BYD, the rising Chinese EV sensation has struck Tesla second time on the trot for being the most successful EV brand in the world. Despite delivering 484,507 vehicles in the last quarter of 2023 which was an increase of 11% compared to the previous quarter, Tesla saw itself dethroned from the top spot.
BYD changed the EV vehicle landscape by delivering more than 500,000 cars in the last quarter. This highlighted the potential challenges Elon Musk’s Tesla might have to face against BYD. The American car brand’s stock marginally dipped before rebounding.
It was not only the pure-EV cars that saw BYD surge ahead of Tesla but the Chinese brand also gave a befitting defeat in the hybrid plug-in cars. BYD managed to produce more than 400,000 hybrid cars in the last quarter. The hybrid cars played a vital role in the 3 million cars produced.
While BYD won the fierce contest of the last quarter, it was Tesla who won the annual contest by producing more than 1.8 Million cars. However, BYD just fell short as their yearly numbers stopped just below 1.7 Million. Despite a strong position in its home market of China, BYD doesn’t sell in the US, where its vehicles would face a 27.5% import tariff and other hurdles.
“In the US, Tesla is still the dominant EV name,” Dan Levy, an analyst at Barclays, said in a Bloomberg TV interview.
The Austin-based carmaker is likely to deliver upwards of 2.1 million vehicles in 2024, despite a cloudy outlook for overall EV demand, Ben Kallo, an analyst at Baird, estimated in a research note.
The change in EV sales rankings reflects China’s growing clout in the global automotive industry. After surpassing the US, South Korea and Germany the last few years, China may have overtaken Japan as the world’s largest passenger-car exporter in 2023.
Chinese electric carmakers such as BYD and Nio have set their sights on becoming major players in international markets, with a particular focus on Europe. In December, BYD, which sells five models in Europe and has plans to launch three more this year, announced plans to build a new factory in Hungary.
Last year, the company said it did not consider building its first European factory in the UK because of Brexit’s impact. BYD said the UK had not even made a top 10 list to build its first European car plant.
BYD vs Tesla is synonymous with China vs USA
“BYD is already making moves to secure the precious metal by buying a stake in a Chinese lithium producer. It’s had its eye on purchasing mines in Africa and is scouting assets in South America, where the metal is mined.” A top source revealed to the Wall Street Journal.
The emergence of China as the top-selling electric vehicle producer comes at a significant time: the start of a presidential election year in the US. China-US relations, particularly around trade, are likely to be a key part of the campaign for the presidency, which looks likely to be fought between Joe Biden and Donald Trump.
Last month, the Biden administration brought in new protectionist measures for its EV market by blocking full subsidies through his Inflation Reduction Act to EV companies with significant Chinese links. US-manufactured electric vehicles that include Chinese-made battery components would also be blocked from accessing full subsidies.
The Wall Street Journal also reported just before Christmas that the US government was looking at raising tariffs on some Chinese goods, including electric vehicles, to bolster the US clean energy sector. This would be on top of the 25% tariffs on vehicles imported from China, which were brought in under Trump’s presidency, and extended under the Biden administration.
The US is looking to take action in other areas where it has security concerns about China’s manufacturing capabilities. On Monday it was reported that the Biden administration had put pressure on the Dutch government to block the shipments of hi-tech chip-making machinery to China by one of its key technology companies.
ASML, a leading supplier to the semiconductor industry, confirmed that the government had partially revoked its licence to export three chip-making lithography machines to China. Bloomberg reported that the decision came after US officials had requested the move in an attempt to restrict the growth in China’s semiconductor manufacturing capabilities.
Way forward for the EV car industry
The EV industry could change forever with the number of brands and cars breaking through. Tesla was the probably the most prominent name and BYD alongside other Chinese brands are on the brink of making to the top spot. Nio the other upcoming EV brand has futuristic designs and affordable rates which could disrupt the market for Tesla.
The Chinese brands are selling their cars for a much cheaper rate compared to Tesla which has become their unique selling proposition. However, 2023 saw Tesla sell its cars 10-12% cheaper than 2022.