- China is the world’s largest producer of electric vehicles.
- BYD is expected to overtake Tesla to become the world’s largest electric vehicle manufacturer in the last three months of 2023.
- China’s control over battery supply chains and focus on charging networks has boosted electric vehicle sales.
The Chinese economy may be reeling, including: growth inhibition and big collapse of developersbut one industry continued to grow stronger.
China is the world leader in electric vehicles, including: 64% of total production According to the World Economic Forum, this will account for 59% of global electric vehicle sales in 2022.
BYD just sold 3,000 fewer electric vehicles than Elon Musk’s company in the three months ending September 30. Analysts say it is very likely to overtake Tesla by the end of the year, which will be a milestone for electric vehicles.
Cheaper electric vehicles
Tesla only sells four cars – the Model S and Model 3 sedans and the Model X and Model Y SUVs. All of them have premium prices ranging from $40,000 to $100,000.
BYD, in turn, focused on affordability, which helped it attract a wider range of customers and develop a new generation of electric vehicle drivers.
BYD’s Song, Qin Plus, Dolphin, Yuan Plus and Han models are also among the top 10 best-selling electric vehicles in the country. The only Tesla on this list is the Model Y, according to the outlet.
“BYD has tried to serve a broader market base with more affordable vehicles as well as some entry-level luxury vehicles,” Morningstar equity strategist Seth Goldstein told Business Insider.
“They have taken the approach of offering vehicles where there are the most customers as a strategy to increase volume. We can see from the results that it worked quite well.”
Goldstein said demand for Teslas remained strong, but argued that Musk’s company would have to “offer an affordable vehicle that could compete with BYD” if it wanted to retain its crown as the global leader in electric vehicle sales. Tesla sold 1.3 million cars worldwide last year, and Musk says he wants to see it reach that number 20 million by 2030.
Battery and charging infrastructure
Chinese companies have also benefited from China’s control over electric vehicle battery supply chains and the government’s push to build charging networks.
Batteries make up 30% to 50% of the cost of an electric vehicle. China has gained significant advantages in this area, partly due to its control over supply chains needed to make batteries, Ilaria Mazzocco, a senior research fellow at the Center for Strategic and International Studies in Washington, previously told Business Insider.
Chinese companies “now dominate the workforce and manufacturing infrastructure, as well as the extraction of key materials needed to produce electric vehicles” Morgan Stanley – it was written in the July research report.
According to the report, “as much as 90% of the electric vehicle battery supply chain is based in China,” while China’s two largest battery makers, CATL and BYD, control more than half of the market.
Competitors such as the United States were hamstrung by China’s early moves in the sector and are now “more concerned about supply chains integrated with globalization,” which have not been a problem for the Chinese government, Mazzocco said.
According to Morningstar’s Goldstein, China’s government has also turned its attention to a key piece of the electric vehicle puzzle.
“China has the world’s largest network of charging infrastructure across any highway system. Basically there will be a high powered charger every 50km along major highways – making it much easier to get around fear of traveling– he told Business Insider.
Norway also has a similarly comprehensive network, and Goldstein says such infrastructure encourages drivers to buy electric vehicles – even without government subsidies. Norwegian numbers speak for themselves: electric vehicles account for 87% of new car sales, and plug-in hybrids – 6%, according to InsideEV.
In 2022, Beijing ended its electric vehicle subsidy program that had been running for 11 years, but sales continued. China ended the year with another two strong months in October, according to Rho Motion data reported by Rho Motion in China. Reuters.
“2023 will be another banner year for China in terms of electric vehicle sales,” the data firm said.
Seeing BYD overtake Tesla in the electric vehicle race may not bring Elon Musk any festive cheer this holiday season. But perhaps he should be grateful that the Chinese company only sells electric buses in America, but not cars – at least not yet.
Stella Li, BYD’s head of North America, told Bloomberg that the company “doesn’t have to get involved.” every market – only those who he thinks are ready for his sacrifices.”