BYD (Build Your Dream), the Chinese electric carmaker backed by Warren Buffett, has surpassed Tesla as the world’s top-selling electric carmaker for the second year in a row. In 2023, BYD produced 3.02 million new energy vehicles, while Tesla produced 1.84 million cars. However, it’s important to note that BYD’s sales figures include battery-only vehicles and hybrids, whereas Tesla focuses solely on electric battery-only cars.
The Chinese automaker’s victory over Tesla was evident in the final quarter of last year when BYD outsold Tesla in battery-only cars for the first time, selling 526,000 units compared to Tesla’s 484,000. One of the factors contributing to BYD’s success is its ability to offer vehicles at a lower price point than Tesla.
Additionally, BYD has been actively expanding its presence in international markets, particularly in Europe. The company sells five European models and plans to launch three more this year. In December, BYD announced plans to build a new factory in Hungary, further solidifying its commitment to the European market.
While BYD aims to become a significant player in the electric vehicle market, it may face challenges due to an ongoing anti-subsidy investigation initiated by the European Commission. The investigation, which could result in punitive tariffs on Chinese electric vehicle imports, threatens BYD’s sales targets of approximately 800,000 cars annually in Europe by 2030.
BYD’s advantage over its US and European counterparts lies in its in-house ability to manufacture electric vehicle batteries. Unlike Tesla’s dependence on multiple suppliers, these batteries give the company greater control over its supply chain. Tesla has already highlighted potential future challenges related to lithium shortages, which could impact its battery production.
To secure a steady lithium supply, BYD has taken steps such as buying a stake in a Chinese lithium producer and exploring opportunities to acquire mines in Africa and South America.
The emergence of China as the leading electric vehicle producer comes at a crucial time as the US enters a presidential election year. China-US relations, particularly in trade, are expected to be a focal point of the election campaign between Joe Biden and Donald Trump.
The Biden administration has already introduced protectionist measures for the US EV market, blocking subsidies to EV companies with significant Chinese links and imposing tariffs on Chinese goods, including electric vehicles.
Overall, BYD’s rise to become the world’s top-selling electric carmaker reflects China’s growing dominance in the electric vehicle market. With its focus on expanding into international markets and securing vital resources, BYD is poised to continue its success in the years to come.