China's BYD sells more electric cars than Tesla

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BYD's ATTO 3 model was showcased on September 4, 2023 in Munich, Germany

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BYD will overtake Tesla to become the world's largest electric car company in the final quarter of 2023.

Chinese company It sold a record number of cars last year, including 525,409 battery electric vehicles (BEVs), in the three months to December 31, a stock exchange filing said. Tesla delivered 484,507 — a record — in the quarter on Tuesday.

Throughout the year Elon Musk's Tesla (D.S.L.A) still surpasses BYD by selling 1.8 million electric cars. BYD sold 1.57 million electric vehicles, up 73% in 2022, and 1.44 million hybrids.

But Tesla's gap to its Chinese rival, which is about 230,000 units in 2023, is significantly less than the 400,000 units released in 2022.

BYD's rapid growth, this is supported Warren Buffett is an icon China's growing EV industry.

China is developing rapidly Its transition to electric vehicles is thanks to strong government support for the industry. And its carmakers are pushing into Europe to the alarm of traditional rivals Volkswagen and Renault. EU policymakers have begun Investigation into Chinese government subsidies.

Beijing has set a target for at least 20% of new cars sold annually in China to be new energy vehicles (NEVs) by 2025, including BEVs, plug-in hybrids and hydrogen fuel cell vehicles. By 2035, Government saysNEVs should become the “mainstream” of new car sales.

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The first target was reached in 2022, almost three years early. The second may arrive earlier than expected.

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BYD cars wait to be loaded onto a ship at an international container terminal in Suzhou port, east China's Jiangsu province, on September 11, 2023.

In the first 11 months of 2023, 8.3 million units of new energy vehicles were sold, accounting for more than 30% of total car sales, according to data released last month by the China Association of Automobile Manufacturers.

Miao Wei, former minister of China's Ministry of Industry and Information Technology, Said at a car forum in November The government's NEV penetration target of 50% by 2035 may be reached by 2025 or 2026 at the latest, according to state media.

According to analysts, China's major role in the global industry is also thanks to its market size, cheap labor and supply chain dominance.

“China is now the manufacturing leader and increasing its relative margins, banking on its massive domestic market and first-mover advantage,” analysts at French investment bank Natixis Asia wrote in a report in late November.

Its first-mover advantage and government support through infrastructure investment and subsidies have made it easier for Chinese EV makers to expand domestically and internationally, they said.

However, intensified competition and a brutal price war last year have impacted many carmakers' profit margins.

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An aerial view of Tesla's Gigafactory in Shanghai, China on March 29, 2021

As China's economy loses momentum, automakers worry about a slowdown in demand. In January, Tesla slashed prices to attract customers in China, slowing growth and sparking a price war. Dozens of automakers followed suit to stay competitive.

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A price war has boosted sales, but threatens industry-wide profitability. In the first 11 months of last year, the profit margin of China's auto industry was just 5%, down from 5.7% in 2022 and 6.1% in 2021, according to figures released by the China Passenger Car Association, a government-backed industry group.

To make up for the slowdown in the domestic market, Chinese car makers are there Seeking development outside the territory By expanding into Europe, Australia and Southeast Asia.

BYD sent a large team to the auto show in Germany last September. The spokeswoman said it aims to double the number of dealer partners in Europe by 2023 and increase overseas sales from 56,000 to 250,000 by 2022.

Last month, it announced the construction of an EV factory in Hungary, which would be its first passenger car plant in Europe. It is There is already a bus factory in Komárom, Hungary.

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