In the last quarter of 2023, for the first time ever, the Chinese automaker BYD sold more electric vehicles worldwide than Tesla—526,000 to Tesla’s 484,000.

Founded in 1995 as a Shenzhen-based battery producer, BYD later turned to auto manufacturing—and its initials into the marketing slogan Build Your Dreams. The company’s EVs and hybrids typically have a shorter all-electric range than Western models. But they use iron-phosphate batteries, which cost far less to produce than Tesla’s industry-standard lithium-ion cells, making BYD’s cars—from hatchbacks to SUVs and minivans—mostly cheaper, though they do have a luxury model with a base price of around US$140,000.

Recently, BYD has seen astonishing growth. For each of the past two years, its sales increased by about a million cars—a leap unseen since 1946, when U.S. automakers resumed auto manufacturing after years of producing war materiel. Over the last three years, total Chinese EV exports have climbed by more than 850 percent, with most units going to Europe. And last year, the People’s Republic of China passed Japan as the world’s leader in automobile exports—with EVs making up around 40 percent of sales.

How did BYD pull this off—and what does it mean for the electric-vehicle market globally?

Alice Han is the China director at the New York–based consulting firm Greenmantle, where she leads research on the country’s economy, technology, and politics. Han says the rise of BYD has been driven mostly by the Chinese domestic market, and about 80 percent of its sales are still there. But the company continues to expand internationally, with plans to build factories in Asia, Europe, and South America.

The critical question facing BYD, though—and Chinese high-tech exports as a whole—is how their growth plans fit into a new era of global trade heavy with import tariffs and national-security concerns about China. The former U.S. president Donald Trump imposed a 25 percent tariff on Chinese car imports in 2018, and the current president, Joe Biden, has kept the tariff in place since, as Washington moves to cut its reliance on Chinese supply chains. Meanwhile, Han says, BYD’s key target market is now Europe—and so, much of the company’s future will depend on how open the European Union and its member states are willing to keep their markets.

Michael Bluhm: How did BYD beat out Tesla?


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