In 1995, Wang Chuanfu founded BYD, a Chinese company focused on producing rechargeable batteries more cheaply than Japanese competitors. Over the years, BYD has grown to become the world’s leading manufacturer of electric vehicles, even surpassing Tesla in global sales of electric cars in the last quarter of 2023. However, the competition remains close, with Tesla regaining its lead in the first quarter of 2024. Tesla’s market capitalization of about $560 billion makes it the most valuable car company in the world, while BYD ranks among the top 10 automakers with an $81 billion market cap.
Despite trailing behind Tesla, BYD has already surpassed BMW and Ford and is catching up to Mercedes-Benz and Ferrari. In 2023, Tesla sold around 230,000 more cars than BYD, but the gap has been narrowing from previous years. In the last quarter of 2023, BYD sold more battery electric vehicles globally than Tesla, due in part to a slowdown in demand for EVs and Tesla’s performance in China. However, BYD stumbled in early 2024, selling fewer BEVs than Tesla, allowing the American company to retake its top position in this segment.
BYD’s rise to the top of EV charts has been propelled by its competitive pricing compared to Tesla’s pricier cars. The Chinese company recently launched a new version of one of its best-selling models, the Yuan Plus crossover, and slashed prices on its models, making them more affordable to consumers. Tesla also cut prices on some models in China, but its cars remain more expensive than BYD’s offerings. Both companies are facing heated competition in the world’s largest car market as they vie for market share and dominance.
China is Tesla’s second-largest market after the United States, accounting for 33% of global sales in 2023. The company’s Shanghai Gigafactory, its main export hub, delivered 947,000 cars last year. In contrast, BYD does not sell cars in the United States, but it does have a bus manufacturing plant in California. Both Tesla and BYD are expanding beyond their home markets and investing in factories abroad to increase their global presence and production.
In 2023, the global market for EVs saw significant growth, with 13.6 million units sold worldwide, an increase of over 30% from the previous year. The Chinese market experienced similar growth, with 7.9 million units sold. BYD sold about 3 million electric cars globally in 2023, with 1.6 million of them being battery electric vehicles. In comparison, Tesla, which does not sell hybrids, delivered a total of 1.8 million vehicles worldwide in 2023, making up about 19% of the global market for BEVs. Both Tesla and BYD are facing stock price declines in 2024, reflecting the challenges and competition in the EV market.
