Unlock the Editor’s Digest for free

Tesla was dethroned by BYD as the world’s best-selling electric-vehicle maker last quarter after recording fewer deliveries than its Chinese rival for the first time.

The US company, run by Elon Musk, handed over 484,000 cars in the fourth quarter, Tesla said on Tuesday, more than the 473,000 anticipated by analysts polled by LSEG.

BYD on Monday reported record sales of battery-only vehicles of 526,000 for the same period, helped by a strong end to the year for the Chinese electric vehicle market. This is the first time the Chinese group has exceeded Tesla’s quarterly sales of fully electric cars.

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

BYD’s 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.

Tesla’s 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 Tesla’s bid to chase market share and which pushed consumers to consider China’s lower-cost models, according to analysts.

“For any doubters left in the west, I hope this is the final data point that points to BYD’s strength and, as importantly, how ‘China EV Inc’ has bullied its way onto 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 American group over the coming year.

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

Tesla’s sales of 1.8mn was a “major achievement in a choppy macro [economic environment]” for the electric vehicles sector, he said.

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

The Chinese group’s early success prompted Warren Buffett’s 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, China’s automakers are able to leverage their country’s control over the production of almost every resource, material and component used to make electric vehicles.

BYD’s vertically integrated structure — it controls mines and produces batteries and chips — has made it the envy of foreign rivals as the global car industry transition away from the combustion engine.

At the end of last year six out of the top-selling EV models in China, the world’s largest car market, were BYD cars, according to Automobility, a Shanghai-based consultancy. While BYD’s 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 said.

Read the full article here

Share.
Exit mobile version