BYD Surpasses Tesla in 2023: China’s EV Dominance Expands Globally
BYD surpassed Tesla to claim the title of the world’s largest electric car company in the final quarter of 2023, as per a stock exchange filing.
The Chinese company achieved this milestone by selling a record-breaking number of cars last year, including 525,409 battery electric vehicles (BEVs) in the three months ending December 31. In contrast, Tesla, in a Tuesday announcement, disclosed deliveries of 484,507 electric vehicles during the quarter, also setting a new record, CNN reported.
Although BYD outperformed Tesla in the final quarter, Tesla sustained its yearly lead by selling 1.8 million electric cars, surpassing BYD’s 1.57 million electric vehicles—a 73% increase from 2022. BYD also sold 1.44 million hybrids in the same period.
BYD’s rapid growth, backed by Warren Buffett, led to a narrower gap with Tesla in 2023, reducing from 400,000 to approximately 230,000 units. This underscores China’s ascendance in the electric vehicle (EV) industry, fueled by robust government support. Chinese carmakers are expanding into Europe, prompting an EU investigation into Chinese state subsidies and causing concerns for traditional rivals like Volkswagen and Renault.
Analysts say that notable contributors to the surge in sales include the introduction of new energy vehicles (NEVs), robust sales growth due to aggressive marketing campaigns and discounts by manufacturers, and sustained consumer interest in innovative automotive technologies. These factors have collectively outweighed the broader economic slowdown, showcasing the resilience and adaptability of the automotive sector in the Chinese market.
Beijing aims for a minimum of 20% of annual new car sales in China to be new energy vehicles (NEVs) by 2025, including BEVs, plug-in hybrids, and hydrogen fuel cell vehicles. Surpassing its 2022 target, China achieved a 20% NEV share three years ahead, with 8.3 million NEVs sold in the first 11 months of 2023, constituting over 30% of total car sales. Miao Wei, former minister of China’s Ministry of Industry and Information Technology, anticipates reaching the government’s 50% NEV penetration goal by 2025 or 2026.
The sector’s analysts credit China’s global EV industry leadership to its market scale, cost-effective labor, and supply chain dominance, emphasizing production leadership, a first-mover advantage, and government support as key factors. However, a price war in China, triggered by Tesla’s initiative to reduce prices amid a demand slowdown, impacted automakers’ profit margins, with the industry recording a 5% margin for the first 11 months of last year, down from 5.7% in 2022 and 6.1% in 2021.
To counter the domestic market’s slowdown, Chinese car manufacturers are expanding globally. BYD, for example, plans to build its first European passenger car plant in Hungary and aims to double its European dealer partners in 2023, targeting 250,000 unit sales, up from 56,000 in 2022.
