Tesla is losing its lead: now the person who sells the most electric cars in the world is China’s BYD

The dominance of Tesla, Elon Musk’s leading company in the electric car sector, has been seriously tested for the first time Chinese competitor BYD. Record sales in the fourth quarter of 2023 — traditionally a good time for Tesla — beat expectations with 1,808 million vehicles shipped, a significant 38% increase compared to 2022, but it wasn’t enough to confirm American as the first. seller fully electric cars in the world. BYD outperformed Tesla last quarter from last year with 526,409 units sold compared to Tesla’s 484,507, meaning the first historical overtaking by a Chinese manufacturer against the American car company. Chinese company is already the first in the worldwith 3.02 million, if you also count plug-in hybridsmore than 9 out of 10 sold in China.

However, Musk’s house lost the battle, not the war, as it still remains the leader in the calendar year with 1.8 million cars (+38% in 2022) compared to Byd’s 1.5. “This quarter was still significant for Tesla – commented Dan Ives, Wedbush analyst –. Achieve number 1.8 million vehicles by 2023 it was a remarkable achievement, given the macroeconomic context.” However, despite the momentum generated by the December promotions and discounts and overall good results, the reality remains Tesla failed to meet the target set by CEO Elon Musk twelve months ago, which predicted sales of 2 million units per year. Market analysts polled by financial analytics firm Visible Alpha predict that Tesla will meet its sales target next year, reaching its goal of 2.2 million deliveries. The problem is that in the meantime if BYD continues at its current pace, it will surpass Tesla and reach 2.8 million deliveries in 2024.

In China, thanks to government support and careful planning by the government, local automakers control the production of almost all resources, materials, and parts needed to produce electric cars. Thus BYD, which operates mines and manufactures batteries and chips, defeated foreign rivals at home. At the end of last year, the six best-selling electric car models in China were from BYD, while the company’s business share increased to more than 35%. Currently, the company focuses its attention on research new foreign markets including Europe.

Investors of the American company are worried about the pressure on Tesla’s margins, which fell from 17.2% to 7.6% over the year.. In 2023, the company made the decision because sales were slowing down to reduce the prices of its four models, sacrificing profit margins that were the best in the business. This choice was made precisely in response to aggressive competition in the Chinese marketwhere Tesla lost market share due to the presence of strong local competitors. In the United StatesHowever, the slowdown in demand for electric cars has led Ford and GM to scale back their electrification programs, confirms Tesla as the undisputed leader and will cause its stock to rise 130% in 2023.

However, Tesla shares remained in the negative for most of the day in recent market sessions. It reflects that challenges that Tesla faced during the year: in mid-December, the Texas company was forced to recall 2 million vehicles in circulation improve the safety of the assisted driving software. In addition, the Biden administration recently released a list of models to benefit from tax credits up for $7,500 per vehicle. And only the Model Y remained on the list.

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