Waiting around to charge an electric vehicle (EV) can be annoying. But that itch may have been greatly eased by the Chinese EV and hybrid maker BYD (OTC: BYDDY). Earlier this month, it unveiled its Blade Battery 2.0 and flash charging system. The company claims that used together, they can bring a suitable vehicle from a 10% charge to 70% in about five minutes and from 20% to 97% in about 12 minutes.
This would suggest that BYD has a game-changing EV product on its hands. Is it reasonable for that? Tesla (NASDAQ: TSLA ) Are investors worried, and maybe even thinking about selling their stocks?
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First, a note. Tesla and BYD are not direct competitors in the US, where the former is popular and the latter is effectively non-existent. This is mainly because our government imposed a 100% tariff on EVs made in the Asian country.
The two are actually colleagues in some respects. Like BYD, Tesla is working hard to develop its battery unit in-house, but its strategy differs significantly from that of its vertically integrated Chinese peers. The American automaker produces some batteries at home, supplementing them with products from foreign manufacturers — including BYD. All BYD cars, meanwhile, use BYD batteries.
Tesla’s latest battery cell, the 4680, is very reliable and has a relatively long range when charging. Its charging time is slower than the Blade Battery 2.0. However, unlike the 12 minutes it takes to charge BYD’s power pack from 10% to 97%, Tesla’s battery needs 20 to 25 minutes.
Will most EV owners choose a battery that offers more range, even if it means longer charging times? Or will they favor a lower-range product that charges more quickly and hit the road before they’ve finished buying enough coffee?
I think the average consumer would go for number two. Americans, in particular, don’t like to wait.
I think, then, that Blade Battery 2.0 could be a significant threat to Tesla’s battery-making efforts. But that’s the catch; Since Tesla is open to outsourced components, if a competing battery technology proves too competitively powerful, the company could adopt it (albeit at the expense of its Supercharger network). Tesla does not sell its batteries to others, so it has no business to lose with such items.
