Hong Kong, China – BYD, a Chinese carmaker, has reported a significant increase in profits in its latest annual earnings report after surpassing Tesla to become 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 the previous year despite challenges in the global economy such as high inflation and slowing growth in major economies.
In the last quarter of 2023, BYD achieved a milestone by selling 525,409 battery electric vehicles (BEVs), surpassing Tesla’s sales of 484,507 EVs. Overall, in 2023, BYD sold a record 3.02 million vehicles globally, a 62% increase from the previous year. This total includes 1.44 million plug-in hybrids, a market segment that Tesla does not currently participate in.
One of the key factors contributing to BYD’s success is its affordability compared to Tesla. With an entry-level model priced at just over $10,000 in China, BYD has attracted a wider range of buyers compared to Tesla’s cheapest offering, the Model 3, which starts at almost $39,000. However, increased competition and price wars within the Chinese car industry have impacted the profit margins of companies like BYD.
Despite the challenges faced by the industry, BYD remains competitive by continuously adjusting its pricing strategies. Recently, the company lowered the price of its most affordable EV, 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 response to the competitive market environment. This trend indicates a continued pressure on profit margins within the Chinese car industry.
The competition between BYD and Tesla in the electric vehicle market reflects the broader trends in the automotive industry towards sustainability and innovation. As both companies strive to capture market share and meet consumer demand for environmentally friendly transportation options, their strategies and performances will continue to shape the future of the industry.