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Chinese automaker expands its electric-vehicle lineup to more than 20 models in its push overseas and into higher price brackets

HONG KONG—BYD 1211 -2.40%decrease; red down pointing triangle overtook Tesla TSLA 0.15%increase; green up pointing triangle as the world’s top electric-vehicle seller by pumping out a range of affordable cars that gave Chinese drivers what they wanted: choice.

Now it is moving into the luxury market as it prepares to take on the world.

BYD is releasing the cars under a different brand, Yangwang, marking a strategy shift from relying on lower-priced runarounds to producing less conventional vehicles that come with a hefty price tag. They include a $150,000 supercar that resembles a Lamborghini and an SUV that it says can rotate 360 degrees on the spot and float in water—features that turn heads in China’s cutthroat car market where buyers chase the latest smart technology.

Tesla, meanwhile, banks on continuing strong global demand mostly for its Model 3 and Model Y cars, which it refreshed last year. Tesla’s Cybertruck, its first release in years, isn’t available in China, though the automaker is planning to take the vehicle on a roadshow in the country.

In China, the world’s biggest EV market, Tesla’s market share has been shrinking: BYD now sells five cars to every one that the U.S. automaker does. BYD’s popularity has surged as it cranks out new and varied models at a rapid pace, growing its portfolio of electric vehicles to more than two dozen models, catering to almost every taste and budget.

Backed by Warren Buffett, BYD has become so dominant in its home market that sales in the country enabled it to dethrone Elon Musk’s automaker as the bestselling global EV brand last quarter.

BYD also has ambitious export and expansion plans. BYD has topped EV sales charts in Thailand and is quickly rising in markets including Australia and Israel. It is building factories in Brazil, Hungary and Thailand. Its first chartered cargo ship with a capacity for 7,000 vehicles set sail for Europe this month.

Whether BYD can repeat its home success on the global stage depends on whether it can translate the formula winning over Chinese buyers to international consumers. In the U.S., South Korean carmakers Hyundai Motor and Kia are emerging as Tesla’s biggest competition by offering a broader range of vehicles.

Challenges loom large for BYD as Chinese carmakers face pressure on profit margins at home, deal with a subsidy probe in Europe, and remain largely shut out from the U.S., where BYD has long had ambitions to sell passenger EVs.

Beyond existing U.S. tariffs on Chinese cars, the Inflation Reduction Act will exclude cars made with Chinese components from EV tax credits. For now, the company has been manufacturing and selling buses and trucks in the U.S. Its current strategy is to focus on commercial vehicles in the U.S., a company spokeswoman said.

Export ambition

BYD expects to export 400,000 cars abroad this year, a goal that is achievable, said CMB International analyst Ji Shi. Exports offering higher profit margins are likely to become the next engine of growth for BYD, HSBC analysts wrote in a note earlier this month.

BYD has yet to make much progress toward its main prize: Europe. BYD is estimated to have sold around 13,000 cars in the European Union last year, far from Tesla’s 270,000, according to figures compiled by data firm GlobalData.

In China, BYD held almost 12% of the passenger-car market and Tesla under 3% for the first 11 months of last year, according to figures compiled by GlobalData. Tesla was the market leader in electric vehicles four years ago. While Tesla’s Model Y remained the most popular electric car in China last year, BYD claimed half of the nation’s 20 bestselling electric models as it churned out new minivans and sedans.

BYD “has the China market completely covered for the most part,” said Tu Le, consultant at Sino Auto Insights.

This month, Tesla cut prices in China for some versions of the Model 3 and Model Y, the latest fluctuation over the past year as carmakers engage in a price war in China. Tesla’s refresh of its Models 3 and Y last year added new features such as ambient interior lighting and a smaller rear screen, features that analysts said were already common among Chinese EVs and might not move the needle for Tesla.

Tesla didn’t respond to requests for comment.

While Tesla has fended off past challenges from a range of Chinese automakers, BYD’s move upmarket presents drivers with more prestigious homegrown choices over foreign rivals.

A price tag of 150,000 yuan, equivalent to around $21,000, used to be the ceiling customers were thought to be prepared to pay for Chinese-branded vehicles, a BYD executive said. Customers flaunted their status with an imported Western vehicle as there were no Chinese-designed cars priced above a million yuan, BYD sales representatives said.

Delivery ceremonies

Yangwang luxury vehicles are sold through direct-sales showrooms separate to BYD. Customers picking up their vehicles are offered a delivery ceremony, complete with balloons and floral decorations for special occasions such as a birthday, marriage proposals or anniversaries.

Buyers of its hybrid U8 SUV have the car key delivered in a gift box, nested with a miniature of the vehicle. BYD videos show the U8 doing a full 360-degree “tank turn” on the spot, which has garnered a lot of attention on Chinese social media.

Jin Songchang, a Chinese businessman, was shopping for an off-road SUV to drive across China’s vast provinces once he retires. After months of test driving luxury foreign cars, he finally whipped out a deposit for BYD’s U8, which costs just over $150,000.

Jin said he was swayed to BYD after company founder Wang Chuanfu said at its launch event that the U8 can run steadily on just three wheels if a tire bursts, thanks to its four powerful in-wheel motors. Jin placed a deposit the next day.

“I’ve always appreciated foreign brands more. BYD is the first one I decided to buy on the spot,” added Jin, who said he owns many cars.

Together with its other two high-end car brands, BYD counted more than 135,500 orders of premium and luxury cars in 2023, according to company data. The U8 SUV will be available in Brazil, the company said last year.

BYD has yet to open up sales for its supercar, the U9, after it was revealed at the Shanghai Auto Show in April. The sports car can accelerate from 0 to 62 miles in two seconds. This month, Yangwang teased its coming luxury sedan.

BYD is following the footsteps of companies such as General Motors, Ford and Volkswagen with its family of different car brands, analysts say.

“There’s no global automaker that just sells one brand, outside of Tesla,” said Le, the consultant.

VistaJet’s big pandemic expansion now looks overstretched, posing a risk for Canadian plane maker Bombardier

Private jets were a rare pandemic winner in the otherwise decimated travel business. Now that they are coming back down to earth, one heavily indebted operator could give the industry a hard landing.

Based in Malta, privately owned VistaJet grew at breakneck speed after 2019 to become the world’s second-largest flier of private jets. But, through complex financial engineering involving its founder and owner, Swiss entrepreneur Thomas Flohr—who briefly showed up in the Forbes billionaires list in 2018—it also accumulated big debts that could prove unsustainable. The company offers a kind of private-jet taxi service.

Globally, private-aviation flights are still above pre-Covid levels, but they are steadily coming down from their 2022 peak, data by lessor Global Jet Capital shows.

Investors are getting increasingly worried: A VistaJet bond issued last May, which was very oversubscribed, is now selling off. On Friday, its yield closed at 17.23%, the highest on record. This means a price of 77 cents on the dollar and a spread over Treasury yields of 13.18 percentage points. Ratings companies haven’t downgraded the bonds, which have a B-minus sub-investment grade. But only 9% of securities in that category trade at spreads above 10 percentage points, the typical threshold for distress, S&P Global Market Intelligence data shows.

Disclosures related to VistaJet’s bond showed the company’s net loss rising to $139.5 million in 2022, compared with $50.5 million in 2021. Its net debt increased to an eye-watering 23.5 times equity, up from 7.8 times a year earlier. Auditor EY warned in April that “a material uncertainty exists that may cast significant doubt on the Group’s ability to continue as a going concern,” the Financial Times reported in May.

VistaJet’s debt load is also an underappreciated risk for Canada’s publicly-listed Bombardier, its key plane supplier, and the whole market for secondhand private jets.

Last year, Delta Air Lines rescued one of VistaJet’s peers, U.S.-based Wheels Up, from a bankruptcy that would have brought 180 planes to the market. VistaJet is bigger. During the pandemic, it acquired rivals such as Air Hamburg and Jet Edge and tripled its owned fleet to 270 jets, including many top-of-the-line Bombardier Globals with a range of 6,000 miles or more.

For now, secondhand jet prices remain sky-high, but some aircraft brokers fear that could soon change. Data from JETNET shows that the number of private aircraft for sale rose to around 1,700 in December, from a low of about 700 in early 2022.

Many of VistaJet’s aircraft deliveries from Bombardier have come via orders made between 2012 and 2015 by Flohr himself through other companies he owns, bond documents show. Export Development Canada, a public export credit agency, financed many of them, though VistaJet was on the hook for the money. Flohr then sold options to buy these planes to a firm now owned by VistaJet. Some were canceled.

How much Flohr profited from dealing in aircraft—that is, from differences in the price paid to Bombardier and what VistaJet paid him—is hard to pinpoint, because there has been a constant crisscross of payments between the firms.

The risks he took in performing the trades may have benefited the plane operator. In its bond prospectus, though, VistaJet was unable to assure investors that it “couldn’t obtain more beneficial terms by transacting with unrelated parties.”

VistaJet’s rapid growth was facilitated by state-backed guarantees. EDC’s transactions with VistaJet amounted to at least 1.7 billion Canadian dollars, equivalent to around $1.3 billion, between 2020 and 2022 alone, official data shows.

Wheels Up and VistaJet share similarities. They made a splash because, unlike Warren Buffett’s NetJets, they don’t require customers to commit a large sum upfront to own a fraction of an aircraft. Instead, the operators own planes and charge members for trips and prepaid hours. VistaJet also argues that a dense network of long-range aircraft can be used intensively across the globe.

Perhaps the strategy could be made to work, but the firm’s deep financial losses suggest that it spent too much on big aircraft. Flohr has said he is focused on improving earnings before interest, taxes, depreciation and amortization, but this isn’t the most important metric for a capital-intensive business that must pay back hefty investments.

VistaJet left its high-growth phase behind in 2023, which will have improved its finances and freed up more cash to pay lenders. But there is only so much to go around: Operating cash flow in 2022 amounted to just 16% of the company’s debts at the end of that year. Meanwhile, soaring bond yields will likely push up the cost of refinancing. A $150 million bond matures this June.

Were VistaJet to sell some of its Bombardier jets to reduce debt, it would put pressure on used prices. If, in the worst case, the company suddenly collapsed, the impact on the market could be nearly unprecedented. The operator has 94 Challengers—almost as many as the 109 for sale in the entire secondhand market, data by broker Guardian Jet shows. Its 18 Global 7500s, hard-to-move aircraft with a price tag of $60 million each, would overwhelm the eight currently available. Adding to high-end supply, the G700 made by General Dynamics-owned Gulfstream could enter the market later this year.

Bombardier makes high margins on these premium planes and could struggle to sell new ones if used prices tumble. Unlike its rivals General Dynamics and Textron, it doesn’t have other businesses to fall back on when the cyclical private-jet market turns down, having sold its regional and commercial plane lines, as well as its train business in 2021.

To be sure, the company’s long order books provide protection. And if the global economy keeps booming in 2024, private-jet values may prove resilient. For now, planes still sell quickly, JETNET data shows.

Bombardier’s stock has gained 241% since it slimmed down. But investors might yet regret that all their eggs are in such a small basket.

Following its London opening, the brand is looking to open another store in Malaysia.

LONDON — Mouawad, the century-old, family-owned jeweler hailing from Lebanon, has big ambitions for the Asian market following the opening of its first European flagship at the Peninsula London.

Taking over a street-facing prime spot at the hotel overlooking the Wellington Arch and the garden of Buckingham Palace, the jeweler’s boutique debuted an upbeat and contemporary design in the hues of brass gold, olive green and warm ochre with Levantine-inspired columns dividing the spaces and reflecting its Mediterranean roots.

The London store carries a full range of products, from more affordable bridal and fine jewelry collections to high jewelry priced up to $1 million, as well as one-off masterpieces and timepieces, targeting the affluent local clientele and wealthy travelers from Asia, the Gulf region and the U.S.

Mouawad said while the brand is known for crafting big, fancy sets for royal households in Saudi Arabia and Brunei and sponsoring landmark pop culture events like the fantasy bras for Victoria’s Secret shows and bespoke crowns for Miss Universe with stones sourced and polished in South Africa, its more affordable collections targeting a youthful audience have been gaining ground.

“The market has shifted. There’s more pressure on lower prices, so we now have ranges like the Flower of Eternity. It’s a collection we’ve had for about 10 years. Three hearts are connected with a center stone representing the past, present and future,” he said.

He added that a new collection, inspired by the brand’s L’Incomparable necklace would do well with the brand’s followers on social media, and incentivize them to come to the store to explore the Mouawad universe. The original design, featuring a 407.48-carat yellow diamond, holds the Guinness World Record for the most valuable necklace in the world. It sold for $55 million in 2013, reportedly to Nita Ambani, the wife of billionaire businessman Mukesh Ambani of the Reliance Group conglomerate.

To raise awareness in Asia, the brand last year also launched the Venus Collection with Beatrice Ho, granddaughter of the late Macau gambling tycoon Stanley Ho, in Hong Kong. For 2024, Mouawad said he is also looking to collaborate with an emerging U.K.-based jewelry designer.

“We are transforming the brand into what is today in terms of the new look and feel. We are known for the very high-end, which we continue to want to be known for. But at the same time, we’re introducing lower price points pieces that can be sold to a younger and wider audience worldwide, both online and offline,” said Mouawad, adding that fifth-generation members are very involved in helping design and market these new launches.

Mouawad

ELLIE PINNEY

There is no shortage of legendary jewelers in London, be it local suppliers to the British royal family like Garrard & Co., Asprey and Bentley & Skinner, or global players with deep roots in the city such as Cartier, Boucheron and Chaumet.

Mouawad said the brand is not in a rush to dress its neighbors living inside Buckingham Palace, even though members of the British royal family have owned pieces crafted by Mouawad.

For now, the focus is to build relationships with the hotel’s clientele from around the world and tap into certain circles in London via key gatekeepers like Richard Caring, owner of Annabel’s, Harry’s Bar and Mark’s Club.

“We are letting our customers know that we now have a location in London, which is great because many of our loyal customers in the Middle East and Asia have homes here. So they are very excited,” he added.

Mouawad counts the Middle East as its biggest market, with stores in Dubai, Jeddah, Riyadh, Manama and Doha. The brand also has offices in Los Angeles, Geneva and Beirut, with its head office in Dubai. Asia and Europe are important markets as well.

“We potentially may open in more locations. At the moment, we have these two stores [outside of the Middle East] because London and Hong Kong are very strong bases for The Peninsula.

“Our immediate expansion plans are into the Asia markets after this boutique. We are looking to open another store in Malaysia,” said Mouawad, adding that potential locations in mainland China, Singapore and Indonesia are on the horizon as well.

“We do quite a bit of sales in Thailand as well. My brother Fred is based there. So he is helping to expand in the Asian market with trunk shows,” he added.

The next phase following Asia would be the U.S. market.

“I’m currently based in Los Angeles myself, so we do some private events. It’s not a big focus of ours yet. The U.S. is its own little continent. Having a presence there means it’s a strategy, that you don’t only open in New York, you need to have full presence in Los Angeles, Las Vegas, Chicago and Florida as well,” he said.

Founded in 1890 by David Mouawad, who embarked on a journey to the U.S. and Mexico to learn the craftsmanship of watchmaking, the brand began as a small watch workshop in Lebanon.

His son Fayez Mouawad decided about 65 years ago to make his way to Saudi Arabia, where at the time the country was booming. He quickly became the jeweler to the king and the queen and was the only foreign jeweler allowed to operate in the country at the time.

Third-generation leader Robert Mouawad took the business global in the ’70s by setting up offices in Geneva and New York and launching multibrand retail operations in the Philippines, Thailand and Japan, representing brands like Chopard, Piaget and Cartier.

When the business was passed down to the three brothers in 2010, they decided to move away from the multibrand business and focus on creating a new identity for Mouawad.

“We’re fully vertically integrated. So some retailers have no choice but to represent brands, but our expertise is manufacturing, designing, and creating. So we said ‘Why are we putting our money building other brands when in fact we are a brand ourselves?’ We can even make our watches in Switzerland,” Mouawad said.

With strong in-house capability, bespoke service continues to be a key pillar of Mouawad’s offering, on top of the brand’s effort to sell to the masses. Mouawad said the brand not only can build a bespoke engagement ring within two weeks, but it is also able to deliver extravagant items like a baby carriage crusted in gold and precious stones, which was commissioned by a royal household.

Alternative for Germany chief Alice Weidel says she will hold a referendum on EU membership if elected

The far-right Alternative for Germany will push for a Brexit-style referendum on membership of the EU if it comes to power, its leader Alice Weidel said, hailing the UK’s exit from the bloc as “dead right”.

“It’s a model for Germany, that one can make a sovereign decision like that,” she said in an interview with the Financial Times.

Weidel, party leader since 2022, said an AfD government would seek to reform the EU and remove its “democratic deficit”, including by curbing the powers of the European Commission, an “unelected executive”.

“But if a reform isn’t possible, if we fail to rebuild the sovereignty of the EU member states, we should let the people decide, just as Britain did,” she said. “And we could have a referendum on ‘Dexit’ — a German exit from the EU.”

The idea breaks a big taboo in Germany, where mainstream parties are devoutly pro-European. Also, the German constitution places tight restrictions on national plebiscites, and even if one were to be held, polls suggest a large majority of Germans would vote to remain in the EU. However, among AfD voters support for the EU is weakest.

Weidel was speaking against the backdrop of a big surge in support for the AfD, which is at 22 per cent in the polls — ahead of all three of the parties in Chancellor Olaf Scholz’s shaky coalition, the Social Democrats, Greens and liberals.

It is expected to win crucial elections in September in the eastern states of Saxony, Brandenburg and Thuringia — though with all the other main parties refusing to strike coalition deals with the AfD, its path to power is unclear.

Germany’s domestic intelligence agency has designated large sections of the AfD extremist and put several of its officials under surveillance. Still, the party has benefited from public anger with Scholz and his management of a worsening economy.

But in recent days it has found itself at the eye of a storm over reports of a controversial meeting last November between AfD lawmakers and the Austrian far-right radical Martin Sellner that discussed a “remigration” plan to forcibly remove millions of people with an immigrant background from Germany — including citizens holding German passports.

Anti-AfD demonstrations have been held in a number of German cities, with politicians sounding the alarm of the danger the party poses to the country’s democratic institutions. 

Weidel did not participate in the meeting and quickly fired a close aide who had been in attendance. Still, she has struggled to contain the backlash. Lars Klingbeil, leader of the Social Democrats, accused her of playing down the deportation plan and instead lashing out at a “media smear campaign” against the AfD.

“You are a wolf in sheep’s clothing,” he told her during a Bundestag debate last week. “But I’m telling you: your facade is beginning to crumble. People are finally getting to see the real face of the AfD.”

In her interview, Weidel blamed Correctiv, the investigative outlet that first reported the meeting, condemning the organisation’s methods as “scandalous”. 

“It was just an attempt to criminalise the very idea of repatriating people lawfully who don’t have leave to remain here, or are subject to a deportation order,” she said. “The AfD is the party that stands for enforcing this country’s laws.”

She said that, for her, the concept of “remigration” meant expelling people who had “illegally acquired citizenship under false pretences”, or individuals “with dual nationality who are suspected of terrorism, or are convicted criminals”. She ruled out mass expulsions. “You can’t generalise here.”

But she also said that the 1.1mn Ukrainian refugees currently in Germany had no long-term future in the country, adding it had been a mistake to let them draw welfare payments. “It’s clear that when the war ends, all Ukrainians will have to go home. They will be needed anyway to help rebuild their country.”

The AfD was set up in 2013 by conservative economists angered by the eurozone bailouts during the sovereign debt crisis. But it gradually shifted rightward, riding a wave of anger at former chancellor Angela Merkel’s open-door refugee policy to forge a fiercely anti-immigration, anti-establishment platform.

Weidel, who has a PhD in economics and worked for Goldman Sachs and Allianz Global Investors before entering politics, has led the AfD’s parliamentary group since 2017. In a civil partnership with a woman from Sri Lanka, she stands out in a male-dominated party with traditional family views.

With her trademark white blouse and pearls, well-to-do background and career in finance, she lends the AfD “an aura of bourgeois respectability that has strong appeal for middle-class voters beyond its traditional hard-right base”, said Hans Vorländer, a political scientist at Dresden Technical University.

Yet security officials warn that behind that image lies a party that has been heavily infiltrated by right-wing extremists and is becoming increasingly radicalised. A German court ruled in 2019 that one of its most senior politicians, Björn Höcke, could be described as a fascist, citing “verifiable facts”.

Other parties have responded to the AfD threat by constructing a “firewall” that precludes any form of coalition or co-operation with the party. As a result, despite its strength in the polls, the AfD does not rule in any of Germany’s 16 state governments.

Speaking from her office overlooking the Reichstag, with the noise of anti-government protests audible in the distance, Weidel herself acknowledged that the AfD would not come to power in Berlin “before 2029”.

But she insisted a future role for the AfD in government was “inevitable”, predicting that the centre-right Christian Democrats (CDU) would be the first to abandon their boycott.

“The CDU won’t be able to maintain its firewall in the long term,” she said of the party once led by Merkel. Elections in the central German state of Hesse last year had shown “that we can form a clear right-wing majority. And the CDU can’t refuse to accept that in the long term, especially in the eastern states.”

Asked what the AfD’s top priorities would be in government, Weidel said it would “introduce effective border controls . . . and immediately deport foreign criminals”.

It would reform the tax system, slim down the state and end Germany’s shift away from fossil fuels to renewable power. “France is planning 15 new nuclear power stations and we’re betting on wind turbines and solar panels that we can’t even make ourselves.” 

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