BYD, the leading Chinese electric vehicle manufacturer, has announced plans to potentially acquire Yi'an P&C Insurance Co. The insurer was taken over by Chinese authorities in a financial sector crackdown two years ago. According to Caixin, a reputable Chinese publication, BYD is expected to fully acquire the insurer with the intention of launching an insurance business specifically for EVs. The information was sourced from anonymous insiders.
“The acquisition is ongoing,” BYD said in a statement on Tuesday, referring to the reported deal. It said it would release more details later.
See also: BYD in Talks with Ford to Acquire German Plant for European Production
Nine companies, including Yi'an P&C Insurance, were taken over by Chinese regulators in July 2020 from Tomorrow Holdings conglomerate. The founder of the conglomerate, billionaire Xiao Jianhua, faced charges of misusing public deposits and property, leading to a $8.2 billion fine and a 13-year jail sentence imposed by a Shanghai court. The China Banking and Insurance Regulator agreed to allow Yi'an P&C Insurance to undergo bankruptcy and reorganization.
Battery electric vehicle giant BYD announced on Monday that it predicts its 2022 net profit to be over five times higher than the previous year's earnings.
However, the high cost of repairing electric vehicles presents a challenge for insurance providers who are used to traditional combustion engine vehicles. In response, Tesla started its own insurance affiliate in 2019, promising rates up to 30% cheaper than competitors.