How did BYD overtake Tesla

Did BYD Overtake Tesla as World's Biggest EV Seller? That Depends on How You Count

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Photo: Tesla/BYD/edited by autoevolution

BYD celebrated selling 134,036 new energy vehicles (NEVs) in June. For the Financial Times and Nikkei Asia, that has settled the controversy around who is the worlds largest EV seller: they have written that the Chinese titan has beaten Tesla and is now number one. According to Nikkei Asia, BYD has sold 641,000 new vehicles so far this year. The problem is how you decide to count.

China includes plug-in hybrids (

PHEV

) in its NEV classification. Although some business intelligence companies count the two types of vehicles without distinction, such as BNEF, other analysts prefer to count them separately, as Matthias Schmidt does at Schmidt Automotive Research.

Some PHEVs offer higher pure electric ranges than some battery electric vehicles (BEVs). Despite that, they may end up being used as regular

ICE

vehicles if they are not adequately charged. China restricted incentives to plug-in hybrids to the owners that could prove they plugged them in a minimum number of times every month, among other demands.

According to

Nikkei Asia

, Tesla sold 564,000 cars in the first half of 2022. Considering the company only makes BEVs, there are no PHEVs among them. The Twitter account Moneyball (@DKurac) helped us clarify how many BEVs

BYD

sold in the first half of 2022: 323,519. In other words, fewer BEVs than Tesla. If you only consider them as true electric cars, BYD is still halfway to threatening Teslas lead, but there is a catch.

Recently, Plain Site accused Tesla of including used EVs among its delivery numbers. If that is correct, the

EV

maker could be artificially inflating its sales results. Wed ask the company about that if it had a working PR department or anyone willing to answer difficult questions, but that is not the case.

Unfortunately for Tesla, the company has a record of inconsistencies with its numbers. On June 17, 2019, Francine McKenna wrote on

MarketWatch

about how the companys delivery numbers changed between filings. She gave multiple examples of that happening and said the discrepancies revealed

potential weaknesses in accounting and disclosure controls.

Considering what Plain Site brought up, things have not changed that much at Tesla since McKenna published her text.

BYD does not seem to have the same issues. Moneyballs data even corrects the number Nikkei Asia presented: BYD sold 638,157 NEVs in H1, not 641,000. For those who suspect that BYD inflates its NEV numbers with PHEV sales, it sold fewer PHEVs (314,638 units) than BEVs. Regarding production, BYD manufactured a total of 644,721 units, with 327,037

BEVs

and 317,684 PHEVs.

The bottom line is that BYDs win depends on how people make their calculations. If we are to consider

PHEVs

and BEVs as electric cars, BYD is the clear winner. In fact, it already was the winner after May sales numbers were disclosed, as Taylor Ogan pointed out in a tweet on June 8.

If you consider that the right choice is to separate BEVs from PHEVs,

Tesla

is still ahead (if you trust its numbers). BYD seems determined to change that until the end of the year by presenting new products and opening new factories at an impressive speed. Well check again in January 2023 to see if it wins, regardless of the method to count EVs.

Tesla overtaken by Chinas BYD as worlds biggest EV maker

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Elon Musks Tesla has been knocked off the top spot as the worlds best-selling electric-vehicle maker for the first time by BYD after recording fewer deliveries than its Chinese rival in the past quarter.

The US group handed over 484,000 cars in the fourth quarter, more than the 473,000 anticipated by analysts but not enough to hold on to its title after BYD reported record sales of battery-only vehicles of 526,000 for the same period.

Teslas dethroning by BYD reflects the rise of what was a little-known Chinese group only a decade ago, which Musk himself has publicly dismissed. While growth at the Warren Buffett-backed Chinese company has been mostly achieved on its home turf, BYD is sharpening its focus on finding new foreign markets including in Europe.

Danni Hewson, head of financial analysis at AJ Bell, said BYDs electric cars were becoming increasingly visible on European roads thanks to keen pricing.

BYDs success in chasing down Tesla also underlines the struggle of legacy automakers from the US, Europe, Japan and Korea to adapt to fast-changing consumer preferences for cheaper, smarter electric vehicles.

In a statement published in China, the Shenzhen-based group called itself the world champion for new energy vehicles after notching total annual sales of more than 3mn for 2023 across its vehicles which also include plug-in hybrid cars.

Teslas annual sales were 1.81mn vehicles in 2023, while BYD delivered 1.58mn fully electric cars.

Through much of the past 12 months, BYD benefited from price cuts sparked by Teslas attempt to chase market share, pushing consumers to consider Chinas lower-cost models, according to analysts.

For any doubters left in the west, I hope this is the final data point that points to BYDs strength and, as importantly, how China EV Inc has bullied its way on to the global stage, said Tu Le, founder of Beijing-based advisory company Sino Auto Insights.

He added that while both companies cut prices on some cars over the past year, Tesla did so much more dramatically, signalling that BYD could distance itself further from the US group over the coming year.

Still, WedbushSecurities analyst Dan Ives said it was an important quarter for Tesla to show strong deliveries and momentum heading into 2024.

Teslas annual sales of 1.8mn last year was a major achievement in a choppy macro [economic environment] for the electric vehicles sector, he added.

BYD was founded by Wang Chuanfu, a former university professor, in the mid-1990s. After focusing on manufacturing rechargeable batteries, including for mobile phones, the company expanded into the car industry in the early 2000s.

The Chinese groups early success prompted Buffetts Berkshire Hathaway to invest in the company in 2008. Despite relying on existing industry technology for many years, BYD has focused on stripping out costs from the production process.

Following years of state support and careful industrial planning by Beijing, Chinas automakers now leverage their countrys control over the production of almost every resource, material and component used to make electric vehicles.

BYDs vertically integrated structure it controls mines and produces batteries and chips has made it the envy of foreign rivals as the global car industry transitions away from the combustion engine.

At the end of last year six out of the top-selling EV models in China, the worlds largest car market, were BYD cars, according to Automobility, a Shanghai-based consultancy. While BYDs share of sales has expanded to more than 35 per cent, Tesla has struggled to keep up with the cadence of product launches by Chinese rivals, the consultancy added.

BYD Overtakes Tesla, With Other Chinese EV Makers Close Behind

BYD has overtaken Tesla as the worlds biggest selling electric vehicle maker, and other Chinese manufacturers will soon join it as they lead the electric revolution at the expense of their Western competitors.

We believe BYD and other leading Chinese [manufacturers] are set to conquer the world market with high-tech, low-cost EVs for the masses, hereby accelerating global EV adoption, investment bank UBS said in a report.

UBS and other experts said only Tesla can keep pace with the Chinese.

Europe will be the main target and exclude the U.S., at least for now, according to the Wall Street Journal.

Western countries are getting anxious about cheaper Chinese EVs flooding their markets. Europe has launched an anti-subsidy probe into EVs from China, while the Biden administration is considering raising tariffs on Chinese EVs, said the WSJs Heard on the Street columnist Jacky Wong.

No Chinese EVs are sold in the U.S. because of rules excluding batteries and other components produced by Chinese manufacturers from its supply chain under the Inflation Reduction Act.

BYD accelerated past Tesla to claim the title of the worlds biggest seller of EVs in 2023s fourth quarter, selling about 530,000, beating Teslas 485,000.

Late last year, BYD announced it would build a new factory in Szeged, southern Hungary, which would help it avoid any increased tariffs the European Union might levy if it finds excess subsidies. Other Chinese companies will likely follow BYDs example and assemble cars in Europe.

Europe is likely to become a battleground for Chinese EVs with only one likely winner, given the at least 30% price advantage the likes of China's BYD, Geely, SAIC, NIO and Great Wall Motors have, according to UBS. The BYD Dolphin costs around $33,000 in Britain, almost a third less than its claimed equivalent, the VW ID.3.

Reuters Breakingviews column reckons Tesla will still be mixing it with the Chinese at the top of the EV tree while so-called legacy players like Ford Motor, General Motors and Volkswagen struggle. In Europe and the U.S., demand for EVs has taken a hit recently, with these legacy firms finding their output of electric cars piling up on dealer lots.

Even allowing for recent wobbles, worldwide EV sales are rising faster than those powered by gasoline yet account for only slightly more than a tenth of new car deliveries. Both companies are still expanding manufacturing capacity too, Tesla in Germany and Mexico, while BYD is setting up in Hungary, Brazil and Thailand (and reportedly in Mexico also, according to Dunne Insights), Breakingviews Antony Currie said.

Michael Dunne, CEO of Dunne Insights, said no other manufacturer can match BYDs EVs for price. The company is comfortable making thin margins to win market share, and this frightens the competition in the U.S., Europe, Korea and Japan, except Tesla.

BYD now produces arguably the worlds most advanced battery, called the Blade. The battery delivers maximum energy density, safety and efficiency. Most of the gains are from the super-efficient blade battery pack design and inventive manufacturing processes. Think of the Blade as the equivalent of a high-quality Toyota gasoline engine: reliable, affordable and efficient. Mercedes, Ford and Kia have already decided to source some of their batteries from BYD, Dunne said.

Dunn said Tesla doesnt fear BYD yet.

Tesla enjoys extraordinary global brand power. The BYD image is rather bland, evoking little emotion. As a battery company that moved up into cars, BYD is still searching for an identity that clicks with customers, Dunne said.

Tesla is still a premium manufacturer while BYD serves mostly mass markets.

Things could change. But today few people looking at a Tesla opt for a BYD, Dunne said. Teslas charging network and software is still way ahead of BYDs.

UBS said EV demand in Europe will remain lackluster in 2024, with the Chinese adding up to 200,000 vehicles to the total market reaching about 1,950,000. But after that, watch out Europe.

We expect Chinese [manufacturers] to own one-third of the global [EV] car market by 2030. Europeans most at risk, UBS said.

Warren Buffett-backed Chinese group BYD overtakes Tesla in global electric vehicle sales

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BYD, the Chinese auto group backed by Warren Buffetts Berkshire Hathaway, has dethroned Elon Musks Tesla as the worlds biggest electric vehicle producer by sales, signalling Chinas rising dominance of the sector.

Shenzhen-based BYD sold 641,000 vehicles in the first six months of the year, a more than 300 per cent jump from the same period a year earlier, according to company filings.

That compared with 564,000 vehicles sold by Tesla, which has blamed a tough second quarter on supply chain and sales disruptions in China after its operations were hit by coronavirus lockdowns and travel restrictions.

BYDs rise underscores Chinas strengthening position in renewable energy, boasting scale and cost advantages across much of the supply chain for electric vehicles, batteries and wind and solar energy.

The performance looks impressive, said Jeff Chung, an auto analyst with Citigroup, of BYDs sales growth.

Many of BYDs models are plug-in hybrid vehicles, which use a large battery in addition to a traditional engine for longer journeys, but are counted as zero emission vehicles under Chinas sales rules.

BYD, which is part-owned by Buffetts Berkshire Hathaway, has also overtaken South Koreas LG as the worlds second-biggest producer of EV batteries, behind Chinas Contemporary Amperex Technology, known as CATL.

According to Seoul-based SNE Research, BYD has outpaced LG Energy in terms of monthly market share since April. This was in part because of disruptions at Teslas Shanghai factory after Chinas most populous city was forced into a two-month lockdown to suppress a wave of Omicron coronavirus cases.

Tesla, along with a clutch of Chinese EV makers including Li Auto, Xpeng and Nio, were harder hit by the lockdowns than BYD, which benefited because most of its factories are not based in the regions and cities that suffered the most severe restrictions.

Analysts view the rise of Chinas domestic auto industry as a forerunner to a tectonic shift in the global auto market as Chinese EV makers start to sharpen their focus on export markets.

Last year, China, the worlds largest car market, exported more than half a million electric vehicles, more than double the previous years figure.

Yet about a third of Chinas exports into Europe were Chinese-owned European brands, such as Volvo Cars and MG Motor, while just 2 per cent represented Chinese brands, according to researchers at the Mercator Institute for China Studies, a Berlin-based think-tank. Almost half were from Tesla and the remaining 14 per cent were from European joint ventures in China.

However, Tu Le, managing director of advisory group Sino Auto Insights, said BYD, was firing on all cylinders, with products covering many critical EV market segments.

He also expected BYD to soon challenge foreign automakers on their home turf, especially in the US. Theyre going to make some really aggressive moves to go international, he said.