Shenzhen-based BYD sprints ahead, selling 526,000 electric vehicles in the last quarter

In a surprising turn of events, the electric vehicle landscape has witnessed a significant shift as Shenzhen-based BYD (Build Your Dreams) has unseated Tesla from its long-held position as the world’s largest electric vehicle (EV) manufacturer. As the curtains rose on 2024, BYD surged ahead, selling a remarkable 526,000 fully electric vehicles in the last three months, outpacing Tesla’s 484,000 sales.

While Tesla, under the visionary leadership of Elon Musk, has been synonymous with electric vehicles for years, BYD’s rapid growth comes on the heels of China’s determined push to bolster its automotive manufacturing base and expand globally. China, having already surpassed Japan as the world’s largest automobile exporter last year, continues to make significant strides in the EV market.

Market research firm Canalys projects that EVs will constitute around 40 percent of China’s automobile exports. Erica Downs, an expert in Chinese energy markets at Columbia University’s Center on Global Energy Policy, notes, “The government in China went all in on EVs. This was an industry that they wanted to develop, and they made sure that they had the different building blocks needed for success in place.”

The rise of BYD has triggered concerns in Washington, with policymakers fearing that an influx of Chinese-made vehicles into domestic markets could strain the US automotive industry. In response, Washington has implemented export controls and introduced legislation like the Inflation Reduction Act to bolster domestic capabilities.

Despite these concerns, experts believe that BYD’s recent triumph may serve more as a public relations victory for China than a substantial threat to global dominance. Tesla, having invested billions in creating a ‘gigafactory’ in Shanghai, remains a formidable player, alongside other major automakers like Volkswagen and Volvo, who have made significant investments and partnerships with Chinese companies to boost their EV businesses.

As BYD and Tesla eye global manufacturing expansions, industry analysts foresee a potential battle for market dominance and strategic deals. Paul Triolo, a China analyst and tech policy lead at the Albright Stonebridge Group, notes, “Even if there are major tariff barriers erected in developed-country markets, BYD’s product portfolio means that it can expand significantly in developing-country markets, where its supply chain vertical integration gives it some major cost advantages.”

However, Colin McKerracher of BloombergNEF suggests that, given the substantial lead both BYD and Tesla have over other competitors, there’s no real risk for US competitiveness. He remarks, “The US has Tesla; China has BYD. They’re the two leading EV companies in the world. They are so far ahead of everyone else that it’s not like either of those are being left behind.”

As BYD celebrates its moment in the EV spotlight, the industry watches closely to see if this shift is a temporary upset or a sign of a more enduring transformation.