Does Buffett-Backed BYD Have Tesla and Elon Musk in Its Sights?
The first half of 2022 is behind us, and we have an interesting fight in the electric vehicle market. Chinese-based BYD, backed by Warren Buffett’s Berkshire Hathaway, sold nearly 100,000 more electric vehicles than Elon Musk’s Tesla. These delivery numbers show the Chinese company on the rise in an arena that Tesla has dominated. Will BYD outsell Tesla electric vehicles going forward?
Maybe we aren’t comparing apples to apples with these electric vehicles
Tesla only sells electric models. They have never had hybrid, gasoline-powered, or plug-in hybrid vehicles. During the first six months of 2022, Tesla reported delivers of 564,000 vehicles globally. This is a little short of their goal, which would require increased sales of 46 percent to reach the full-year target.
During the same time period, BYD (which stands for “Build Your Dreams”) sold 641,000 electric vehicles. This is an increase of nearly 300 percent compared to the first half of last year. Although plug-in hybrid vehicles qualify as EVs under China’s environmental rules, they aren’t true EVs. Nearly half of the models BYD sold were PHEV models, which technically means Tesla still has the lead in pure electric models.
Why did Tesla shut down its Shanghai Giga factory in April?
A local COVID lockdown order forced Tesla to shut down its Shanghai factory for a month. This closure lasted longer than anticipated and caused the company to lose production and sales during that time.
Is Tesla vulnerable to BYD taking over?
Bloomberg anticipates BYD sales of pure electric vehicles will surpass 1,000,000 in 2024, which could put the company ahead of Tesla. Currently, only Volkswagen and Tesla build more electric vehicles than BYD. Of course, the fact that BYD is a local company in China and serves the largest auto market in the world makes things a little more difficult for the top global electric vehicle brand, Tesla.
Is Tesla in trouble in China?
Tesla isn’t facing any challenge that other automakers don’t already face. Much like the rest of the world, it’s difficult in China to secure the parts and supplies needed for Elon Musk’s company to build its EVs. This doesn’t spell any more trouble than in other parts of the world unless China forces suppliers to favor local companies over foreign brands. In that case, BYD would receive the necessary parts much sooner than Tesla.
Will BYD sell electric vehicles in the United States?
Eventually, we will see EV models in the US that wear the BYD brand. Currently, there are some electric buses made by BYD in America, but no passenger cars yet. This company intends to bring EVs to America in the near future, but current infrastructure funding could exclude this company.
Crossing the Pacific to sell in America could be a challenge for any Chinese-based company, even one backed by the likes of Warren Buffett. Could a move to the US prove that BYD is dominant over Tesla and Elon Musk, or would it be an exercise in futility?