Chinese company BYD sells more electric cars than Tesla

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BYD overtook Tesla to become the world's largest electric vehicle company in the fourth quarter of 2023.

The Chinese company sold a record number of cars last year, including 525,409 battery electric vehicles in the three-month period through Dec. 31, according to an exchange filing. Tesla said Tuesday that it delivered 484,507 — also a record — during the quarter.

Over the full year, Elon Musk's Tesla ( TSLA ) still outpaces BYD, selling 1.8 million electric vehicles. BYD sold 1.57 million electric cars, an increase of 73% from 2022, in addition to 1.44 million hybrid cars.

But this means that Tesla's gap over its Chinese competitor, of about 230,000 units in 2023, was much less than the 400,000 units announced in 2022.

BYD's rapid growth, backed by Warren Buffett, is a symbol of China's rising electric vehicle industry.

China is advancing rapidly Its transition to electric cars, thanks to strong government support for the industry. Chinese automakers have been turning to Europe to worry traditional competitors such as… Volkswagen and Renault. European Union decision-makers have launched an initiative Investigation into Chinese government support.

Beijing has set a goal that at least 20% of new cars sold annually in China by 2025 must be new energy vehicles (NEVs), which includes electric cars, hybrids, and hydrogen fuel cell vehicles. By 2035, The government saysNew energy vehicles should become the “mainstream” of new car sales.

The first goal was achieved in 2022, about three years ago. The second could also be reached earlier than expected.

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

Miao Wei, former Minister of the Ministry of Industry and Information Technology of China, He said at an automotive forum in November The government's goal of 50% new energy vehicle penetration by 2035 is likely to be achieved by 2025 or 2026 at the latest, according to state media.

China's leading role in global industry is also due to its market size, cheap labor and its dominance of the supply chain, according to analysts.

“China now leads in production and increases its relative advantage, relying on its huge domestic market and first-mover advantage,” analysts from French investment bank Natixis Asia wrote in a report issued in late November.

They said first-mover advantage and government support through infrastructure investment and subsidies have made it easier for Chinese electric vehicle makers to expand domestically and internationally.

However, intensifying competition and a fierce price war last year affected the profit margins of many automakers.

As China's economy loses momentum, automakers have been concerned about slowing demand. In January, Tesla cut prices in China to attract customers and stop slowing growth, sparking a price war. Dozens of automakers followed suit to remain competitive.

The price war drove up sales, but threatened industry-wide profitability. In the first 11 months of last year, China's auto industry posted a profit margin of just 5%, down from 5.7% in 2022 and 6.1% in 2021, according to figures published by the China Passenger Car Association, a government-backed industry group. .

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

BYD sent a large delegation to a car show in Germany last September. The company aims to double the number of business partners in Europe in 2023, and is targeting overseas sales of 250,000, up from about 56,000 in 2022, a company spokesperson said at the time.

Last month, it announced that it would build an electric vehicle factory in Hungary, which will be its first passenger car factory in Europe. He. She It already has a bus factory in Komarom, Hungary.