![BYD set to lose EV throne to Tesla as sales slip](https://skynews.icu/wp-content/uploads/2024/04/BYD-set-to-lose-EV-throne-to-Tesla-as-sales-slip.png)
Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
BYD reported a 42 per cent fall in its electric vehicle deliveries in the first three months of the year compared to the final quarter of 2023, setting the stage for Tesla to reclaim the crown as the world’s largest seller of battery electric vehicles.
Flagging demand and increasing competition in its home market, as well as the timing of Chinese new year, saw BYD sell 300,114 battery-only vehicles in the March quarter, a Hong Kong stock exchange filing showed on Monday.
The company, backed by Warren Buffett, overtook Tesla in EV sales during the final quarter of 2023, when it shifted 526,409 electric vehicles compared to 484,507 sold by Tesla between October and December.
While Tesla sales are also expected to fall in the first quarter, analysts are forecasting deliveries of 449,080, according to data compiled by Bloomberg. Tesla will release its sales figures later on Tuesday.
When including plug-in hybrids, alongside pure battery and hydrogen-powered cars, BYD recorded a quarterly sales volume of 626,263 units, up 13 per cent from a year earlier, its slowest pace of growth since the second quarter of 2022.
However, Tesla is also coming under increased pressure due to increased competition and an ageing line-up, something that may see BYD overtake it in EV sales again in the coming months.
![Aerial view of Tesla cars](https://skynews.icu/wp-content/uploads/2024/04/BYD-set-to-lose-EV-throne-to-Tesla-as-sales.jpg)
Tesla has suffered a slowdown in China, the world’s largest EV market, where it faces rising competition from local rivals, many of which are able to undercut the company’s prices with fresher vehicles.
Co-founder and chief executive Elon Musk has already warned that growth during 2024 would be “notably lower” than last year’s levels.
While Tesla sales growth has been driven by its Model 3 and Model Y cars, the group is not expected to release its next mass-market vehicle until late in 2025.
BYD has slashed prices of almost every model in its line-up since the start of the year under the slogan “electricity is cheaper than oil”, followed by its competitors including Geely and SAIC-GM-Wuling, as a price war escalates in the world’s largest EV market.
Li Yunfei, general manager of branding and public relations at BYD, said in a recent social media post that the company was starting “a grand showdown with gas cars”. “Buying a gasoline-powered car at the moment is like buying a pager when mobile phones are available,” he said when the EV group launched of a new version of the brand’s two hybrid models with a starting price of Rmb79,800 ($11,028).
BYD’s move comes as signs of softening demand have emerged in a stumbling economy. Data from the China Passenger Car Association showed that Chinese sales of pure battery cars and plug-in hybrids, which the government counts as “new energy vehicles”, or NEVs, rose 36 per cent last year, down from a 96 per cent increase in 2022. Cui Dongshu, secretary-general of the industry body, projected a 22 per cent surge in Chinese sales of NEVs in 2024.
Analysts said the ongoing price war in China’s auto market could lead to a vicious cycle. “In the case of China, when the price is lower, people think, ‘wait a minute. I’m gonna wait and buy it at the bottom’,” said Stephen Dyer, partner and managing director at consultancy AlixPartners in Shanghai. “It actually slowed down sales when that happened.”
Gaining an early edge with its fully vertically integrated supply chain, BYD is now facing competition from not only traditional carmakers and EV start-ups, but also Big Tech companies that are angling for a piece of the huge China market, such as Huawei and Xiaomi.
The Chinese market accounted for more than 90 per cent of BYD’s total sales. While China is Tesla’s single-largest market outside of the US, the country contributed 22 per cent of its total revenues during its most recent fiscal year.