Chinese electric-car (EV) maker BYD is setting new sales milestones in its global rivalry with Tesla, after snatching its crown as the world’s biggest in terms of deliveries.
The Shenzhen-based company raked in a 29 per cent jump in 2024 annual revenue to an all-time high of 777 billion yuan (US$101.1 billion), according to results published late on Monday, surpassing Tesla’s US$97.7 billion sales in the same period.
BYD, the subject of ridicule for Tesla’s CEO Elon Musk in 2011, started overtaking Tesla in sales from the third quarter of 2024, according to their earnings reports, having earlier outsold Tesla on a unit delivery basis since 2022 amid a surge in EV popularity in mainland China and state subsidies to fuel domestic consumption.
The company, however, will need to improve on its margins. While earnings rose 34 per cent to a record 40.25 billion yuan, they were about a fifth below Tesla’s US$7.1 billion last year, even after Elon Musk’s Texas-based carmaker suffered a 53 per cent drop in profitability.
“BYD is cementing its role as China’s EV king because of its dominance in the world’s largest market,” said Gao Shen, an independent analyst in Shanghai. “Its surging deliveries and diverse product offerings will help improve profitability and get the better of Tesla soon.”
Tesla’s decline has been rapid. The firm sold about 180,000 units in 2020 when its Gigafactory outside Shanghai began operations, giving it a 16 per cent share of China’s EV market. Its share dwindled to 6 per cent in 2024 and 4.3 per cent last month, industry data showed.
BYD reported 4.27 million deliveries in 2024, up 41 per cent from a year earlier. Most of its cars were handed to mainland buyers and about 10 per cent of its deliveries were in overseas markets. In contrast, Tesla deliveries fell 1.1 per cent to 1.79 million.
The Gigafactory delivered 30,688 vehicles to Chinese customers in February, a 49.2 per cent slump from a year earlier and the lowest since July 2022. BYD’s deliveries surged 164 per cent to 322,846 cars in the same month.
Musk’s political engagements may have abetted a wider fallout in Tesla’s performance. Its sales in Europe plunged 42.6 per cent in February from a year earlier to 16,888 units, according to the European Automobile Manufacturers’ Association.
Tesla is doing something to stem its slide in China while BYD and peers introduce new killer models to grab more market share. It is designing a cheaper version of its bestselling Model Y and investing in autonomous driving software for the mainland, according to two people with knowledge of the company’s thinking.
On the mainland where EV sales account for 60 per cent of global total, BYD and its local rivals are slashing prices of their EVs and introducing new models – or Tesla killers – to attract local consumers. The price war and incentives have, for now, limited the room for EV makers to boost their gross profit margins.
“Looking ahead, we expect BYD to book a net profit of 6 billion yuan in the first quarter of 2025, up 31 per cent year on year,” Deutsche Bank said in a research note on Tuesday, while forecasting quarterly deliveries would jump 60 per cent to 1 million units.
BYD is expected to generate US$130.3 billion of annual revenue in 2025 and US$154.2 billion in 2026, according to consensus among analysts tracked by Bloomberg, while Tesla is forecast to make US$110.3 billion and US$133.4 billion, respectively.
