Tesla Dominance Threatened as BYD EV Sales Explode
Tesla’s dominance in the sale of electric cars is under immense pressure more than ever. While the US EV giant has dominated the sector for years, competition is slowly catching up as cheaper alternatives hit the market. Chinese EV giant BYD Co appears to have everything going for it in the race to topple the US automaker.
BYD vs. Tesla EV Sales
The Chinese electric car giant came to a whisker from toppling Tesla in the third quarter on selling 431,603 fully electric cars. The sales represented a 23% increase from the second quarter. In contrast, Tesla shipped 435,059 electric cars, signalling the narrowing of the gap between the two companies.
The impressive numbers posted by the Chinese automaker came on pushing into new markets and wooing customers with more affordable electric vehicles than Tesla. The Shenzhen-based automaker sold 822,094 vehicles, including hybrids, propelling it to another record quarter, which affirms its status as China’s best selling automaker.
On the other hand, Tesla struggled with factory downtime in the quarter, which triggered the first quarterly delivery decline in nearly a year. The company missed deliveries by about 20,000 units, hurt by a move to take some factories offline to make them more adaptable for a refreshed Model 3 sedan. The US automaker is also preparing the factories to accelerate production of the yet-to-be-released Cybertruck.
The premium price that the US automaker charges for its EV models might also have a hand in limiting the amount of cars it could sell compared to the run rate at BYD. Nevertheless, CEO Elon Musk insists the company is on track to deliver over 1.8 million vehicles by year-end. On the other hand, BYD is targeting 3 million cars, including hybrids.
EU Tariffs on China EVs
While BYD has made a name for itself in selling affordable electric cars to the masses, the company is also increasingly encroaching into the higher-end markets. The company has already unveiled two luxury EV brands as it looks to enjoy the bumper profit margins that Tesla enjoys on selling premium EVs. Yangwang and Fang Cheng Bao are the two models that the Chinese EV company hopes to use to penetrate the $137,000 price category.
In addition, the Chinese automaker has also set sights on the international market as it looks to explore new revenue opportunities beyond China. It has also started to make its own batteries and semiconductor chips as it looks to keep production costs lower to have a better chance of a large chunk of the overseas sale market.
The biggest headwind standing in the way of BYD conquering the international market is heightened regulatory scrutiny. Regulators have already set sights on the company and Tesla over Chinese subsidies on EVs. The regulators insist the subsidies offer the two automakers a competitive advantage against European automakers.
European officials are concerned that an influx of Chinese electric vehicles into the block would threaten millions of auto jobs; consequently, the officials have launched an investigation into China’s support for the EV industry to counter them to protect the region’s auto industry. There are suggestions that the EU could end up imposing tariffs on Chinese EV imports, something that could also affect Tesla, which produces most of its cars in China.