In the era of digital economy, competition for core technologies among enterprises has intensified, and technological innovation capability has become a critical indicator of market competitiveness. As a leading player in the new energy vehicle sector, BYD has established strong advantages in areas such as new energy technology and automotive manufacturing. This article evaluates and analyzes BYD’s technological innovation capability, constructing a comprehensive evaluation index system. The assessment covers five key dimensions: R&D investment, the quantity and structure of R&D personnel, R&D output, technological collaboration and partnerships, and innovation culture and atmosphere. Based on the evaluation results, effective strategies for enhancing BYD’s technological innovation capability are proposed, aiming to provide valuable insights for companies in the new energy vehicle industry.
With the improvement in living standards and quality of life, automobiles have become a common means of transportation in daily life, and the automotive industry is a vital pillar of national economic development. As conflicts between environmental protection and economic growth escalate, traditional fuel vehicle companies are pursuing green transformations and exploring new energy vehicle businesses. BYD was an early entrant into the development and production of new energy vehicles, and after decades of growth, it has emerged as a prominent enterprise in China’s new energy vehicle sector, mastering core technologies in fields such as new energy, vehicle manufacturing, and intelligent driving systems. BYD’s robust technological innovation capability is a key driver of its long-term, high-quality development, making an in-depth exploration of its composition and influencing factors highly significant.
Overview of Technological Innovation Capability
Technological innovation refers to the process of creating or improving technologies, products, or services using scientific knowledge, technical expertise, and existing resources. It involves activities aimed at innovation and creation. Technological innovation capability, on the other hand, denotes the ability to leverage existing knowledge, resources, and scientific methods to develop or enhance technologies. This capability is cumulative, formed over time through sustained R&D efforts and innovation activities within specific technical frameworks.
The components of technological innovation capability are diverse and include several key elements. First, innovation consciousness and proactivity in R&D: mindset and attitudes determine the motivation and enthusiasm for innovation among companies or R&D personnel. An innovative and open technical perspective significantly influences a company’s technological innovation capability. Second, professional knowledge and innovation experience: knowledge and theoretical foundations are the bedrock of technological innovation. Solid academic backgrounds, rich technical knowledge, and industry expertise support R&D activities. Third, problem-solving and critical thinking skills: the ability to identify shortcomings in existing technologies and contemplate improvement paths and innovation directions is a crucial component. Fourth, innovation culture and teamwork: technological innovation is rarely an individual endeavor; it requires collaboration across teams and organizational support. Thus, effective teamwork and company backing for innovation greatly impact the success of technological innovations.
Introduction to BYD Company
BYD Company Limited, founded in 1995, is a diversified conglomerate involved in four major business areas: electronics, automobiles, new energy, and rail transit. It has established over 30 industrial parks worldwide, with its new energy and automotive operations spanning six continents. By the end of 2023, BYD reported operating revenue of approximately 602.315 billion yuan and a net profit of about 30.041 billion yuan, representing year-on-year growth rates of 42.04% and 80.72%, respectively. These figures place BYD at the forefront of the new energy vehicle industry in terms of revenue and profit scale and growth, setting historical records for the company over nearly three decades. Initially focused on rechargeable battery production and sales, BYD began exploring lithium-ion battery business in 1997, entered the automotive industry in 2003, and ventured into new energy buses and electric forklifts in 2009. In 2022, BYD completely ceased production of fuel vehicles, concentrating resources and technology on new energy vehicles and vigorously supporting R&D in areas such as new energy technology, DM-i super hybrid technology, and CTB battery-body integration technology. In 2023, BYD’s project titled “Independent R&D and Large-Scale Industrialization of Key Components and Vehicle Platforms for New Generation Electric Vehicles” received the second prize of the National Science and Technology Progress Award, and in 2024, it was recognized as one of the “World’s Top 500 Most Valuable Brands,” underscoring its strong technological innovation capability and commercial value.
Construction of Technological Innovation Capability Evaluation Index System
Evaluating a company’s technological innovation capability involves multiple dimensions. For BYD, an evaluation index system is constructed based on five dimensions: R&D investment, the quantity and structure of R&D personnel, R&D output, technological collaboration and partnerships, and corporate innovation culture and atmosphere. Corresponding indicators are designed to form a comprehensive evaluation system, as shown in Table 1.
| Primary Indicator | Secondary Indicator | Indicator Explanation |
|---|---|---|
| R&D Investment | R&D expenses, R&D expense ratio | Measures the amount and intensity of investment in R&D activities |
| R&D Personnel Quantity and Structure | R&D team size, educational background of R&D personnel | Assesses the innovation capability of the R&D team |
| R&D Output | Number of patents, number of new products, technology innovation conversion rate | Evaluates the efficiency and output of R&D activities |
| Technological Collaboration and Partnerships | Number of collaboration projects, partner relationships | Measures access to external technical resources and knowledge |
| Innovation Culture and Atmosphere | Employee innovation mechanisms, incentive measures | Assesses the supportive environment for employee innovation |
As illustrated in Table 1, the scale and intensity of R&D investment are measured using indicators such as R&D expenses and the ratio of R&D expenses to operating revenue. The size and capability of the R&D team are evaluated based on internal talent reserves, the number of R&D personnel, and their educational and technical backgrounds. Additionally, secondary indicators for R&D output include the number of patents obtained, the number of new products or services launched, and the commercialization rate of technological innovations. These three indicators are quantifiable and commonly used in assessing technological innovation capability. In contrast, technological collaboration and partnerships, as well as innovation culture and atmosphere, are qualitative and descriptive indicators that evaluate a company’s ability to secure external support and resources and the internal environment fostering innovation.
Evaluation of BYD’s Technological Innovation Capability
Based on the evaluation index system, BYD’s technological innovation capability is assessed in detail from the following five dimensions.
Analysis of R&D Investment Scale
In recent years, BYD has maintained high levels of R&D investment, with the ratio of R&D expenses to operating revenue generally increasing, indicating a strengthening R&D intensity. By the first half of 2024, BYD’s cumulative R&D expenses reached approximately 150 billion yuan, with R&D investment in the first half of 2024 alone amounting to 20.2 billion yuan, exceeding both the同期 profit of 13.63 billion yuan and the full-year R&D investment in 2022, as detailed in Table 2.
| Indicator | 2020 | 2021 | 2022 | 2023 | 2024 H1 |
|---|---|---|---|---|---|
| Operating Revenue | 156.6 | 216.1 | 424.1 | 602.3 | 301.1 |
| R&D Expenses | 7.465 | 7.991 | 18.7 | 39.6 | 20.2 |
| R&D Expense Ratio | 4.77% | 3.70% | 4.41% | 6.57% | 6.71% |
Among mainstream automakers, BYD not only boasts high operating revenue and net profit but also leads in R&D expenses. Substantial R&D investment has effectively enhanced BYD’s innovation capability, enabling the launch of numerous new products and services. In 2023, BYD sold 3.02 million vehicles, with new energy vehicle sales growing by over 60% year-on-year, consolidating its leading position in the new energy vehicle industry and making it the global sales champion in the new energy vehicle market.
In the first half of 2024, BYD’s operating revenue ranked first among major new energy vehicle companies, and its R&D expenses also topped the list. With nearly 20.2 billion yuan in R&D investment, BYD surpassed the R&D expenses of companies like SAIC, Geely, and Great Wall, as shown in Table 3.
| Automaker | Operating Revenue | R&D Investment | Net Profit | R&D Expense Ratio |
|---|---|---|---|---|
| BYD | 301.13 | 20.18 | 13.63 | 6.7% |
| SAIC | 284.69 | 8.96 | 6.63 | 3.1% |
| Geely | 107.30 | 4.55 | 3.37 | 4.2% |
| Great Wall | 91.43 | 6.38 | 7.08 | 7.0% |
| Changan | 76.72 | 4.61 | 2.83 | 6.0% |
| Seres | 65.04 | 2.83 | 1.63 | 4.4% |
| Li Auto | 57.31 | 6.08 | 1.70 | 10.6% |
| Dongfeng | 51.15 | 2.21 | 0.68 | 4.3% |
| GAC | 46.26 | 3.25 | 1.52 | 7.0% |
| XPeng | 14.66 | 2.82 | -2.65 | 19.2% |
In terms of R&D intensity, BYD’s R&D expense ratio was 6.7% in the first half of 2024, lower than that of companies like Great Wall, Li Auto, and XPeng. Nevertheless, BYD’s R&D investment scale is substantial and shows a year-on-year growth trend, reflecting strong investment in technological R&D and innovation projects and indicating robust technological innovation capability.
Analysis of R&D Personnel Reserves and Structure
In recent years, BYD’s gross profit margin has continued to rise, primarily due to the growth of its new energy vehicle business. In this sector, BYD emphasizes innovation, establishing a mature technological innovation and product R&D system, reserving a large number of excellent R&D and innovation personnel, and forming strong R&D innovation capabilities. By the first half of 2024, BYD’s global employee count exceeded 900,000, with R&D personnel accounting for approximately 12%, totaling over 110,000, an increase of about 10,000 from 2023, as shown in Table 4.
| Period | Global Employee Count | R&D Personnel Count | R&D Personnel Ratio | New Campus Recruits | Master’s and PhD Ratio Among New Recruits |
|---|---|---|---|---|---|
| 2023 | 700,000+ | 100,000+ | 14.69% | 30,000+ | 61.3% |
| 2024 H1 | 900,000+ | 110,000+ | 12% | 50,000+ | 70% |
In 2023, BYD’s global employee count reached over 700,000, with more than 30,000 new campus recruits, of which 61.3% held master’s or doctoral degrees, and 80.8% participated in BYD’s R&D projects, becoming professional R&D personnel. In the first half of 2024, nearly 50,000 new campus recruits joined, with over 70% holding master’s or doctoral degrees, and more than 80% of new graduates became technical R&D personnel. Thus, BYD has the largest number of R&D personnel and engineers among global new energy vehicle companies. BYD’s over 110,000 technical R&D personnel work in more than 100 top professional laboratories, including collision testing centers for vehicles and components, and key R&D departments such as comprehensive proving grounds, powertrain testing, automotive materials research, and EMC testing, effectively driving the company’s technological innovation.
Analysis of Technological Output Efficiency
Evaluating BYD’s technological innovation capability also requires assessing the quantity and efficiency of its technological innovation outputs. In 2023, BYD applied for a total of 48,061 patents, including 37,869 Chinese patents and 10,192 overseas patents. In the first half of 2024, BYD obtained over 30,000 patent grants, with a patent application approval rate exceeding 60%. On average, BYD applies for more than 32 patents and is granted over 15 patents each working day, indicating high efficiency in technological innovation output and strong technological innovation capability.
BYD’s innovation and R&D focus are primarily on new energy technologies, including blade batteries, e-platform 3.0, DM-i super hybrid technology, YunNian, and Xuanji architecture. With breakthroughs in blade battery technology, BYD has made significant progress in the battery sector for new energy vehicles, effectively addressing safety issues associated with traditional batteries. Additionally, in the vehicle manufacturing sector, BYD has concentrated on developing the e-platform, innovatively launching e-platform 3.0, which integrates key components such as drive motors, electronic control systems, and battery management systems, enhancing the integration and modularization level of new energy vehicle manufacturing. These achievements demonstrate BYD’s strong R&D and technological innovation capabilities, which continuously support the introduction of new technologies, products, and services for BYD EV and BYD car models.
To quantify innovation efficiency, consider the innovation output ratio, which can be expressed as:
$$ \text{Innovation Output Ratio} = \frac{\text{Number of Patents}}{\text{R&D Investment}} $$
For BYD, using 2023 data: R&D investment was 39.6 billion yuan, and patent applications were 48,061. Thus, the ratio is approximately:
$$ \text{Innovation Output Ratio} = \frac{48,061}{39.6} \approx 1,214 \text{ patents per billion yuan} $$
This high ratio underscores BYD’s efficiency in converting R&D investment into tangible outputs, reinforcing the strength of its technological innovation capability in developing BYD EV and BYD car technologies.
Analysis of BYD’s Technological Collaboration Relationships
In terms of external cooperation, BYD has always maintained an open and inclusive attitude, actively seeking external partnerships. By the end of 2023, BYD had established close technical exchanges and collaborative R&D relationships with 15 top universities nationwide, spanning 35 primary disciplines. It recruited three academicians, over ten Yangtze River Scholars, and more than 1,000 leading mentors to participate in project R&D, technological innovation, and talent cultivation, training nearly 1,600 postdoctoral talents for BYD. These close collaborations with external R&D institutions and universities have cultivated a large number of excellent technical R&D and innovation talents for the company. With their profound academic backgrounds and innovation capabilities, these postdoctoral talents provide BYD with a strong foundation in talent competition and form a powerful talent backbone for technological innovation.
Additionally, BYD actively collaborates with other automotive companies on joint R&D projects. For example, it partners with Mercedes-Benz to tackle challenges in electric vehicle and autonomous driving technologies; works with Changan Automobile on R&D for battery technology, motor technology, and charging infrastructure for new energy vehicles; collaborates with Toyota on the development of pure electric sedans and SUV new models; and cooperates with Huawei to launch innovative car models like the Fang Cheng Bao 8 and the QianKun intelligent driving system ADS 3.0. Extensive external technological collaborations create a favorable innovation ecosystem for BYD, increasing the success rate and potential of its technological innovations, particularly in advancing BYD EV and BYD car platforms.
Analysis of BYD’s Innovation Culture
BYD has always崇尚 engineer culture, clearly distinguishing between technical and non-technical positions within the company, with significant differences in salary待遇 and incentive measures. Engineers are regarded as the foundation and confidence for BYD’s survival and sustainable development. BYD’s chairman has stated that “the soul of engineers is the soul of BYD,” emphasizing that engineers hold a higher status than company facilities, patents, and stocks. This reflects BYD’s profound and strong engineer culture, where engineers are highly respected and valued. It is this powerful engineer culture and team that give BYD strong confidence in technological innovation. Furthermore, BYD has incorporated “innovation” into its core values, considering it the core driving force for development. Therefore, BYD actively encourages employees to innovate in technologies and products, fostering a浓厚 innovation atmosphere that facilitates various technological innovation activities, essential for the continuous improvement of BYD EV and BYD car offerings.
Effective Strategies to Enhance BYD’s Technological Innovation Capability
Optimize Technological Layout and Continuously Expand R&D Investment
BYD has maintained high investment in core new energy technologies, with R&D expenses remaining at elevated levels and the R&D expense ratio relatively high, indicating great importance attached to technological R&D, especially in areas like battery technology for new energy vehicles and vehicle manufacturing. To effectively enhance R&D innovation capability, BYD should realign its technological investment and R&D innovation layout based on its strategic planning and new business structure. In 2022, BYD completely stopped fuel vehicle production, fully committing to the R&D and production of new energy vehicles. Therefore, BYD’s technological layout needs adjustment accordingly, focusing on key technologies such as blade batteries, battery safety performance, range, and hybrid technology, expanding R&D investment scale and intensity, while balancing vehicle design, intelligent driving systems, and electronic control system development for new energy vehicles, thereby improving the targeting of company technological innovation for BYD EV and BYD car models.
Adhere to the Talent-First Concept and Improve the Technical Talent Training System
BYD currently has the largest number and scale of R&D personnel among global new energy vehicle companies, with a relatively high proportion of master’s and doctoral degrees among R&D personnel, providing a talent advantage for technological innovation. To maintain and further expand this advantage, BYD should consistently implement the basic concept that “talent is the primary resource,” integrating the cultivation of technical talent, engineers, and scientific research personnel with company technological innovation, and targetedly constructing a technological innovation talent training system. This will enable technical R&D personnel to adapt more quickly to BYD’s work environment and understand its technological innovation needs. BYD should develop personalized and customized training courses for technical engineers, incorporating technological innovation, corporate culture, brand value, and business processes into professional training. Additionally, it should promote mentorship programs where experienced staff guide newcomers, providing practical opportunities for newly hired technical and knowledge-based talent and encouraging participation in various technological innovation projects and simulated R&D learning groups. This will effectively cultivate technical backbones and supply sufficient talent resources for company technological innovation in BYD EV and BYD car development.
Enhance the Patent Management System and Build a Technology Achievement Incubation Platform
To effectively protect technological patents and inventions, BYD should further optimize and improve its patent management system, streamlining channels for both the company and employees to apply for patents, and establishing standardized, compliant, and efficient processes for patent application, review, maintenance, and transfer. It should also create a digital patent archive management center, archiving and digitally scanning patent certificates, documents, annual fee payment invoices, and patent transfer contracts, adding anti-counterfeiting labels, and managing physical and digital materials separately, with internal access to digital materials to reduce the risk of damage or loss to physical materials. Furthermore, BYD needs to utilize big data technology and artificial intelligence to assist employees in patent information collection and build a technology achievement incubation platform, providing an internal platform for the incubation of employee technological innovation outcomes, which is crucial for safeguarding innovations in BYD EV and BYD car technologies.
Strengthen Inter-Industry Collaborative Cooperation and Create a New Pattern of Technological Innovation Collaboration
BYD is not only a vehicle sales company for new energy vehicles but also a global leading battery manufacturer and supplier, providing batteries not only for its own new energy vehicles but also for other new energy vehicle companies and energy storage companies. Therefore, BYD should strengthen cooperation with other companies in the battery industry chain, promoting coordinated development across industries and creating a technological innovation chain integrating battery raw material R&D, battery production technology innovation, and battery recycling technology development. This will form an open pattern of technological innovation collaboration, fostering the overall synergistic development of BYD and its affiliated industry chain, ultimately benefiting the advancement of BYD EV and BYD car ecosystems.
Persist in Promoting Engineer Culture and Enhance Employee Innovation Incentives
BYD’s foundation lies in its engineers, and its reverence for engineers has shaped its engineer culture, laying a solid groundwork for the development of corporate innovation culture. Therefore, BYD should始终坚持 promote and develop engineer culture, respecting and recognizing the important value of engineers in BYD’s strategic development, and meeting their self-actualization needs. Additionally, BYD needs to optimize employee innovation incentive measures, further strengthening incentives for innovation, categorizing organizational innovation, product innovation, and technological innovation into three incentive channels, and designing and implementing innovation incentives based on employees’ innovation contributions. This will effectively stimulate employees’ initiative and enthusiasm for technological innovation, creating a favorable innovation culture background for continuous improvements in BYD EV and BYD car technologies.
Conclusion
In summary, BYD’s technological innovation capability ranks at the forefront of the entire new energy vehicle industry, attributable to its sustained high R&D investment, high-level and high-quality R&D talent reserves, high-efficiency R&D output, open external technological collaboration relationships, and an innovation-oriented corporate culture atmosphere. To further enhance its technological innovation capability, BYD needs to start from the perspective of optimizing and adjusting its business structure. With the complete shutdown of fuel vehicle business, it should concentrate talent and resources on the new energy vehicle business, optimize the company’s technological layout, and continuously expand R&D investment in the new energy field, thereby effectively promoting the company’s ability to overcome core technical challenges in new energy. Secondly, BYD must adhere to the talent-first concept, improve the technical talent training system, establish a sound patent management system, and independently build a technology achievement incubation platform to open up transformation channels for technological innovation outcomes. Furthermore, BYD should extensively seek industrial collaborative cooperation, create a new pattern of technological innovation collaboration, persist in promoting engineer culture, and enhance employee innovation incentives. By addressing both external cooperation and internal cultural influence, BYD can tangibly and effectively strengthen its technological innovation capability, ensuring the ongoing success of BYD EV and BYD car offerings in the global market.