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The top electric car maker that is not Tesla

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Electric car maker Tesla has a Chinese rival in its rear-view mirror.

Shares in BYD, or Build Your Dreams, jumped this week after it said it expected third-quarter profits to more than double compared with last year.

BYD is now ahead of Tesla in quarterly production – and second to the US car maker in global sales.

Its success is also a sign of just how much China’s auto industry is growing – China overtook Japan this year to become the world’s biggest exporter.

It’s a bright spot in a sluggish Chinese economy that is reeling from a severe property crisis and record unemployment.

But, on the less bright side, Beijing’s tensions are also growing with many of the countries – not least the US and European Union nations – that are export markets for its electric vehicles or EVs. As the world shifts to new, cleaner technologies, this is yet another example of how tough it will be for Western countries to move away from their reliance on Chinese goods.

How BYD built its dreams

It had an advantage from the start: unlike car makers who expanded to build electric models, BYD was originally a battery company that later started making cars.

Its chief executive Wang Chuanfu, now reportedly worth $18.7bn, was born in Wuwei County to a family of farmers in one of China’s poorest provinces in 1966. Mr Wang was orphaned as a teenager and raised by his older brother and sister.

After earning degrees in engineering and the physical chemistry of metallurgy, he co-founded BYD along with his cousin in Shenzhen in 1995. The duo made a name for themselves as manufacturers of rechargeable batteries – used in smartphones, laptops and other electronics – that competed with pricier Japanese imports.

It became a publicly traded company in 2002. And it soon diversified by purchasing a struggling state-owned car manufacturer, Qinchuan Automobile Company.

EVs were still in their infancy then but Beijing officials were looking for a gap in the market that China could fill. In the early 2000s, they introduced subsidies and tax breaks as the government prioritised renewable energy production.

For BYD, it was the perfect timing. The batteries it had been making were effectively the engines that would power EVs.

In 2008, US billionaire investor Warren Buffett bought a 10% stake in BYD Auto, saying that it would one day become “the largest player in a global automobile market that was inevitably going electric”.

And he was right. Today, China dominates global EV production largely because of BYD. And Beijing is keen to retain that lead – last June, it offered EVs $72.3bn worth of tax breaks over four years – the biggest incentive at a time when sales have slowed.

Analysts say BYD owes its growth to its original business – batteries. They are among the most expensive parts of an EV and making them in-house saves BYD a lot of money. Competitors, including Tesla, rely on third-party manufacturers for batteries.

BYD founder Wang Chuanfu at his Shenzhen headquarters
BYD founder Wang Chuanfu (L) with Hong Kong chief executive John Lee Ka-Chiu (R) at the firm’s Shenzhen headquarters

“The BYD Seal has a 15% advantage over Tesla’s Chinese-made base Model 3 sedan,” according to a UBS report.

BYD’s entry level EV – Seagull – sells at $11,000. Tesla recently unveiled a Model 3 sedan, whose starting price in China was almost $36,000.

And the Chinese company seems to be a hit beyond the EV market too – it beat Germany’s Volkswagen as China’s top-selling car brand earlier this year.

BYD versus Tesla

Elon Musk laughed during a 2011 television interview when asked about BYD and Chinese competitors. At the time, Tesla was still a young publicly traded company and had just unveiled a prototype of the first car they would launch – Model S.

Today, Mr Musk is probably regretting his response. Tesla sold 74,073 Chinese-made EVs in September, almost an 11% drop on the previous year, according to recent data from the China Passenger Car Association.

This is in stark contrast to BYD, which sold 286,903 cars during the same period. That’s an almost 43% jump in sales of EVs and petrol-electric hybrid models.

The ironic twist is that Tesla is credited with the growing popularity of EVs in China. Green incentives did not entice customers to buy EVs until Tesla arrived.

Even now, it is “one of the favourite EV brands in China,” said auto analyst Ivan Lam from Counterpoint Research, adding that it is still popular among younger buyers.

When China, the world’s largest car market, wanted to bring more EVs to the country, it loosened the rules to allow foreign firms to fully own manufacturing and sales operations in the country. Before that, companies such as General Motors and Toyota needed a local partner even to build a factory in China.

When that changed, Tesla jumped at the opportunity. Even today, Tesla is the largest exporter of China-made EVs and the second-biggest seller of EVs in China.

Mr Musk walks with Shanghai Mayor Ying Yong in the rain
Mr Musk met Shanghai Mayor Ying Yong in 2019 as work began on the new Gigafactory 3

Mr Musk has ambitious plans to expand his footprint in China and build enormous, battery warehouses that would act as an EV grid of sorts, powering charging stations.

But as tensions between Washington and Beijing grow, he has also turned his attention to India, which is selling itself as an alternative competitor to the Chinese market. Mr Musk has said Tesla will be in India “as soon as humanly possible” after a meeting last June with Indian Prime Minister Narendra Modi.

Will Chinese EVs win the race?

The lane is quickly narrowing for legacy car makers, whose business is still powered by fuel engines. Analysts predict a seismic shift by 2030 as green incentives to combat climate change expand.

Car manufacturers from Europe and the UK are struggling to compete. But wariness of China might prompt regulation that will make Europe’s market less accessible to competitive Chinese car makers.

The European Commission has launched an investigation into whether to set tariffs to protect EU manufacturers from a “flood” of imported, cheaper Chinese EVs, which it says benefit from Beijing’s subsidies. Its president Ursula von der Leyen said the EU had not forgotten how its solar industry was hit by China’s “unfair trade practices”.

But for now, BYD’s affordable, green cars are a hit in Europe, which is grappling with high inflation and energy costs.

The home of Mercedes-Benz, BMW and Volkswagen is struggling to keep up its production of EVs to the global market and the evidence was on display at Europe’s biggest car show in Munich in September – Chinese EVs were the hot topic.

“There’s demand everywhere in the world for affordability. And that’s a universal value proposition,” Mr Russo says.

And the place that can offer that to the world right now, he adds, is China.

— Reports /TrainViral

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Six tonnes of cocaine found in banana shipment

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Sniffer dogs in Ecuador have found 6.23 tonnes of cocaine hidden in a banana shipment, police say.

The dogs alerted their handlers, who seized 5,630 parcels filled with a white substance that later tested positive for cocaine.

The shipment was destined for Germany, officials said, and would have been worth $224m (£173m) had it reached its destination.

Five people had been arrested following the discovery, according to the prosecutor-general’s office.

Police said they had found the massive cocaine haul during a routine inspection of container stored at Posorja deepwater port south-west of Ecuador’s largest city, Guayaquil.

The cocaine parcels had been hidden beneath crates of bananas destined for export.

One of those arrested in connection to the drug discovery was a representative of the export company responsible for the shipment, whom prosecutors said had been present at the inspection and gave officials the names of the four other suspects.

They include the managers of the banana plantation where the cocaine is suspected to have been added to the fruit shipment, as well as the driver who took the container to the port.

Ecuador has become a major transit country for cocaine produced in neighbouring Peru and Colombia, with transnational criminal gangs using Ecuador’s ports to ship the drug to Europe and the US.

Last year, Ecuadorean security forces seized more than 200 tonnes of drugs, most of it cocaine. Only the US and Colombia seized more drugs in 2023.

Gangs have caused a wave of violent crime in Ecuador, leading President Daniel Noboa to declare a state of emergency and deploy tens of thousands of police officers and soldiers in an effort to combat them.

These security forces have stopped large amounts of cocaine from being shipped to Europe.

In January, officers found the largest stash ever to be seized in Ecuador – 22 tonnes of cocaine – buried in a pig farm.

However, extortion, kidnappings and murders remain high in the Andean country.

Reports /Trainviral/

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Thailand expands v-free entry to 93 countries

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Thailand has expanded its visa-free entry scheme to 93 countries and territories as it seeks to revitalize its tourism industry.

Visitors can stay in the South-East Asian nation for up to 60 days under the new scheme that took effect on Monday,

Previously, passport holders from 57 countries were allowed to enter without a visa.

Tourism is a key pillar of the Thai economy, but it has not fully recovered from the pandemic.

Thailand recorded 17.5 million foreign tourists arrivals in the first six months of 2024, up 35% from the same period last year, according to official data. However, the numbers pale in comparison to pre-pandemic levels.

Most of the visitors were from China, Malaysia and India.

Tourism revenue during the same period came in at 858 billion baht ($23.6bn; £18.3bn), less than a quarter of the government’s target.

Millions of tourists flock to Thailand every year for its golden temples, white sand beaches, picturesque mountains and vibrant night life.

The revised visa-free rules are part of a broader plan to boost tourism.

Also on Monday, Thailand introduced a new five-year visa for remote workers, that allows holders to stay for up to 180 days each year.

The country will also allow visiting students, who earn a bachelor’s degree or higher in Thailand, to stay for one year after graduation to find a job or travel.

In June, authorities announced an extension of a waiver on hoteliers’ operating fees for two more years. They also scrapped a proposed tourism fee for visitors flying into the country.

However some stakeholders are concerned that the country’s infrastructure may not be able to keep up with travellers’ demands.

“If more people are coming, it means the country as a whole… has to prepare our resources to welcome them,” said Kantapong Thananuangroj, president of the Thai Tourism Promotion Association.

“If not, [the tourists] may not be impressed with the experience they have in Thailand and we may not get a second chance,” he said.

Chamnan Srisawat, president of the Tourism Council of Thailand, said he foresees a “bottleneck in air traffic as the incoming flights may not increase in time to catch up with the demands of the travellers”.

Some people have also raised safety concerns after rumours that tourists have been kidnapped and sent across the border to work in scam centres in Myanmar or Cambodia.

fatal shooting in Bangkok’s most famous shopping mall last year has also caused concern among visitors.

Reports /Trainviral/

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Royal Mail will deliver letters forever

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The prospective new owner of Royal Mail has said he will not walk away from the requirement to deliver letters throughout the UK six days a week, as long as he is running the service.

“As long as I’m alive, I completely exclude this,” Czech billionaire Daniel Kretinsky told the BBC.

Mr Kretinsky has had a £3.6bn offer for Royal Mail accepted by its board.

Shareholders are expected to approve the deal in the coming months, but the government also has a say over whether it goes ahead.

Currently the Universal Service Obligation (USO) requires Royal Mail to deliver letters six days a week throughout the country for the same price. But questions have been raised over whether the service could be reduced in the future.

In an exclusive interview with the BBC, Mr Kretinsky also said he would be willing to share profits with employees, if given the go-ahead to buy the group.

However, he appeared to reject the idea of employees having a stake in Royal Mail, which unions have called for in exchange for their support.

The Royal Mail board agreed a £3.6bn takeover offer from Mr Kretinsky in May for the 500-year-old organisation, which employs more than 150,000 people. Including assumed debts, the offer is worth £5bn.

But because Royal Mail is a nationally important company, the government has the power to scrutinise and potentially block the deal.

As well as keeping the new government on side, Mr Kretinsky also faces the task of convincing postal unions that the proposed deal will benefit employees.

The USO is a potential sticking point for both the government and unions.

Royal Mail is required by law to deliver letters six days a week and parcels five days a week to every address in the UK for a fixed price.

How well this has actually been working in practice is a different matter. Ten years ago, 92% of first class post arrived on time. By the end of last year it was down to 74%, according to the regulator Ofcom.

Last year the regulator fined Royal Mail £5.6m for failing to meet its delivery targets.

Royal Mail has been pushing for this obligation to be watered down. It wants to cut second class letter deliveries to every other weekday, saying this will save £300m, and lead to “fewer than 1,000” voluntary redundancies.

‘Unconditional commitment’

Mr Kretinsky has committed in writing to honouring the USO, but only for five years.

And after that, in theory, the new owners could just walk away from it.

However, Mr Kretinsky told the BBC: “As long as I’m alive, I completely exclude this, and I’m sure that anybody that would be my successor would absolutely understand this.

“I say this as an absolutely clear, unconditional commitment: Royal Mail is going to be the provider of Universal Service Obligation in the UK, I would say forever, as long as the service is going to be needed, and as long as we are going to be around.”

Mr Kretinsky added that the written five-year commitment was “the longest commitment that has ever been offered in a situation like this”.

Woman's hand posting a letter into a red post box

Another potential stumbling block for the deal, however, is how the company will be structured.

Unions would like to see the company renationalised, but Dave Ward, general secretary of the Communication Workers Union (CWU), told the BBC that would be “difficult in the current political and economic environment”.

Instead, what the CWU is pushing for is “a different model of ownership” – that is, where the employees part-own the business.

To get its support for the takeover, the union wants employees to share ownership of the company, along with other concessions including board representation for workers.

It says profit sharing is “not going to be enough to deliver our support and the support of the workforce”.

If the union doesn’t get what it wants, it won’t rule out industrial action, Mr Ward said. Its members went on strike in 2022 and 2023.

Although Mr Kretinsky said he is “very open” to profit sharing, he is not in favour of shared ownership.

“I don’t think the ownership stake is the right model,” he said. “The logic is: share of profit, yes, [but an] ownership structure creates a lot of complexity.

“For instance, what happens if the employee leaves? He has shares, he is leaving, he is not working for the company, he [still] needs remunerating.”

Mr Kretinsky said he didn’t want to create “some anonymous structure” but instead “remunerate the people who are working for the company, and creating value for the company”.

The union is also concerned about job losses and changes to the terms and conditions of postal workers’ contracts.

Mr Kretinsky has guaranteed no compulsory redundancies or changes in terms and conditions but only until 2025.

“If we are more successful, and we have more parcels to be delivered, we need not less people, but we need more people,” he said. “So really, job cuts are not part of our plan at all.”

He said if the management, union and employees work together, “we will be successful”.

Another concern is the potential break-up of the business.

The profit for Royal Mail’s parent company last year was entirely generated by its German and Canadian logistics and parcels business, GLS. Royal Mail itself made a loss.

Mr Kretinsky has promised not to split off GLS or load the parent company with excessive debt, although borrowings will rise if the deal goes through.

But he has a way to go to convince the CWU.

“I can’t think of any other country in the world that would just just hand over its entire postal service to an overseas equity investor,” Mr Ward of the CWU said.

However, Mr Kretinsky said that the postal unions “do understand that we are on the same ship, and that we need this ship to be successful, and that if we are there, we don’t have any real problems to deal with, because the sky is blue, and it’s blue for everybody.”

The union cannot stop this deal but the government can block it under the National Security and Investment Act.

Business Secretary Jonathan Reynolds has said he will scrutinise the assurances and guarantees given and called on Mr Kretinsky to work constructively with the unions.

Mr Kretinsky may say that he and the unions are ultimately on the same ship but, as things stand, they are not on the same page.

Who is Daniel Kretinsky?

Daniel Kretinsky started his career as a lawyer in his hometown of Brno, before moving to Prague.

He then made serious money in Central and Eastern European energy interests.

This includes Eustream, which transports Russian gas via pipelines that run through Ukraine, the Czech Republic and Slovakia.

He then diversified into other investments, including an almost 10% stake in UK supermarket chain Sainsbury’s and a 27% share in Premier League club West Ham United.

The Czech businessman is worth about £6bn, according to reports.

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