Will BYD overtake Tesla in electric cars?

In the global competition for electric cars, Tesla's lead is undermined by BYD's growth: the Chinese company is improving both in sales volume and in profit per vehicle sold. All the details

In 2022, the Chinese company BYD surpassed the US Tesla in terms of the number of electric vehicles sold, but counting both pure electric and plug-in hybrid models. Elon Musk's company is still at the top of the list when it comes to full-electric cars, but the one with BYD is a neck-to-head race. In the third quarter of 2023 – the one that ended in September – BYD sold around 431,000 pure electric cars, only a few thousand less than Tesla's 435,000 units.

BYD SHORTENS THE GAP IN PROFIT PER VEHICLE SOLD…

As Quartz explains, BYD is not only catching Tesla in sales volume, but is also closing the gap in profit per vehicle sold.

In the third quarter of this year BYD sold over two million "new energy vehicles", a term that encompasses all types of cars not powered by fossil fuels (so full-electric and plug-in hybrid models, essentially) . On average, the company reported a profit of 10,300 yuan, or $1,730, for each vehicle sold. In the third quarter of 2022 this value was much lower: around 1470 dollars.

While BYD's profit margin is growing, Tesla's is decreasing: in the third quarter of 2023, Musk's company reported a profit of $4,260 for each car sold, compared to over $9,500 a year earlier.

… BUT TESLA'S PROFIT REMAINS MUCH BIGGER

However, Tesla's profit per unit sold remains significantly larger than that of BYD and other automakers. And – as Quartz points out – these large margins have allowed the US company to start a price war in the electric vehicle sector, cutting the selling prices of its models to gain international market shares to the detriment of the competition.

BYD MAKES RECORD PROFITS IN THE THIRD QUARTER OF 2023

BYD's economic position is strengthening, though. It reported a record profit of 10.4 billion yuan ($1.4 billion) in the third quarter of 2023, up 82.2 percent year-on-year. Furthermore, the company is working on vertical integration, concentrating internal activities for the extraction of critical minerals and the production of batteries, the most important and expensive component of electric vehicles.

This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/smartcity/competizione-auto-elettriche-byd-tesla/ on Sun, 05 Nov 2023 06:57:12 +0000.