China's BYD overtakes Tesla in electric car sales as competition heats up

Shenzhen-based company, which is backed by Warren Buffett, sold 526,409 units in the final quarter of 2023 while its US rival sold 484,507

Tesla reported a 44 per cent drop in its third-quarter net income, driven by a dip in vehicle deliveries. Victor Besa / The National
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Electric vehicle maker Tesla has lost its crown as the world’s largest EV seller to China's BYD, despite reporting record quarterly sales in the fourth quarter of 2023, heating up competition in the market.

This could prompt the Texas-based company to announce more price cuts for its vehicles as it attempts to get back in the driving seat, according to industry experts.

The Texas-based company sold 484,507 vehicles in the October-December period, an annual increase of about 20 per cent. Despite a better-than-expected deliveries, it was fewer than the 526,409 EVs sold by BYD in the same period.

Analysts had expected Tesla to announce deliveries of 477,000 vehicles for the final quarter of 2023, according to StreetAccount's compilation of estimates as of December 28.

Shenzhen-based BYD sold 525,409 battery-powered EVs in the fourth quarter, marking its first three-month period when its battery EVs sales outnumbered Tesla's deliveries.

BYD makes both hybrid and battery-run EVs while Tesla produces only the latter.

“I don’t think the price cuts are over, mainly for the reason that demand is still weak. Pricing is a key factor that could help Tesla make up for a possible demand drop and boost revenue,” said Jesse Cohen, senior analyst at

In one of its latest rounds of price cuts announced on October 5, Tesla slashed the prices of its Model 3 and Model Y vehicles in the US by up to 4.2 per cent, according to its website. It was its seventh price cut last year.

“As such, I would not be surprised if Tesla seeks further price hikes in the weeks ahead as trouble starts to brew at some of its competitors, including Lucid Motors and Rivian,” Mr Cohen said.

“At this point, it is clear that Tesla is embarking on a more dynamic way of pricing EVs that other manufacturers would have to follow as [co-founder and chief executive] Elon Musk seeks to balance the fine line between driving sales growth and protecting margins.”

However, despite trailing in the fourth quarter, Tesla maintained its lead over BYD in terms of total annual sales of battery-only EVs last year.

It sold more than 1.8 million vehicles last year, an increase of about 38 per cent from 2022, meeting the goal it announced during an October conference call.

However, the goal was revised down from a sales target of two million announced in January 2023.

In comparison, Warren Buffett-backed BYD produced more than three million vehicles last year, including both hybrid and battery EVs. It sold 1.6 million battery EVs and about 1.4 million hybrid cars.

On Tuesday, Tesla said it produced 494,989 vehicles globally in the fourth quarter, up 12.5 per cent on an annual basis. It manufactured more than 1.84 million units (35 per cent up) across the entire year.

Tesla's shares closed 0.02 per cent down at $248.42 at market close on Tuesday, giving it a market value of $778.42 billion. However, it surged by 0.11 per cent in after-market trading.

The US car maker's shares have surged by about 130 per cent over the past 12 months.

BYD's latest accomplishment serves as a reminder of the obstacles confronting Nasdaq-listed Tesla, analysts said.

“As BYD has accelerated into the fast lane, it's fresh evidence of just how competitive the EV market has become and how hard it will be for Tesla to swerve back to head the pack,” Susannah Streeter, head of money and markets at Hargreaves Lansdown, was quoted as saying by BBC.

What Elon Musk has to say on diminishing performance

Tesla reported a 44 per cent drop in its third-quarter net income, driven by a dip in vehicle deliveries. Production was affected due to “planned downtime” at the car maker's factories.

“At the risk of stating the obvious, it is not possible to have a compound growth rate of 50 per cent forever, or you will exceed the mass of the known universe,” Mr Musk said about the 2024 sales outlook during the last earnings’ call in October.

“But I think we will grow very rapidly, much faster than any other car company on Earth by far.”

What is Tesla's Cybertruck and when will it hit the roads?

What is Tesla's Cybertruck and when will it hit the roads?

Tesla is expected to announce its financial results for the fourth quarter of 2023 on January 24.

Difference between Tesla and BYD

Tesla only offers EVs that are powered solely by batteries whereas BYD, founded in 1995 as a rechargeable battery maker, deals with cars, rail transit, new energy and electronics, with more than 30 industrial parks in China, the US, Canada, Japan, Brazil, Hungary and India.

The majority of its vehicles are priced cheaper than Tesla's and are available in hybrid versions. Its vehicles are currently marketed and sold only in Asia and Europe, and have yet to be introduced to the North American market.

Last month, it teamed up with Amazon Web Services, the world’s biggest cloud services provider, to boost its network of connected vehicles and push its global expansion.

Booming EV market

The car industry's transition to EVs is accelerating. By 2030, more than one in four new passenger cars sold will be an EV, according to S&P Global Mobility report.

The top car makers are expected to account for more than 70 per cent of global EV production by 2030 (compared with 2022 when they represented only 10 per cent of all EV manufacturers), it said.

Last month, the billionaire co-founder of Xiaomi unveiled the company’s first EV, announcing ambitions to become a top global car maker in 15 to 20 years and compete against Tesla and Porsche

In November Tesla, which went public in 2010, delivered its first Cybertrucks, four years after the futuristic vehicles first made their debut.

Updated: January 03, 2024, 9:33 AM