BYD, a Chinese carmaker, reported a significant increase in profit of more than 80% in its annual earnings, surpassing Tesla as the world’s top seller of electric vehicles. The company’s net profit nearly doubled to 30 billion yuan ($4.2 billion) in 2023 from 16.6 billion yuan ($2.3 billion) in 2022, despite facing a challenging external environment with high global inflation and economic slowdowns.
In the last three months of 2023, BYD overtook Tesla as the top seller of electric vehicles worldwide, selling 525,409 battery electric vehicles compared to Tesla’s 484,507. Throughout 2023, BYD sold a record 3.02 million vehicles globally, an increase of 62% from the previous year, including 1.44 million plug-in hybrids. Despite selling more battery electric vehicles, Tesla sold 1.8 million compared to BYD’s 1.57 million in 2023.
One of BYD’s advantages over Tesla is its affordability, with entry-level models selling for just over $10,000 in China compared to Tesla’s cheapest model, the Model 3, which costs almost $39,000. However, intense competition and a price war in the Chinese car market have affected the profit margins of many companies, including BYD. The overall profit margin for the country’s car industry was 5% for the first 11 months of 2023, down from 5.7% in 2022 and 6.1% in 2021.
Despite the impact on profit margins, the price war in the Chinese car market shows no signs of slowing down. BYD recently reduced the starting price of its most affordable electric vehicle, the Seagull hatchback, by 5% to 69,800 yuan ($9,670). Other Chinese carmakers, such as Geely, Chery, and XPeng Motors, have also announced price reductions in recent weeks. The competition and price reductions are likely to continue as companies vie for market share in the growing electric vehicle sector.
BYD’s success in overtaking Tesla as the top seller of electric vehicles highlights the company’s rapid rise in the market. Despite facing challenges in the global economic environment, BYD’s affordable electric vehicles have appealed to a wide range of buyers, contributing to its strong sales performance. As the electric vehicle market continues to grow and evolve, BYD’s competitive pricing and expanding product range position it well for continued success and growth in the future.
