The Rise of a Chinese Electric Vehicle Competitor

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Back in 1995, Wang Chuanfu, a metallurgy graduate, started BYD, a small Chinese company that aimed to make rechargeable nickel-cadmium batteries at a lower cost than its Japanese rivals.

Nearly 30 years later, the company from Shenzhen has grown to become the top producer of electric vehicles (EVs) worldwide, surpassing even the American company Tesla (TSLA) in global sales of pure electric cars in the final quarter of 2023.

However, the competition between the two companies remains fierce, with Tesla reclaiming its top spot in the first quarter of 2024.

Here’s how they compare, in four charts:

Most valuable carmakers

Tesla's stock was initially priced at $17 per share when it went public in June 2010. Fast forward nearly 14 years, the company's shares are now trading above $166, resulting in a market capitalization of around $560 billion. This makes Tesla the most valuable car company globally and one of the largest companies by market value.

On the other hand, BYD, with a market capitalization of $81 billion, is ranked among the top 10 automakers worldwide, as stated by Murthy Grandhi, a business fundamentals analyst at GlobalData, a data and analytics company based in London.

BYD still lags behind Tesla and other car manufacturers such as Toyota and Stellantis. Stellantis is a conglomerate formed in 2021 from the merger of French PSA Group and Fiat Chrysler Automobiles. The group sells cars under 14 different brands, including Chrysler, Citroën, Jeep, Maserati, and Peugeot.

However, BYD has already outperformed BMW and Ford and is quickly closing the gap with Mercedes-Benz and Ferrari.

In 2023, Tesla sold approximately 230,000 more cars than BYD. However, the difference has been decreasing from 400,000 in 2022 and 600,000 in 2021.

In the final quarter of 2023, BYD achieved a significant milestone by selling more battery electric vehicles (BEVs) globally compared to Musk's company. This was partly due to a slowdown for Tesla in China, one of its largest markets, and a general decrease in demand for electric vehicles.

However, in early 2024, the Chinese company faced a setback. They only managed to sell 300,114 BEVs in the first quarter, a significant decrease from the 525,409 units sold in the previous three months.

Despite experiencing a decline in sales, Tesla was able to reclaim its top spot by selling 386,810 BEVs in the same period.

BYD's affordable pricing has been a key factor in its success in the EV market, setting it apart from Tesla's higher-priced vehicles. However, both companies are facing increased competition in the global car market.

BYD recently introduced an updated version of the Yuan Plus crossover, also known as Atto 3, with a reduced price of 119,800 yuan ($16,644), which is 11% lower than its predecessor.

Following this, the company also lowered the price of the latest model of its affordable car, the Seagull, by 5%, making it available for under $10,000.

Tesla reduced prices on certain models in China last year, but the Model 3 and Model Y are still priced at more than double the cost of BYD's models.

China is Tesla's second-largest market, following the United States, and accounted for 33% of global sales in 2023, as reported by UK consultancy firm Rho Motion. Tesla began production at its Shanghai Gigafactory in 2019, with the facility serving as its primary export hub. In the previous year, the Gigafactory in Shanghai successfully delivered 947,000 vehicles.

BYD does not currently sell cars in the United States. However, they do have a bus manufacturing plant located in California. Both Tesla and BYD are expanding their reach beyond their domestic markets by investing in factories in other countries.

In 2023, global sales of electric vehicles (EVs), which includes both Battery Electric Vehicles (BEVs) and hybrids, reached a total of 13.6 million units. This marked a significant increase of more than 30% compared to the previous year. The Chinese market experienced a growth of approximately 30% in the same period, with 7.9 million EVs sold. It is projected that similar growth will continue in 2024, with expected sales of 10 million units in China alone, according to Rho Motion.

BYD, a leading electric vehicle manufacturer, reported global sales of about 3 million electric cars in 2023. This figure includes both hybrid vehicles and BEVs. Of the total number of vehicles sold by BYD, 1.6 million were BEVs.

Tesla, unlike selling hybrids, sold a total of 1.8 million vehicles worldwide last year, making up approximately 19% of the global market for BEVs.

Out of the total, 700,000 vehicles were purchased in the United States and Canada, 600,000 in China, and around 400,000 in Europe.

Tesla’s shares are down 29% so far this year, while BYD stock is down almost 6%.

— CNN’s Laura He contributed reporting.

Editor's P/S:

This article highlights the rapid growth and global impact of China's electric vehicle industry, exemplified by the success of BYD. Despite facing competition from established players like Tesla, BYD's affordable pricing has propelled them to become the world's largest EV producer, showcasing China's growing technological prowess in the automotive sector.

The article underscores the intense competition between BYD and Tesla, with both companies investing heavily in research and production facilities worldwide. While Tesla remains the most valuable carmaker in terms of market capitalization, BYD's rapid ascent suggests a potential shift in the global automotive landscape. The article also sheds light on the increasing importance of China's EV market and its role in driving the industry's growth. BYD's dominance in China demonstrates the growing demand for affordable EVs, particularly amidst a surge in global sales of electric vehicles.