BYD has overtaken Tesla as the world’s biggest selling electric vehicle (EV) maker and other Chinese manufacturers will soon join it as they lead the electric revolution at the expense of other Western competitors.
“We believe BYD and other leading Chinese (manufacturers) are set to conquer the world market with high-tech, low-cost EVs for the masses, hereby accelerating global EV adoption,” investment bank UBS said in a report.
UBS and other experts said only Tesla can keep pace with the Chinese.
Europe will be the main target and exclude the U.S., at least for now, according to the Wall Street Journal.
“Western countries are getting anxious about cheaper Chinese EVs flooding their markets. Europe has launched an anti-subsidy probe into EVs from China, while the Biden administration is considering raising tariffs on Chinese EVs,” said the WSJ’s Heard on the Street column.
BYD accelerated past Tesla to claim the title of the world’s biggest seller of EVs in 2023’s fourth quarter, selling about 530,000, beating Tesla’s 485,000.
Late last year, BYD announced it would build a new factory in Szeged, southern Hungary, which would help it avoid any increased tariffs the European Union might levy if it finds excess subsidies. Other Chinese companies will likely follow BYD’s example and assemble cars in Europe.
Europe is likely to become a battleground for Chinese EVs with only one likely winner, given the at least 30% price advantage the likes of China’s BYD, Geely, SAIC, NIO and Great Wall Motors have, according to UBS.
Reuters’ Breaking Views column reckons Tesla will still be mixing it with the Chinese at the top of the EV tree while so-called “legacy” players like Ford Motor, General Motors and Volkswagen struggle. In Europe and the U.S., demand for EVs has taken a hit recently, with these “legacy” firms finding their output of electric cars piling up on dealer lots.
“Even allowing for recent wobbles, worldwide EV sales are rising faster than those powered by gasoline yet account for only slightly more than a tenth of new car deliveries. Both companies are still expanding manufacturing capacity too, Tesla in Germany and Mexico, while BYD is setting up in Hungary, Brazil and Thailand (and reportedly in Mexico also, according to Dunne Insights),” Breaking Views’ Antony Currie said.
Michael Dunne, CEO of Dunne Insights, said no other manufacturer can match BYD’s EVs for price. The company is comfortable making thin margins to win market share, and this frightens the competition in the U.S., Europe, Korea and Japan, except Tesla.
“BYD now produces arguably the world’s most advanced battery, called the Blade. The battery delivers maximum energy density, safety and efficiency. Most of the gains are from the super-efficient blade battery pack design and inventive manufacturing processes. Think of the Blade as the equivalent of a high-quality Toyota gasoline engine: reliable, affordable and efficient. Mercedes, Ford and Kia have already decided to source some of their batteries from BYD,” Dunne said.
Dunn said Tesla doesn’t fear BYD yet.
“Tesla enjoys extraordinary global brand power. The BYD image is rather bland, evoking little emotion. As a battery company that moved up into cars, BYD is still searching for an identity that clicks with customers,” Dunne said.
Tesla is still a premium manufacturer while BYD serves mostly mass markets.
“Things could change. But today few people looking at a Tesla opt for a BYD,” Dunne said. Tesla’s charging network and software is still way ahead of BYD’s.
UBS said EV demand in Europe will remain lacklustre in 2024 with the Chinese adding up to 200,000 vehicles to the total market reaching about 1,950,000. But after that, watch out Europe.
“We expect Chinese (manufacturers) to own one-third of the global (EV) car market by 2030. Europeans most at risk,” UBS said.
