Chinese electric vehicle company dethrones Tesla as largest manufacturer

Tesla has been leading the way for electric vehicles for years now, but as soon as 2024 began, they were knocked off the top spot.

Let's be honest, if you think of an electric vehicle, you’re immediately going to think of Tesla.

Elon Musk’s company has been synonymous with electric vehicles for years and has enjoyed holding dominance in the industry.

However, mere days into the new year, a Shenzhen-based giant knocked them off the number one spot after selling 526,000 fully electric vehicles in comparison to Tesla’s 484,000 in the last three months.

BYD (Build Your Dreams) has rapidly grown after China vowed to push its automotive manufacturing base and expand globally.

The country first went on to surpass Japan last year as the world’s largest automobile exporter, before making further leaps and bounds.

According to market research firm Canalys, EVs will have made up around 40 percent of those exports.

Erica Downs, an expert in Chinese energy markets at Columbia University’s Center on Global Energy Policy, said: “The government in China went all in on EVs.

“This was an industry that they wanted to develop, and they made sure that they had the different building blocks needed for success in place—so there were subsidies to EV manufacturers; there were subsidies to EV buyers; and they’ve been working on making sure there is adequate charging infrastructure.”

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But Washington has been worried about Beijing and concerns have arisen as policymakers fear that if Chinese-made vehicles rush into their domestic markets, it could strain them.

This was when Washington decided to impose export controls and announced new legislation, such as the Inflation Reduction Act, to strengthen domestic capabilities.

Downs said: “There’s real concern in the United States about having Chinese EVs come into the market and dominate and put domestic producers at a disadvantage.”

European Commission President Ursula von der Leyen said during the initial probe: “Global markets are now flooded with cheaper Chinese electric cars. And their price is kept artificially low by huge state subsidies.”

Tesla has recently spent billions to create a ‘gigafactory’ in Shanghai, and even Volkswagen and Volvo made major investments and joint ventures with Chinese companies to boost their EV business.

As BYD and Tesla are both seeking manufacturing expansions around the world, they may be looking at a battle for market dominance and strategic deals.

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Paul Triolo, a China analyst and tech policy lead at the Albright Stonebridge Group, commented on the duo: “Even if there are major tariff barriers erected in developed-country markets, BYD’s product portfolio means that it can expand significantly in developing-country markets, where its supply chain vertical integration gives it some major cost advantages.”

However, experts believe that BYD’s latest top-spot in the industry will mostly be limited to only being a public relations victory for China and not a risk for global dominance.

Colin McKerracher, who manages the transport sector at BloombergNEF, commented that both companies are so far ahead of other organisations, and they each have their own area of the global market at their disposal.

He said: “I don’t think there’s any real risk here for US competitiveness. The US has Tesla; China has BYD. They’re the two leading EV companies in the world.

“They are so far ahead of everyone else that it’s not like either of those are being left behind.”

UNILAD has contacted Tesla for comment.