorities to strengthen their competitive edge.
• All the elements mentioned in this note only confirm the very favourable points from which BYD benefits with valuation multiples remaining very attractive despite the recent sharp rise in the stock price.