BYD Retakes EV Crown, But Faces Margin Pressure

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It only took one quarter for Tesla to reclaim the title of the world’s largest electric vehicle (EV) maker. Its return to the top spot was made possible by the decline of its main rival, Chinese automaker BYD, which reported a 42% drop in EV deliveries in the first three months of this year compared to the last quarter of 2023.

BYD’s Decline

While BYD sold 526,409 EVs between October and December of last year, compared to Tesla’s 484,507, decreased demand, increased competition in the domestic market, and the celebration of the Chinese New Year meant that it only delivered 300,114 EVs in the first three months of this year. On Tuesday, Tesla reported sales of 386,810 vehicles in the first three months of 2024, down 20.2% from the previous quarter, but still ahead of its Chinese rival.

However, as the Financial Times reminds us, Tesla is also facing increased pressure due to higher competition and an aging product portfolio, which could prevent it from holding the number one position for long and could be overtaken by BYD again in EV sales in the coming months. CEO Elon Musk has already warned that growth during 2024 will be “significantly lower” than last year.

BYD’s Overall Growth

Unlike Tesla, BYD does not only sell battery-electric cars. Including plug-in hybrids and hydrogen cars, BYD delivered 626,263 cars in the quarter. This represents a 13.4% increase year-on-year, but a 33.7% decrease from the quarterly record of 944,779 vehicles in the fourth quarter, according to Reuters. BYD’s sales in March totaled 302,459 vehicles, up 46% from a year ago and the second-highest monthly sales. Last December, BYD reported a historical monthly high of 341,043 units.

While Tesla has regained the top spot in EV sales for now, BYD remains a formidable competitor with a broader product portfolio and a strong presence in the Chinese market. Both companies are facing challenges, but they are also well-positioned to continue to grow in the rapidly expanding EV market.

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