Tesla's long-standing rivalry with BYD, a Chinese EV maker backed by US investor Warren Buffett, has just reached boiling point, with BYD posting sales figures for the period October to December 2023 that have surpassed Tesla for the first time.
Elon Musk's Tesla, which delivered a record 484,507 electric vehicles in the fourth quarter, was still outpaced by its closest rival, which launched 526,409 electric vehicles in the same period, according to Reuters.
The outspoken CEO set an ambitious target of delivering two million vehicles by 2023, but it was revealed that Tesla managed 1.8 million, while rival BYD sold more than 3 million plug-in passenger cars in total.
That said, BYD is also adding plug-in hybrids to that sales mix, effectively selling just under 1.6 million pure EVs, meaning Tesla remains the overall champion of global pure battery-electric sales vehicles in 2023.
Another fact to consider is that the vast majority of BYD's sales came from the domestic market, where it offers a variety of all-electric models that vastly undercut the Model 3 and Model Y in price – both of which are made in the Tesla factory in Shanghai.
Is BYD ready for global dominance?
So what's the story with BYD? Owned by billionaire founder Wang Chuanfu, the company started life as a rechargeable battery manufacturer and supplier to the global mobile phone industry. It quickly became a great success when it managed to reduce the cost of its products using innovative production methods.
An acquisition of the then-failing Shaanxi Qinchuan Auto Company Limited (Qinchuan Auto) in 2003 signaled its intention to enter the automotive sector.
The road to car manufacturing success was not smooth, but an early focus on battery-electric vehicles and plug-in hybrids (likely aided by subsidies from the Chinese government) gave BYD an edge over many rivals and the company has since acquired rapidly a huge market share in China.
This is thanks to a number of affordable pure EV models, including the best-selling Song and Seagull nameplates, both of which are available in China for around $30,000 / £23,000 / AUS$45,000.
As a result, many markets are trying to impose tariffs on Chinese imports, slowing BYD's quest for global dominance in electric car sales. This move has been taken largely to protect local jobs and ensure that older carmakers are not priced out of the market.
A report from Bloomberg stated late last year: 'Europe appears ready to join the US in punishing Chinese auto imports with higher tariffs to protect thousands of manufacturing jobs.
“Other countries' EV markets are still in their infancy and not nearly as lucrative (as China). Management views the US as virtually off limits due to escalating trade tensions between Washington and Beijing.”
US and European customer awareness of Chinese brands is still low, given that very few models are actually on sale in those regions, but some are starting to make inroads.
Companies like Nio, Zeekr and XPENG have had some success in Europe, a BYD spokesperson said CNN in 2023 that it wanted to double the number of dealer partners in Europe.
It also announced it would build a factory in Hungary to vastly increase its European sales.