Will BYD Overtake Tesla in the Electric Vehicle Market?

Tesla CEO Elon Musk recently said that the company's closest competitor might be Chinese electric car maker BYD.

After four years as the world's best-selling electric car maker from 2018 to 2021, Tesla lost its lead in 2022. In recent years, more and more electric models have emerged recently, and Tesla's market share has been steadily eroded; it fell from 17% in 2019 to 13% now and is expected to stabilize at around 10%.

In 2022, BYD delivered 18.6 million electric vehicles, including 913,052 battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs). Most of BYD's sales come from its home market in China, where exports account for less than 2% of sales. However, BYD plans to promote overseas markets vigorously in 2023, with exports also likely to increase. As a result, BYD may also overtake Tesla in BEV sales this year.

BEV+PHEV Sales

Will BYD Overtake Tesla in the Electric Vehicle Market?

BEV Sales

Will BYD Overtake Tesla in the Electric Vehicle Market?

Here are some reasons why BYD's sales will be so high in 2022:

BYD's biggest advantage is that it is the only electric car maker with a vertically integrated business model. This means it has its lithium mines, semiconductor production, especially batteries (the most expensive individual component in an EV), and a broad product offering.

BYD focuses more on the Chinese market, whereas China is undeniably the world's largest automobile consumer market, with a huge consumer group. BYD satisfies the needs of many Chinese users for "electric vehicles" through different positioning and designs, thus promoting an increase in total sales.

BYD's market positioning is different from Tesla's. BYD sells cars at a lower price than Tesla and thus has a wider customer base.

Tesla ranked second in worldwide electric vehicle sales in 2022, with 1,314,330 cars sold globally. However, Tesla is still number one worldwide regarding pure electric car sales. Therefore, in terms of revenue from electric cars, Tesla is the rightful juggernaut.

In addition, in most consumers' eyes, Tesla has a much higher brand height than BYD. Meanwhile, it has sales channels worldwide and continues to achieve outstanding sales performance and a good reputation in all overseas markets.

Overall, BYD won the competition in terms of total sales (units).

Tesla wants to reclaim the title of best-selling electric car maker; Tesla must launch a diverse product lineup and introduce a cheaper compact electric car suitable for more consumer groups.

In the end, both of these electric vehicle manufacturers have their strengths and advantages. However, consumers still need to make choices based on their needs. This is because the two brands of electric vehicles target different groups of customers, although there is some overlap in the market.