China auto giant BYD sells more EVs than ever
SEOUL, SOUTH KOREA >> The Chinese corporate giant BYD said Monday that it sold 3 million battery-powered cars in 2023, its most ever, capping a turbulent year for China's electric vehicle industry.
Even as sales surged, heavy competition and a sustained price war took a financial toll on many automakers.
But BYD last year sold 1.6 million fully electric vehicles and another 1.4 million hybrids, which are powered by both batteries and gasoline. Together that is a 62% increase over 2022. BYD is also making money, tripling its profit to $1.5 billion in the first half of last year.
All told, Chinese automakers are expected to have sold about 9.4 million electric vehicles and hybrids last year, an increase from 6.9 million in 2022, according to the China Association of Automobile Manufacturers. The group said it expected sales in 2024 to rise again, to 11.5 million.
Already the world's largest automobile market, China is now also its fastest growing, racing ahead in the electric vehicle transition that is upending the global industry. China rules the supply chain for battery-powered cars — from the mining and processing of cobalt and other minerals used in batteries, to the deployment of robots in factories that make cars and trucks. China's electric vehicle companies and their suppliers employ some 1.5 million people.
A big reason for China's early lead in electric vehicles was the government's heavy financial support for the industry's development. After financial incentives for consumers expired at the end of 2022, automakers slashed car prices
to lure buyers. Many companies including BYD introduced another round of cuts last fall, intensifying the price war.
In November, BYD advertised discounts on five models of up to $2,550. Another Chinese electric vehicle company, Ji Yue, a partnership of Geely and Baidu, slashed the price of all versions of its first model by $4,200 in November.
Last year's price cutting was started by Tesla, the American automaker that has a factory in Shanghai. In January 2023 it lowered prices in China for the second time in three months, and others followed.
Tesla is expected this week to report a big jump in its worldwide sales after slashing prices at the end of last year, and as customers took advantage of U.S. tax breaks. Founded in 2003, Tesla is on a path to sell about 1.8 million battery powered vehicles for the year, up from 1.3 million in 2022. It makes about half of all electric vehicles sold in the United States.
As Tesla and BYD rival for the spot as the world's most prolific maker of fully electric vehicles, both companies face increasing competition from legacy automakers that are spending billions of dollars to catch up.
“I think an industry shakeout is an inevitable trend,” said Cui Dongshu, the secretary-general of the China Passenger Car Association, which represents the country's domestic industry. “But it's still uncertain who will seize the future leading position in the long term.”
As fast as China's electric vehicle sales are rising, companies are pouring money into factories and research, often fueled by loans from state-owned banks and assistance from municipalities. Nio, a top selling Chinese EV brand, said in November that it laid off 10% of its employees.
During the last year, Tesla has lost market share to rivals such as General Motors, Hyundai, Ford Motor Co. and Volkswagen as they introduced more electric vehicles.
BYD, which faces prohibitively high tariffs in the U.S. market, sells most of its cars in China but is expanding globally, particularly in Europe.