China’s BYD saw a 21% increase in second-quarter electric vehicle (EV) sales, narrowing the gap with Tesla.
The Warren Buffett-backed company said late Monday that it sold 341,658 vehicles during June, compared with 331,817 a month earlier and 253,046 in June 2023.
BYD vs Tesla
BYD sold a total of 426,039 EVs from April to June, just 12,000 vehicles shy of Tesla’s estimated deliveries for the same period.
Tesla is expected to report a 6% decline in vehicle deliveries for the April-June quarter on Tuesday. This marks the first time the U.S. firm could see two consecutive quarters of declining deliveries.
Tesla faces tough competition in China and slow demand due to a lack of new affordable models.
After years of rapid growth, Tesla has hit a speed bump. In January, Tesla warned that its delivery growth in 2024 would be “notably lower” as the effects of prolonged price cuts diminish.
Meanwhile, BYD continued its steady growth in EV sales, while other Chinese EV makers, like Nio, also reported significant gains.
Experts believe price cuts and a shift in consumer preference from gasoline-powered vehicles to EVs and hybrids are driving strong sales for Chinese EV makers.
In May, new energy vehicles, including EVs and plug-in hybrids, accounted for 46.7% of total car sales in China, reaching a new monthly high, according to CPCA data.
BYD in spotlight with Euro 2024 sponsorship
Of late, BYD garnered a lot of attention as it was the only carmaker sponsoring the Euro 2024 tournament.
BYD is competing with Elon Musk’s Tesla to be the world’s largest electric carmaker, with Europe as a key export market. However, BYD faces challenges as the EU considers imposing tariffs on its products.
Warren Buffett’s company started investing in Shenzhen-based BYD in 2008, purchasing approximately 225 million shares for $230 million, which was about a 10% stake at the time.
They began disclosing sales in August 2022, following a more than 20-fold increase in BYD’s share price, and two months after it reached a record high.
The EU has pointed to alleged unfair subsidies for BYD, Geely, and state-owned SAIC Motor. If confirmed after negotiations with China, BYD could face tariffs of 17.4%, aimed at protecting the European car industry and its 3 million workers.
Despite this, many experts believe tariffs alone won’t slow BYD’s progress in Europe’s car market.
For BYD’s founder, Wang Chuanfu, tariffs from the US and the EU signify the growing strength of China’s car industry.
Wang studied metallurgy in Hunan province before founding BYD as a battery company in 1995. He initially secured Motorola and Nokia as customers, then acquired a bankrupt car factory in 2003 to produce hybrids.
Since then, Wang has grown BYD into the world’s second-largest battery maker, behind only Chinese rival CATL, and the world’s second-largest electric car maker, briefly surpassing Tesla at the end of 2023.
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