Chinese new energy vehicle (NEV) maker BYD successfully grew from a mobile phone battery maker to an electric vehicle giant, even beating the industry leader Tesla.
In hindsight, BYD surpassed Tesla’s battery-electric vehicle sales of 484,507 with its 526,409 units record in the fourth quarter of 2023. The Chinese company now aims to maintain this momentum this year and beyond.
BYD consistently tops monthly sales rankings
As CNBC reported, Tesla has been falling behind local rivals offering low-cost electric vehicle models in the Chinese market, particularly BYD.
“BYD has grown into this powerhouse in the new energy vehicle industry. When you look at the monthly rankings, they’re always at the top.”
CNBC’s Beijing correspondent Evelyn Cheng
For context, BYD started as a mobile phone battery company when Wang Chuanfu founded it in the 1990s. It shifted to carmaking in 2003, advancing as the leading brand in China. In addition, BYD has also become a major electric vehicle battery maker.
Lithium-iron phosphate battery production
One of the advantages of BYD that helped it grow as an electric vehicle juggernaut is its capability to make its own lithium-iron phosphate batteries, a less expensive alternative to li-ion batteries.
“They are one of the top companies in the world building lithium-iron phosphate batteries.”
Sam Abuelsamid, Guidehouse Insights Principal Analyst
Analyst Abuelsamid further noted that LFP batteries have longer life cycles and cost “about 30-40% less per kilowatt hour to manufacture.”
With the significant aid of government subsidies for its battery manufacturing, BYD managed to produce electric vehicles with almost the same affordability as gas-powered vehicles. Not even the Musk-led company had been able to do this.
Low-cost price
BYD’s use of cheaper LFP batteries enabled it to offer mass-market electric vehicle models. Most of its offerings undercut the competition as some models have a base price of just below $20,000.
“In Munich just a few months ago, they launch the Seagull, priced at $11,500. You have to double that price and then some to get an entry-level vehicle here in the United States and in Europe. So very competitive in the segment of $35,000 and under.”
Michael Dunne, CEO of Dunne Insights
BYD, along with other Chinese automakers, has successfully cracked the code to make electric cars affordable. According to UBS, BYD produces EVs that are 25% cheaper than European rivals. Its EV offerings are also apparently 15% more affordable than Tesla’s.
That said, it is unsurprising that BYD has continuously advanced as a major player not only on its home turf but also in the global market.
As mentioned, BYD aims to solidify its market presence further with its aggressive expansion strategy. Impressively, it exported more than 240,000 EVs across 70 countries in 2023. It also announced plans to establish a European factory in Hungary and is reportedly searching for a potential factory location in Mexico.
As of now, BYD has no plans to penetrate the US market. However, it would be unsurprising if the company would soon change its plans, considering its growth prospect on Tesla’s home turf.
