BYD: Chinese automaker overtakes Tesla to become world leader in EV sales

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CNN
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China’s BYD sold a record number of cars in 2023, moving closer to supplanting Tesla as the world market leader in electric vehicles.

Chinese companies saw a slight increase in global sales, up 62% According to stock exchange filings, there were 3 million more units sold last year compared to 2022.

BYD sold 1.57 million battery electric vehicles (BEVs) last year, an increase of 73%, and also sold 1.44 million hybrid vehicles. 52% increase compared to the previous year.

Tesla (TSLA) is expected to release full-year sales results as early as Tuesday. Analysts expect the U.S. EV maker to nearly meet its annual BEV delivery goal of 1.8 million units. Hybrids are not sold.

In 2022, BYD lost about 400,000 units to Tesla in global BEV sales. The gap is expected to have narrowed last year. And in the most recent quarter, BYD may have already overtaken Elon Musk’s company.

In the fourth quarter, BYD sold 526,409 BEVs, an increase of more than 20% from the third quarter.tesla It is likely that it was delivered Sales rose to 473,000 units in the quarter, according to a survey of 14 analysts cited by Reuters.

The rapid growth of Warren Buffett-backed BYD is a symbol of the rise of China’s EV industry.

China is progressing rapidly The transition to electric vehicles is underway, thanks to strong government support for the industry.

The Chinese government has set a goal for at least 20% of new cars sold annually to be new energy vehicles (NEVs), including BEVs, plug-in hybrids and hydrogen fuel cell vehicles, by 2025. The government says NEVs should become “mainstream” in new car sales by 2035.

The first goal was achieved in 2022, about three years early. The second time may also arrive sooner than expected.

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

According to state media, former Minister of Industry and Information Technology Miao Wei said at an automobile forum in November that the government’s goal of 50% NEV penetration by 2035 could be achieved by 2025 or 2026 at the latest. He said it was highly sexual.

Analysts say China’s leading role in global industry is also due to its market size, cheap labor and supply chain advantages.

“China currently leads in production and is leveraging its huge domestic market and first-mover advantage to increase its comparative advantage,” analysts at French investment bank Natixis Asia said in a report at the end of November. .

First-mover advantages and government support through infrastructure investment and subsidies have made it easier for Chinese EV makers to expand domestically and internationally.

However, increased competition and fierce price wars last year affected many automakers’ profit margins.

Automakers were worried about a slowdown in demand as China’s economy lost momentum. In January, Tesla cut prices in China in a bid to attract customers and stem slowing growth, triggering a price war. Dozens of automakers followed suit to stay competitive.

Although price competition increased sales, it threatened the industry’s overall profitability. China’s auto industry recorded a profit margin of just 5% in the first 11 months of last year, 5.7% in 2022 and 5.7% in 2021, according to figures released last week by the China Passenger Car Association, a government-backed industry group. It fell below 6.1%. .

To offset the slowdown in the domestic market, Chinese automakers are seeking growth outside the mainland by expanding into Europe, Australia and Southeast Asia.

Last month, BYD announced that it would build an EV plant in Hungary, its first passenger car plant in Europe.that We already have a bus factory in Komárom, Hungary.