Tesla - BYD war in the electric car "arena"

BYD surpasses Tesla

The Wall Street Journal cited the business results recently announced by BYD Group (China), the company sold 526,000 pure electric vehicles (BEV) in the fourth quarter of 2023. Meanwhile, Tesla's figure only reached 485,000 BEVs in the same period.

Tesla plans to launch a low-cost electric car to compete

However, for the whole of 2023, BYD's sales will be around 1.6 million BEVs, which is still lower than Tesla's 1.81 million. However, while Tesla only produces BEVs, BYD also produces plug-in hybrids (internal combustion engines integrated with electric motors) that can be charged (PHEVs). If we count PHEVs and BEVs (both called electric vehicles - EVs), BYD's sales will be around 3 million, so it will continue to lead the global electric vehicle industry in sales.

In 2022, BYD will sell about 900,000 BEVs and 900,000 PHEVs, while Tesla will sell 1.3 million vehicles. Thus, BYD's 2023 sales (including EVs including PHEVs and BEVs) will increase by about 66% compared to 2022, while BEV sales alone will increase by 77%. Meanwhile, Tesla's growth rate is only about 40% in the same period.

According to Clean Technica , the global electric vehicle industry is showing signs of improvement after the gloomy period of the third quarter of 2023. Specifically, in November 2023, the number of EVs sold globally reached 1.385 million vehicles, accounting for 19% of the number of new vehicles sold. If counting BEVs alone, the rate is 13%. Accordingly, the number of BEVs achieved a growth rate of 25% compared to November 2022, accounting for 69% of the total number of EVs sold. PHEVs also achieved impressive growth of 40% compared to November 2022.

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Tesla's "weapon"

Amidst the context of being surpassed by BYD in the fourth quarter of 2023, Tesla recently revealed that it is about to launch a new, highly competitive car model. Specifically, according to The Wall Street Journal, Tesla will launch a more affordable car model thanks to the halving of production costs. This is a landmark move for Tesla, because Tesla's most recent car model sold, the Cybertruck in 2023, is also the only new car model that the company has delivered to customers within 3 years.

The low-price "weapon" has been used quite effectively by Tesla. In early 2023, in the context of intense competition with Chinese car manufacturers, Tesla launched a deep discount campaign, especially in the mainland market. Specifically, since January 2023, in the Chinese market, Tesla has reduced the prices of Model 3 and Model Y cars by 6 - 13.5%. In fact, the selling prices of many Tesla car models in China are much cheaper than in the US market.

Tesla's price-cutting strategy has forced other companies to lower their prices to compete. About 40 Chinese automakers have reduced prices for both electric and internal combustion engine vehicles. BYD has also reduced prices by an average of about 10%. According to The New York Times, in March alone, the price of the ID.3 electric car, a joint venture between Volkswagen and a Chinese partner, had to be reduced by up to 18%. As a result of the price-cutting strategy, Tesla's global revenue in the first quarter of 2023 reached $23.3 billion, up about 24% compared to the same period in 2022. Even if BYD surpasses Tesla in the fourth quarter of 2023, Tesla will still account for 12% of China's EV market share in 2023, up from 11% in 2022.

Meanwhile, while Tesla has a factory in China, Chinese automakers are having difficulty expanding their markets to Europe and the US for many reasons. Notably, there is a shortage of shipping fleets as many companies dismantled their ships in 2020 due to the Covid-19 pandemic and the general decline of the global auto industry. It is expected to take another 3 years to restore the transoceanic car shipping fleet. In addition, some barriers from the European market are also a big challenge.

US car sales surge

The Wall Street Journal reports that the U.S. auto industry is set to rebound in 2023, with many automakers reporting double-digit sales gains. Industry-wide new car sales in the U.S. are expected to reach 15.5 million in 2023, up 12.4% from the previous year, according to estimates from market research firm Wards Intelligence.

Among automakers reporting recent sales figures, General Motors said it will sell 2.6 million vehicles in the United States in 2023, retaining its position as the largest seller in the country. Those sales were up 14% from the previous year. Also in the United States in 2023, Toyota's sales rose nearly 7% in 2023 to about 2.3 million, driven largely by plug-in hybrids, while Honda posted a 33% increase. Most automakers saw sales increase. Stellantis, the parent company of Chrysler, Jeep, and Ram, saw its sales decline 1% in 2023.

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