BYD, China's largest automaker, has reported record-breaking sales of new energy vehicles (NEVs) in the second quarter of 2024, putting it on track to overtake Tesla as the world's biggest electric vehicle (EV) seller. This surge in sales has been particularly notable in Europe and China, where BYD has been expanding its market share.
BYD's success is attributed to its aggressive price-cutting strategy and a push into overseas markets. In March, the company launched a new model, the Yuan (known as Atto 3 in international markets), at a significantly lower price than its predecessor. This move, coupled with Tesla's incentives in China, ignited a price war in the EV market.
While the price war negatively impacted BYD's profitability in the first quarter, the company is now focusing on expanding its presence in overseas markets. In June alone, BYD sold 26,995 vehicles overseas, a significant increase from the previous year.
In Europe, BYD aims to increase its market share from 1.1% to 5%, posing a challenge to established automakers like Volkswagen and Stellantis. Despite facing new tariffs on Chinese EV imports, BYD remains optimistic about its prospects in the region, anticipating higher profits on certain models in Europe compared to China.
BYD's technological advantage lies in its e-Platform 3.0, which enables cost-effective and efficient EV production. The company plans to further enhance its efficiency and cost reduction with the upcoming e-Platform 4.0. It is also preparing to launch its most affordable EV model, the Seagull, in Europe next year.
In contrast, Tesla's market dominance is facing challenges from Chinese competitors like BYD, as well as other global rivals such as Hyundai and Ford. Tesla's market share in the US is expected to decline, and the company has faced shrinking profit margins due to price cuts and increased competition.
To address these challenges, Tesla is accelerating the mass production of its more affordable EV models, aiming to launch them in the first half of 2025. The outcome of this intense competition between EV manufacturers will likely shape the future of the electric vehicle market in Europe and beyond.
