Chinese automaker BYD has drawn threateningly close to Tesla Inc. (NASDAQ: TSLA) in sales and is poised to steal the Texas-based carmaker’s spot as the world’s top electric vehicle maker. Thanks to a drop in Tesla deliveries over the third quarter of the year, BYD is approximately 3,000 electric cars shy of surpassing Tesla in sales.
The Warren Buffet-backed Chinese company has been on a roll in China, the largest electric vehicle market on the globe, and has spent the past couple of months pushing Tesla to the ropes. BYD delivered 431,000 battery electric vehicles (BEVs) in Q3 2023 while Tesla sold 435,000 BEVs, Bloomberg reports, putting BYD on track to surpass Tesla in sales by the end of the year.
When BYD’s hybrid sales are included, its total sales for the last quarter nearly double Tesla’s sales in the same period at more than 800,000 cars. The Chinese carmaker delivered 1.8 million vehicles in 2022, including 911,000 battery electric cars, compared to Tesla, which sold 1.3 million battery-powered electric cars. Although Tesla is still ahead in terms of pure electric vehicle sales, BYD is catching up.
Tesla’s BEV sales in the third quarter of the year dropped by 6.7%, the company’s first decline in sales since 2020. Tesla CEO Elon Musk previously noted that the company would likely continue with its price cuts if interest rates kept rising and warned of smaller profits in the near future as the company invested in projects such as the cybertruck and in-house supercomputer Dojo.
Musk said Tesla will invest at least $1 billion in projects by the end of 2024 and called the lower profits speed bumps as Tesla grows. As the Texas-based automaker plans to build 1.8 million electric cars this year, it will have to sell an extra 450,000 cars in Q4 2023 to meet its yearly production goals. However, limited demand and competition from Chinese automakers such as BYD have drawn Tesla into an ongoing price war that has even attracted the attention of Chinese authorities.
Unlike Tesla, which mostly focuses on luxury electric cars, BYD has garnered significant demand by producing affordable electric cars in China, granting it access to a larger swathe of the market. BYD has also expanded to foreign markets outside China and is now the best-selling electric vehicle brand in nations such as Singapore, Israel and Thailand. The Berkshire-Hathaway-backed company is now expanding into developed markets in Europe as well as Japan.
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