In the fast-evolving world of Electric Vehicles (EVs), the year 2023 is proving to be a watershed moment, with the sector witnessing a sea change in terms of market share. While Tesla (NASDAQ:TSLA) has long been synonymous with electric cars, there has been a notable shift in global market share dynamics, with China-based BYD in the spotlight.
Specifically, data obtained by Finbold indicates that in the first half of 2023, BYD sold 1,191,405 electric vehicles, representing an average of 198,567 units per month. BYD’s unit sales exceeded 302,526 vehicles to Tesla’s 888,879. In the first six months of 2023, the US EV maker will average 148,146 vehicle sales per month. Units include battery electric vehicles and plug-in hybrid electric vehicles.
Other top sellers include BMW with 220,795 units, followed by GAC Aeon with 212,090 EVs, while Volkswagen sold 209,852 units. Notably, only manufacturers from China, Germany and the United States are represented in the top eight EV vendors. China accounts for four manufacturers or 50% of the list.
Tracking BYD’s Growth in EV Sales
BYD’s remarkable growth has come despite previous persistent concerns regarding the quality and safety of China’s electric vehicles. The company has often been in the shadow of industry giants like Tesla and other established traditional players. However, several factors have driven the company’s electric vehicle success, with the domestic market contributing significantly.
A notable aspect of BYD’s appeal is its commitment to offering value for money, along with local demand for affordable domestic products amid a slowing Chinese economy. The company’s vehicle models are priced lower than their overseas competitors.
BYD’s manufacturing of most components contributes to cost reduction, and any components it does not produce are readily available from Chinese suppliers. It is worth highlighting that this cost-efficiency has been particularly beneficial amid supply chain disruptions due to the pandemic, which affected manufacturers such as Tesla.
Additionally, BYD benefited from its strategic location in Shenzhen during the pandemic. Shenzhen experienced less stringent lockdown measures than Shanghai, where Tesla operates its largest overseas plant. This geographic advantage allowed BYD to maintain a smooth production process and potentially gain a competitive edge during challenging times.
Like other Chinese EV makers, BYD has flourished thanks to a decade of government subsidies. These subsidies are part of China’s drive to move away from gasoline-powered vehicles and become a global renewable energy leader. In addition, the government also provides incentives such as subsidies and tax exemptions to encourage the adoption of low-emission vehicles.
trying to catch tesla
In contrast, Tesla lagging behind BYD is somewhat unexpected, given that Tesla is one of the early pioneers of electric vehicles and has been working to ensure global availability of EVs. Like many other companies, it is important to mention that Tesla faced supply chain disruptions due to the pandemic, which affected its production numbers. However, the company aims to catch up with its competitors by starting production at the Austin facility.
The company has implemented several strategic measures to increase sales, especially in the face of increasing competition. Tesla is specifically addressing the pricing issue by significantly reducing the prices of older models. While these price cuts have sparked controversy among existing owners, CEO Elon Musk indicated in July that the company may continue to pursue such reductions.
It’s worth noting that China ranks among Tesla’s top markets, and the company has also lowered prices in the region while increasing discounts and other incentives to manage inventory and protect against competition and economic uncertainty.
Banking on Cybertruck
At the same time, Tesla is counting on the hype surrounding the Cybertruck to grab market share from BYD. The Cybertruck represents Tesla’s bold venture into the traditionally conservative pickup truck segment, boasting remarkable range, impressive towing capabilities and acceleration that can rival high-performance cars while appealing to a wide range of consumers .
This was underscored by a previous report from Finbold, which indicated that the company was receiving 1,000 CyberTruck reservations per day. It remains to be seen whether these reservations will translate into actual sales given the increasing competition in the market.
Looking ahead, BYD is focused on expanding globally. While it has successfully sold electric buses in the US, India and Japan, the company aims to enter the international car market.
In this regard, Tesla may have an advantage, given that the company already has a global presence, with Berlin and Austin plants consolidating its position in the US and Europe. However, the company continues to be on the lookout for other entities like Rivian (NASDAQ: RIVN) .