Tesla & BYD in Quest of 2024 Leadership

Tesla & BYD in Quest of 2024 Leadership

BYD Seal Tesla

As we head into 2024, the electric vehicle (EV) industry is witnessing an intensifying rivalry between two heavyweights — U.S.-based Tesla TSLA and China’s BYD Co Ltd BYDDY. The fourth quarter of 2023 marked a pivotal moment as Tesla’s longstanding dominance in global EV sales was surpassed for the first time by BYD, propelled by its extensive range of more affordable models in China. Nonetheless, Tesla maintained the lead for full-year 2023, both in terms of production and deliveries. This sets the stage for a gripping contest in 2024, with both companies vying for the title of the global EV leader.



BYDDY Dethrones TSLA in Q4

Tesla’s crown as the world’s top EV seller was taken away by its Chinese rival BYD for the first time in the fourth quarter of 2024. While Tesla reported record deliveries for the quarter ended December and also beat Street estimates, the numbers fell short of BYD’s deliveries.

TSLA delivered 484,507 EVs (comprising 461,538 Model 3/Y and 22,969 other models) in the quarter under discussion, up 19.5% and 11.4% on a yearly and sequential basis, respectively.  Meanwhile, Warren Buffett-backed BYD delivered 526,409 EVs during the same time period, up 22% sequentially.

For the full year though, Tesla retained its title as the top EV seller with 1,808,581 deliveries (up 38% year over year). In 2023, BYD sold more than 3 million new energy vehicles but of that only 1.6 million units were pure EVs.



As for the production numbers, Tesla built 1,845,985 EVs (comprising 1,775,159 Model 3/Y and 70,826 other models), up 35% year over year. Meanwhile, BYD produced more than 3 million vehicles, but that included around 1.6 million pure EVs, while the rest were hybrids. So, in terms of battery-only EV production in 2023, Tesla still tops the chart.

Given BYD’s ascendancy and Tesla’s enduring influence,industry observers will keenly monitor the competition to determine who will secure the coveted electric vehicle crown in 2024.

BYD’s Race to EV Glory

BYD’s triumph in the fourth quarter of 2023 is a testament to the company’s transformation from a relatively unknown player a decade ago to a global contender. Tesla’s CEO Musk himself had dismissed BYD publicly but the recent turn of events suggests that the China-based company is now a force to be reckoned with.

While Musk has voiced concerns about the affordability of Tesla EVs, particularly in the face of high-interest rates, BYD’s founder, Wang Chuanfu, has adopted an offensive approach. BYD boasts a lineup of half a dozen higher-volume models, all priced significantly lower than Tesla’s cheapest Model 3 sedan in China.



Rising demand for EVs in China and the attractive discounts offered by BYD to domestic buyers are boosting the automaker’s sales. In contrast to Tesla’s premium EV models, priced at a starting point of 259,900 yuan in the mainland market, BYD is known for its more affordable cars, typically priced around 100,000 yuan. This pricing strategy has played a crucial role in BYD’s appeal, especially in a market where two out of every five vehicles sold are electric.

One key factor contributing to BYD’s success is its keen focus on cost-effective production. BYD has consistently worked on minimizing costs throughout its production process. Beijing’s careful industrial planning and state support have allowed China-based automakers, including BYD, to leverage control over the production of essential resources, materials, and components for electric vehicles.

BYD holds a significant edge over its American and European counterparts due to its in-house manufacturing capability for electric vehicle batteries. Its vertically integrated structure, encompassing control over mines, battery production and chip manufacturing, has become the envy of foreign rivals. This integrated approach positions BYD favorably as the global automotive industry shifts gears to electric mobility.

Its increasing focus on overseas markets, including Europe, aligns with this strategic vision. It is undertaking robust global expansion and amplifying its EV and battery production capabilities. The company is set to launch an EV factory in Thailand by mid-2024 and has announced plans for EV production in Brazil. In December, BYD disclosed its intent to establish a production center in Hungary, emphasizing its commitment to the European market. The Chinese EV giant already sells five models in Europe and plans to introduce three additional models within the next 12 months.

BYD’s international presence extends across Asia, Europe and Latin America, with significant inroads in markets such as Japan, India, Malaysia, Australia, Singapore, Israel and Europe. The company’s diverse EV lineup, including models like the Seagull, Denza, and Yangwang brands, has contributed to its global success. Notably, BYD strategically sells EVs overseas at higher prices than in the domestic market, bolstering profit margins.

UBS forecasts that China-made cars will control 33% of the global market by 2030, up from 17% in 2022, owing to the faster pace of electrification in China, the world’s largest automotive and EV market. In a September report, UBS highlighted BYD’s production advantage over Tesla’s Model 3 in China, with the cost of building BYD’s Seal sedan being 15% lower. Seal’s sustainable cost advantage in Europe, even with growing trade barriers, positions BYD as a formidable player in the global EV market.

Investors await further insights as Tesla is scheduled to report its fourth-quarter results on Jan 24, providing official guidance for the anticipated delivery figures in 2024.

Last Word

The year 2024 promises a compelling showdown between Tesla and BYD, both contending for the coveted title of the world’s top seller. Many expect BYD to emerge as the winner, buoyed by its broad lineup of cost-effective models and strategic global expansion efforts, potentially eclipsing Tesla’s supremacy. Amid this clash, both Tesla and BYD will face increased competition from traditional automakers, who are pouring billions to catch up in the rapidly advancing EV space.

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