Intense Competition with Tesla: BYD Sets Record in Electric Vehicle Sales for 2024
Chinese electric vehicle manufacturer BYD has taken significant steps in its competition with Tesla (TSLA) by achieving a total of 1.76 million electric vehicle (EV) sales in 2024. The company set a monthly sales record in December by selling 207,734 electric vehicles, reaching a total of 4.25 million passenger vehicle sales. This success has been supported by government incentives and customer promotions.
BYD's sales growth is largely attributed to the expansion in the domestic Chinese market. In a period where intense competition has driven prices down and the government has encouraged the replacement of older vehicles with more efficient electric models, BYD generated 90% of its sales in China. Demand for the company's hybrid vehicles significantly contributed to the overall sales growth.
Increased Competition with Tesla In the third quarter of 2024, BYD increased its revenue to 200 billion yuan, surpassing Tesla. During this period, BYD's revenues grew by 24% year-on-year, while Tesla’s revenues remained at $25.2 billion. However, Tesla continues to maintain its lead in electric vehicle sales.
Despite Tesla's advantage, BYD rapidly closed the gap with its growth in 2024. The company’s leadership in the Chinese market particularly enhanced its competitive power against foreign brands.
Global Market Challenges Although BYD and other Chinese electric vehicle manufacturers have been making efforts to boost their overseas sales, they have encountered various obstacles in major markets. In October, the European Union began imposing tariffs of up to 45.3% on Chinese-made electric vehicles. Similarly, the U.S. has implemented a 100% tariff on electric vehicles imported from China, with new trade restrictions expected.
Despite these challenges, BYD continues to expand its presence in developing economies. However, construction of a factory in Brazil, its largest overseas market, was halted last month due to allegations that workers were operating under "slave-like" conditions. The company announced it has severed ties with the construction firm and will continue to fully comply with Brazilian laws.
Restructuring in the Automotive Industry The rise of Chinese electric vehicle manufacturers has put pressure on traditional automotive brands. Honda and Nissan have announced that they are initiating merger talks to combine forces against Chinese competitors. In Germany, Volkswagen reached an agreement with a labor union to prevent factory closures in the country.
During this process, Stellantis CEO Carlos Tavares resigned due to disagreements on the board, following the company's profit warning issued two months earlier.
Intensifying Competition for 2025 BYD's strong performance in 2024 marked a year where it took its competition with Tesla to a global level. However, trade restrictions faced in global markets and increasing competition indicate that 2025 will pose a more challenging year for electric vehicle manufacturers. BYD's success in hybrid vehicles and its leadership in the local market will play a crucial role in overcoming these challenges.