China's BYD overtakes Tesla in last quarter as world’s top EV seller

Although Tesla still sold more for the whole of 2023, with a better than expectedend-of-year performance with 1.8 million vehicles delivered, it fell below Musk’s plan to achieve two million for 2023. For the year as a whole, the Shenzen-based BYD sold more than 3 million so-called-new energy vehicles (NEVs), which includes battery-only vehicles and hybrids. Almost 1.6 million of its total sales were battery-only vehicles, the firm said.

This development highlights the intensifying competition in the EV sector, particularly in China, which represents up to a quarter of Tesla's global market.

Tesla's journey in China has been a combination of overcoming challenges and seizing opportunities. Entering China in 2013, Tesla confronted issues such as high tariffs, strong competition from domestic brands, and infrastructural challenges. In 2019, the company opened a Shanghai Gigafactory in a move signalling a significant commitment to the Chinese market - which accounts for about a quarter of Tesla's total sales.

Yet, earlier last year, China’s market regulator identified an issue with 1.1 million Tesla EVs, issuing a “product recall”, nearly equivalent to Tesla’s total sales in mainland China during the four-year period of 2019-2023.

BYD, founded in 1995 by Wang Chuanfu, transitioned from a rechargeable battery manufacturer to a major force in the EV market. Its competitive edge largely stems from in-house battery production, enabling cost-effective vehicle offerings. BYD's Seagull hatchback, priced lower than Tesla's Model 3, quickly became a popular model in China.

Elon Musk has acknowledged the formidable challenge posed by Chinese car companies in the EV space. He highlighted China's manufacturing excellence and strong work ethic as key contributors to its competitive edge. China's role as the largest global EV market and home to the majority of EV sales adds to the strategic importance of Tesla's presence there.

The recent performance of BYD and other Chinese manufacturers like Wuling and Zeekr showcases the diversity of strategies and evolving consumer preferences within the industry. The global EV market is undergoing a rapid transformation, with traditional automotive giants adapting to emerging challenges and new players introducing innovative solutions. The competition between Tesla and BYD in China exemplifies the increasing importance of sustainable transportation solutions.

As the EV market continues to evolve, the rivalry between Tesla and Chinese manufacturers like BYD will likely be a defining factor in shaping the future of the automotive industry.

Tesla has dominated the global EV market for years, claiming it delivered a record 484,500 electric vehicles in the last three months of 2023. BYD, which does not sell its cars in the US, sold just 3,000 fewer EVs than Tesla in the three months to September 30th.

Tesla has previously stated it aims to sell 20 million EVs a year by 2030.