Chinese Electric Car Manufacturer BYD Beats Tesla in Revenue

In the third quarter of 2024, Chinese electric vehicle manufacturer BYD surpassed Tesla in terms of revenue for the first time, reporting 201.1 billion yuan ($28.2 billion) compared to Tesla’s $25.2 billion. This marks a significant milestone in the electric vehicle market, where competition between Chinese and global manufacturers is intensifying.

However, Tesla still holds an advantage in terms of profitability, with a net profit of $2.18 billion in the same quarter, up 16.2% year-on-year, while BYD’s profit rose 11.5% to 11.6 billion yuan. Despite this, BYD’s total revenue for the year is estimated to be higher than Tesla’s. BYD’s Growth: Domestic Demand and Hybrid Technology

BYD’s rapid growth can be attributed to strong domestic demand in the Chinese market and a vehicle portfolio that includes both pure electric and hybrid models.

This wider customer base allows BYD to compete better with rivals focused solely on electric vehicles. The hybrid segment is also more resilient to declining global demand as hybrid models bridge the gap between electric and conventional cars, catering to a broader range of needs. In addition, BYD’s high proportion of in-house manufactured components reduces production costs, making its vehicles more affordable and competitive, particularly among cost-sensitive Chinese consumers.

Government Support and European Expansion

The Chinese government’s incentive programs for electric and hybrid vehicles have contributed to BYD’s growth, boosting both domestic sales and protection against international challenges such as European tariffs. Both Tesla and BYD are increasing their production capacities in Europe to overcome these burdens.

Tesla has expanded its Berlin plant, while BYD plans to develop production facilities in Hungary and Turkey. Tesla’s Sales Decline in China

In October 2024, Tesla experienced a slight drop in sales in China, selling 68,000 vehicles made in the country, down 5.3% year-on-year and down 22.7% from the previous month.

Meanwhile, BYD set a record by selling 500,526 vehicles in October, marking a 66.2% increase year-on-year. Tesla attempted to offset falling demand by offering interest-free financing for the Model 3 and Model Y models in China until the end of November. However, analysts doubt this will be enough for Tesla to remain competitive against BYD in the long run, especially considering BYD’s strong domestic demand and continued subsidies in the Chinese market.

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