Chinese EV firm fuels rivalry with Tesla
The crown jewel of Elon Musk’s wealth-generating empire is undoubtedly the Austin-based electric vehicle brand Tesla. As the auto industry has been striving for a greener future, Tesla is leading the charge.
Routinely ranked as the most valuable car brand in the world, and not by a small margin, the EV darling is known for making waves with its design, technology and relative accessibility.
However, after years of enjoying dominance in the EV space, it looks as if the company finally has a formidable foe — and it’s one with which Elon Musk is very familiar.
Build Your Dreams, commonly known as BYD, is a Chinese EV brand that has been steadily increasing production and sales in recent years. At one point in 2023, the company even surpassed Tesla in worldwide sales. As competition in the EV space grows, how worried does Tesla need to be and what does BYD plan for the future?
BYD was founded in 1995 by Chinese businessman Wang Chuanfu and has since seen considerable investment from Western firms, including Warren Buffet’s Berkshire Hathaway.
The company operates predominantly in China, where its home country’s booming car market has bolstered sales. Seen as a cheaper way to get into an EV, BYD vehicles can start as low as $9,700 and are most prominent in Asia and Europe. Because of the accessible price tag, BYD has seen its value skyrocket. According to Statistica, a data analytics company, the Chinese brand is now the sixth most valuable car brand in the world. Also worth noting: It is one of only two brands in the top 10 that specialize in EVs — the other is Tesla, which tops the list.
In 2019, during an uncertain time for Tesla as the company faced malfunctions, legal issues and financial hardships, Musk found a lifeline in China, which facilitated the construction of large factories for the brand that allowed it to scale.
One of the most notable of those was the Gigafactory in Shanghai. Several capitulations from the Chinese government — mostly centered on leniency with national emission regulations — aided the construction of the facility.
However, as these loosened regulations helped Tesla, they also opened the door for other EV brands such as BYD to follow suit and grow at lightning speed. Now Musk is seeing the effects of this in the form of increased competition.
Tesla has both reasons to be anxious and reasons to feel confident. Yes, according to Forbes, BYD did surpass Tesla in sales late in 2023. But that was only by a small margin, and the latest data suggests that Tesla sales could take back the company’s top-selling EV title in 2024.
In 2023, BYD posted revenue of approximately $83 billion, while Tesla came in at $96 billion.
Both brands are looking to grow sales in Europe. Tesla has the upper hand, but BYD has announced plans to increase sales in Europe to 800,000 cars by 2030, and that would make the Chinese upstart a top-three selling car brand by 2023 numbers.
The next five to 10 years will be extremely important for the Austin-based company as competition increases. Some signs are already indicating that the road ahead could be rough. Earlier this month, declining EV sales prompted Tesla to lay off more than 10% of its global workforce.