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The backstory: Founded in 1995, BYD, short for Build Your Dreams, plays a significant role in the electric vehicle (EV) scene. Famous investor Warren Buffett's investment in 2008 gave China’s BYD global recognition, making it a major player in the EV market. BYD manufactures a variety of products, including electric cars, buses and batteries. It’s also a key player in China's push to expand the new energy market, competing directly with Tesla. A big moment came in the first quarter of 2023 when the company surpassed Volkswagen, becoming China's top-selling car brand.
China's push for EVs has gotten a big boost from government backing. Beijing set a target that, by 2025, a minimum of 20% of new cars sold in China should be new energy vehicles (NEVs). This category includes battery electric vehicles (BEVs), plug-in hybrids and hydrogen fuel cell vehicles. The ultimate plan is for NEVs to dominate new car sales by 2035.
The development: In the final quarter of 2023, BYD became the world's largest electric car company, outperforming Tesla for the second straight year. BYD set a new record by delivering over 500,000 battery-powered EVs by December 31, as reported in a stock exchange filing. During the same timeframe, Tesla achieved its own record with 484,507 vehicle deliveries but still fell short of BYD. While Tesla had higher annual sales, reaching 1.8 million electric cars compared to BYD's 1.57 million (a 73% increase from 2022), the gap between the two narrowed significantly. In 2023, Tesla led BYD by around 230,000 units, a considerable reduction from the 400,000-unit lead in 2022.
“China is now leading in production and increasing its comparative edges, banking on its massive domestic market and the first mover advantage,” said analysts from Natixis Asia in a report in November.
“BYD will need to refresh its model lineup or have more competitive model launches given the challenging sector competition into 2024,” wrote analysts, including Tim Hsiao and Shelley Wang, in a note.
"BYD is very, very strong," said Oliver Blume, CEO of Volkswagen, during an event at the Shanghai auto show last April. "In the end, not everything is about volume. We want to have a successful business, and it is more important to be the best international group here in China."