Tesla delivered 484,507 electric vehicles in the October-December period, fewer than BYD's 526,409 vehicles, sold mainly in China. But Elon Musk has nothing to be ashamed of, with more than 1.81 million vehicles sold over the year as a whole: his company will remain world leader in 2023. As for the Chinese company, it delivered a total of 3.02 million vehicles, including around 1.4 million plug-in hybrid electric vehicles.
BYD's soaring sales (+73% year-on-year) testify to the effectiveness of its price-cutting strategy. In 2023, the Chinese group followed Tesla's lead in the battle for market share. According to Susannah Streeter, Head of Money and Markets at Hargreaves Lansdown. "The fight will hurt margins for both companies, but BYD clearly believes this is a price worth paying to increase market share and recognition."
Tesla is also under fire from the regulatory authorities. The company was forced to recall over 2 million vehicles last month to incorporate new safety measures into its advanced driver assistance system, Autopilot, following concerns expressed by the US Federal Safety Agency.
And the problems continue. Earlier this year, Elon Musk's company was forced to recall 1.6 million vehicles in China, its biggest market, to rectify software errors.
On the other side of the Pacific, the Chinese government is partly behind BYD's success. According to Rhodium Group, it has received over $4.3 billion in public support between 2015 and 2020, through subsidies and incentives for the purchase of electric cars.
A final factor to consider is that BYD is not only a competitor to Tesla, but also a crucial ally. Indeed, it is the world's second largest lithium-ion battery manufacturer, and the American company's supplier.
BYD's rise illustrates that nothing is set in stone in the automotive industry. Established players must remain vigilant to the arrival of new competitors determined to shake up the established order. The electric era is reshuffling the deck and promises an exciting race for market dominance.
Design by Amandine Victor