Chinese carmaker BYD is on the verge of overtaking Tesla as the world's most popular electric car maker, new analysis shows.
The gap between the two giants has steadily narrowed in recent years, with Tesla selling just 3,456 more electric vehicles than BYD in the last financial quarter.
It's undoubtedly embarrassing news for Tesla founder Elon Musk, who once famously snickered at BYD's cars during a 2011 appearance at Bloomberg Television. Experts speculate that BYD could overtake the American automaker early next year.
But it comes as demand for electric vehicles overall is starting to decline as U.S. car dealers complain of vehicles piling up unsold on their lots.
A host of automakers such as Toyota, Volkswagen and General Motors have invested millions in new EV projects in an effort to compete with Tesla.
Chinese carmaker BYD is on the verge of overtaking Tesla as the world's most popular electric car maker, new analysis shows. In the photo: Tesla founder Elon Musk in November this year
The gap between the two giants has steadily narrowed in recent years, with Tesla selling just 3,456 more electric vehicles than BYD in the last financial quarter
It's the latest blow for Musk – after DailyMail.com revealed earlier this month how a Tesla engineer was attacked by one of the company's own robots during a brutal and bloody outage at the company's Giga Texas factory nearby of Austin.
A driving factor behind BYD's success is its relative affordability. The entry-level BYD e1 costs $10,000 in the US – almost a quarter of the $38,990 price tag of a Tesla Model 3.
Bridget McCarthy, head of China operations at Shenzhen-based hedge fund Snow Bull Capital, said Bloomberg: 'The competitive landscape of the automotive industry has changed.
“It's no longer about the size and legacy of car companies; it's about the speed at which they can innovate and iterate. BYD began preparing long ago to do this faster than anyone thought possible, and now the rest of the industry must rush to catch up.”
And it looks like Elon Musk is paying attention. In May, a Twitter account dedicated to Tesla owners posted a 2011 clip of Musk snickering at the brand.
But the 52-year-old multi-billionaire shot back: “That was many years ago. Their cars are very competitive these days.”
Research from S&P Global shows that global sales of electric cars are expected to fall to 1,051,824 in January 2024. This is down from 1,406,407 in December and 1,287,991 in November this year
For seasoned investors, BYD's appeal was clear from the start. In 2008, Berkshire Hathaway Inc. invested. from Warren Buffett approximately $230 million for a 10 percent stake in the company.
The following year, Berkshire Bice chairman Charlie Munger told Bloomberg TV that BYD was “one of the most important topics affecting humanity's technological future.”
He later reaffirmed his opinion, telling the Acquired podcast that “the guy at BYD is better at actually making things than Elon.”
BYD is led by CEO Wang Chuanfu, 53, who started his career as a government researcher into rare earth metals crucial for batteries and electronics. He is now worth $14.8 billion, according to the Bloomberg Billionaires' Index.
However, the manufacturer faces a tough challenge in retaining a US market because none of its vehicles qualify for the federal electric car tax credit, worth up to $7,500. This is because the credit has strict rules about cars produced in the US.
In addition, a rate of 25 percent also applies. And the Wall Street Journal reported last week that the Biden administration is discussing raising this levy even further.
The entry-level BYD e1 costs $10,000 in the US – almost a quarter of the $38,990 price tag of a Tesla Model 3, pictured
Similarly, Europe also appears poised to join the US in imposing higher tariffs on Chinese car imports.
Nevertheless, Chuanfu remains optimistic. He recently told an event that Chinese automakers should work together to destroy “the old legends” of the automotive world.
BYD is expected to launch its third generation of EVs next year, which may offer automated driving capabilities like Tesla.
But across the board, it seems that demand for ecological vehicles is starting to stagnate.
Research from S&P Global shows that global sales of electric vehicles are expected to fall to 1,051,824 in January 2024. This is down from 1,406,407 in December and 1,287,991 in November this year.
Auto shopping website Edmunds told the Wall Street Journal that it takes about three weeks longer for a dealer to sell an electric car than a gasoline car.
There also appears to be a geographic divide, with some states more likely to adopt the technology than others.
Nearly a quarter of all vehicles sold in California between July and September were electric vehicles, compared to just 3 percent in Michigan, according to the trade group Alliance for Automotive Innovation.