In a significant milestone, Chinese automaker BYD has overtaken Tesla to become the world's largest electric car company in the final quarter of 2023. According to a stock exchange filing, BYD achieved a record-breaking sales figure, selling 525,409 battery electric vehicles (BEVs) in the three months leading up to December 31. In comparison, Tesla reported delivering 484,507 electric vehicles during the same quarter, also a record for the company.
While Tesla maintained its lead throughout the entire year, selling 1.8 million electric cars, BYD closed the gap significantly by selling 1.57 million electric vehicles, marking a remarkable 73% increase from 2022. Additionally, BYD sold 1.44 million hybrids, showcasing its diverse portfolio.
The narrowing gap between Tesla and BYD, now at around 230,000 units in 2023 compared to 400,000 units in 2022, highlights the rapid growth of BYD and the increasing competition in the electric vehicle (EV) market.
Backed by Warren Buffett, BYD's success symbolizes China's dominance in the EV industry. The country has been making swift progress in transitioning to electric vehicles, buoyed by strong government support. Chinese carmakers, including BYD, are expanding globally, particularly in Europe, causing concern among traditional rivals such as Volkswagen and Renault.
China aims to have at least 20% of new cars sold annually in the country by 2025 categorized as new energy vehicles (NEVs), which encompass BEVs, plug-in hybrids, and hydrogen fuel cell vehicles. Furthermore, by 2035, the government envisions NEVs becoming the mainstream in new car sales.
Recent data reveals that China has surpassed expectations, with over 8.3 million units of new energy vehicles sold in the first 11 months of 2023, accounting for more than 30% of total car sales. Former minister Miao Wei anticipates China achieving its target of 50% NEV penetration by 2035 as early as 2025 or 2026.
While BYD's rise is attributed to China's massive market scale, cost advantages, and supply chain dominance, the intense competition and price wars have impacted the profit margins of many automakers. To counteract a potential slowdown in the domestic market, Chinese carmakers like BYD are aggressively expanding internationally, with plans for an EV factory in Hungary as part of their global growth strategy.