December 27, 2023 (MLN): China’s BYD Company is poised to surpass Tesla Inc. as the new worldwide leader in fully electric vehicle sales, Bloomberg reported.
When it does, likely in the current quarter, it will be both a symbolic turning point for the EV market and further confirmation of China’s growing clout in the global automotive industry.
In a sector still dominated by more familiar names like Toyota Motor Corp., Volkswagen AG and General Motors Co., Chinese manufacturers including BYD and SAIC Motor Corp. are making serious inroads.
After leapfrogging the US, South Korea, and Germany over the past few years, China now rivals Japan for the global lead in passenger car exports.
Some 1.3 million of the 3.6m vehicles shipped from the mainland as of October this year were electric.
“The competitive landscape of the auto industry has changed,” said Bridget McCarthy, head of China operations for Shenzhen-based hedge fund Snow Bull Capital, which has invested in both BYD and Tesla.
“It’s no longer about the size and legacy of auto companies; it’s about the speed at which they can innovate and iterate. BYD began preparing long ago to be able to do this faster than anyone thought possible, and now the rest of the industry has to race to catch up.”
The passing of the EV sales crown also reflects the shift in competitive dynamics between Tesla’s Elon Musk, the world’s richest executive, and BYD’s billionaire founder Wang Chuanfu.
Whereas Musk has been warning that not enough consumers can afford his EVs with such high interest rates, Wang is firmly on the offensive.
His company offers half a dozen higher-volume models that cost much less than what Tesla charges for its cheapest Model 3 sedan in China.
When a Tesla owners’ club shared a clip in May of Musk snickering at BYD’s cars during a 2011 appearance on Bloomberg Television, Musk wrote back that BYD’s vehicles are “highly competitive these days.”
The likely change in the global EV pecking order marks the realization of a goal that Wang, 57, set back when China was just starting to foster its now world-beating electric car industry.
While BYD continues to pull away from Tesla and all other auto brands at home, replicating its runaway success abroad is proving tricky.
Europe looks poised to join the US in slapping Chinese car imports with higher tariffs to shield thousands of manufacturing jobs.
Other countries’ EV markets are still in their infancy and aren’t nearly as lucrative. Management views the US as virtually off-limits due to the escalating trade tensions between Washington and Beijing.
To note, in 2008, Berkshire Hathaway Inc. invested about $230m for an almost 10% stake in the Chinese automaker.
When Berkshire started paring its holding last year, BYD shares were trading near their all-time high, the value of its stake had soared roughly 35-fold to around $8 billion.
Copyright Mettis Link News
Posted on: 2023-12-27T14:36:39+05:00
