Comment: BYD reveal shows Chinese automakers are winning. But Europe can fight back.

BYD claims they can now charge an electric vehicle (EV) in 5 minutes, effectively giving their vehicles a range of close to 250 miles in the same time it takes to fill up your standard internal combustion engine (ICE) vehicle with fuel. This is a potential turning point for the automotive industry and just as pivotal a moment as the introduction of the moving assembly line, which brought ICE vehicles to the masses in the early 1900s.

China continues to gain an ever-increasing share of the global EV market, whilst more established automotive strongholds in Europe and America are playing catch-up. BYD is now the world’s largest EV producer and has been seen as a future success story by the likes of Warren Buffet, whose Berkshire Hathaway invested to the tune of $230m back in 2008. 

Despite this, the progress and innovation happening in the UK and Europe - in the automotive space - cannot be underestimated. The fundamental difference is that Chinese manufacturers have effectively begun with a blank canvas on which they began designing EVs, whereas the more traditional European manufacturers have had to pivot from the established production lines they have had for decades, which takes both time and capital.

Nyobolt, a University of Cambridge spin-out, showcased their EV battery technology back in June of 2024. The company was able to achieve an 80% charge in under 5 minutes. Add to this the innovation that is taking place in other key EV components - such as the motor system - and we paint an exciting picture of what will be achieved in the coming years. Where China has a leg up is in terms of massive government subsidies and the ability to build EVs with a clean design slate, but the innovation coming out of UK and European start-ups is set to give the right tools to western automakers for them to catch up.

Cost for all components of the EV has been China’s winning formula. Chinese battery makers supply some 80% of cells worldwide and dominate the mining and processing chain. They process over half the world’s lithium, two-thirds of its cobalt and more than 70% of its graphite, all essential for the batteries in today’s EVs. Beyond the battery, technology is playing a key role in cost reduction for the other vital components of the EV powertrain.

It is estimated that the top 20 Original Equipment Manufacturers (OEMs) globally will produce around 37 million EV powertrains each year by 2030, which equates to around 2 million powertrains per company. As this happens, it will not just be the battery where we will need to see continued improvements and cost reductions, but all other components. Taking an EV’s motor system as an example, with just a 10% cost saving of each motor system - a percentage that will increase exponentially as innovation improves - the average real-world saving for these companies would be in the region of around £1bn for large OEMs over the production run of a single motor system.

Going beyond just the EV market, on average, 800 million motor systems are produced each year for applications in everything from robots to wind turbines. Motor systems currently use half the world’s electricity and whilst the current technological innovation that is taking place will help reduce their costs, it will also help improve their efficiency and, in doing so, their impact on the environment.

The innovation story for engineering cannot ignore the rapid growth of AI, when it comes to achieving these new levels of efficiencies in the market. We’re now at a point where human engineers simply cannot produce the same number of designs as AI systems can. AI can explore hundreds of thousands of prototype designs in a matter of a few days and generate design options for manufacturers that can reduce the weight, cost, and materials of key components. This will accelerate the blockers associated with the EV transition and encourage more widespread adoption.

Beyond this, by saving all the data from these simulations, we can build unique datasets to train ‘foundation models’. Over the next few years, this will become petabytes of data and transform the way humans invent. The true value of AI lies in these focused and efficient models, taking us beyond the well-known ‘Large Language Models’, which are restricted to the language, text, and images available for free on the internet. 

The big bang moment for EVs has not yet happened. Whilst exciting announcements like this latest news out of BYD are pivotal moments, the real transition will not gather pace unless innovation in all aspects of the vehicle is realised. The UK and Europe have been slower off the mark when it comes to offering affordable EVs. But with a strong pipeline of innovation, led by engineering advancements through the use of AI, there is no reason why the more established automakers cannot catch up with the likes of BYD.

Dominic Vergine is founder and CEO at Monumo