The Chinese carmaker BYD reported record sales in the second quarter, likely overtaking Tesla to become the biggest electric car seller globally, particularly in Europe and China.
The largest Chinese carmaker, BYD, reported a record number of new energy vehicles (NEVs) in the second quarter, including pure electric vehicles (EVs) and plug-in hybrid cars (PHEVs). Pure EV sales amounted to 426,000 units, likely surpassing Tesla’s projected sales of 441,019 EVs for the June quarter. This will be the second time the Chinese best-selling brand has overtaken Tesla to become the biggest EV seller globally, having first topped Tesla’s EV sales in the final quarter of 2023.
BYD’s sales surge due to price cuts
BYD is the largest NEV seller and the second-largest power battery maker in China. According to the company’s report, BYD sold 341,658 NEVs in June, setting a new monthly record and surpassing the previous high of 341,043 in the December quarter of 2023. Pure EV sales rose by 13% year on year to 145,179, with half-year sales amounting to 726,153, an 18% increase from the previous year. Notably, the company’s sales of PHEVs also reached a new high of 195,032 units in June, a 58% increase from last year.
The surge in sales was primarily driven by aggressive price cuts amid sluggish Chinese demand and competition with other major rivals. In March, BYD launched a new model, the Yuan, known as the Atto 3 in overseas markets, priced at just $16,644, roughly 12% less than the previous version in China. Simultaneously, Tesla offered $4,800 incentives for its Model 3 and Model Y in China. However, this price war adversely affected BYD’s profitability in the first quarter, with profits down 47% compared to the same quarter in 2023. The Shenzhen-based carmaker recorded its first quarterly revenue decline since the pandemic began in 2020.
A big push into overseas markets
The carmaker targeted gas-fuelled vehicles and accelerated its push into overseas markets. BYD launched a new round of updated models earlier this year and declared its intention to fight a “liberation battle” over the next three years. In June, BYD sold 26,995 vehicles to overseas markets, representing a 156.22% increase from last year, despite a sequential drop of 28% from May.
BYD sold 15,644 EVs in Europe last year, accounting for roughly 1.1% of the market share in the region. The company has an ambitious goal to increase its EV sales to capture a 5% market share, posing a threat to local car makers like Volkswagen and Stellantis. To compete, BYD lowered prices and sold 12,363 Atto 3 EVs, followed by 1,079 units of the BYD Dolphin and 1,055 units of the Tang in Europe last year. The Chinese firm will face an additional 17.4% duty following the EU’s announcement of new tariffs on Chinese EV imports. Despite this, BYD anticipates higher profits on certain models in the EU compared to China.
BYD’s technological advantage lies in its e-Platform 3.0, enabling lightweight and integrated solutions that can reduce costs by up to 20%. The company is also planning to introduce the e-Platform 4.0 to further enhance efficiency and cost reduction. Additionally, BYD is preparing to launch its most affordable EV model, the Seagull, in Europe next year. Moreover, it plans to establish an EV manufacturing facility in Hungary, focusing on producing electric cars with battery packs assembled before 2026.
In other regions, BYD rolled out new models in Japan and Korea, competing with local car markers, such as Toyota and Hyundai.
Tesla loses market share
In contrast, Tesla may face further challenges to its competitiveness from rivals, including not only Chinese carmakers but also other global competitors such as Hyundai and Ford. Over the past six years, Tesla has outsold all other industrial players combined in the EV market. However, reports suggest that Tesla’s market dominance in the US may diminish, with the June quarterly reports indicating a potential loss of its majority share, according to Bloomberg.
Since 2023, Tesla has encountered growth challenges, with its profit margin significantly declining due to price cuts and heightened competition. In the first quarter, Tesla reported revenue totalling $21.3 billion, marking a 9% decrease from the previous year—the largest year-on-year drop since the third quarter of 2012. Automotive revenue declined by 13% year on year to $17.38 billion. In response to these performance issues, CEO Elon Musk announced that the company would expedite the mass production of affordable EV models, moving the timeframe up to the first half of 2025 from the originally planned second half of 2025.
