BYD overtakes Tesla: Will German car manufacturers soon no longer play a role?

Last Updated: 11. Januar 2024By

It was a sobering news for Tesla right at the start of the year: Although the electric car maker once again set a sales record last year, it was overtaken by Chinese competitors. At least in the final quarter, BYD was able to sell more purely electric vehicles worldwide than Tesla. For the first time, the pioneer is being dethroned, and by another newcomer in the automotive industry.

Tesla sells more per year – BYD catches up in the final quarter BYD was founded in the 1990s as a battery manufacturer and only entered the market for electromobility a few years ago – but extremely successfully. The vehicles sell exceptionally well, especially in the Chinese domestic market.

In the fourth quarter of 2023, BYD sold a total of around 526,000 battery-powered vehicles, while Tesla only managed to deliver just under 485,000 electric cars in the same period. Looking at the entire year, however, Tesla still has the lead – although the gap is narrowing. The US manufacturer sold a total of around 1.8 million electric cars last year, while BYD sold approximately 1.6 million pure electric vehicles to customers in 2023.

After Tesla, BYD will also produce in Europe If you add the 1.4 million plug-in hybrids at BYD, the company increased its sales figures in the whole year by more than 60 percent compared to 2022. Tesla’s annual sales increase was around 38 percent.

Both manufacturers are focused on expansion. While Tesla has been producing its vehicles for the European market at its Grünheide plant in Brandenburg for almost 2 years, BYD has now also announced a production location in the EU, specifically in Hungary. This means that the Chinese are now also attacking, which is likely to put additional pressure on Europe’s long-established car companies.

Europe’s car manufacturers left behind? It is indicative that neither prestige providers like BMW or Mercedes-Benz nor conglomerates like the VW Group or the Stellantis family are competing for the top position in the electric car market. While Tesla vehicles are becoming more and more common on the roads, BYD still does not play a major role here. In Germany, not even 4,000 new vehicles from the Chinese manufacturer were registered last year. But with the announced factory on European soil, this could change in the near future.

Because BYD could fill a significant market gap: that of high-quality, but affordable electric vehicles. In the German market, there are currently only 3 models under 30,000 euros purchase price, making e-mobility reserved for well-off car buyers. In order to achieve the politically desired goal of a sustainable transition to individual electric mobility, an expansion of the more affordable product range is essential.

Does BYD fill a significant gap in the German car market? BYD could now advance into this gap, while local manufacturers have hardly made any progress in electromobility for years. For example, BMW sold less than 400,000 electric cars worldwide last year, which corresponds to around 15 percent of total sales.

For 2024, the Munich-based company has set itself the goal of increasing the share to 20 percent and sales to at least 500,000 units. This does not sound particularly ambitious compared to the pure electric competition from East and West.

Stock prices with telling development Looking at the development of stock prices, the Chinese are currently already ahead: In the still young year to date, the BYD share has gained just over 1.3 percent, while Tesla’s shares have fallen by almost 6 percent. The shares of BMW, listed on the DAX, have been fluctuating around the zero line since the start of the year.

However, if you look at the longer-term development over the past 12 months, the picture is reversed: Here, Tesla clearly has the lead with an increase of almost 90 percent. On an annual basis, BMW achieves a plus of just under 10 percent, while the BYD share has had to give up ground and is trading almost 6 percent lower than a year ago.

Thus, what is reflected in the sales figures is also reflected on the stock market: In the longer term, Tesla has the crown, but in the short term, the Chinese can score – and perhaps overtake soon?