Chinese car giant BYD is selling more electric vehicles than ever
Chinese corporate giant BYD said Monday it sold three million battery-powered cars in 2023, the highest ever, capping a turbulent year for China’s electric car industry.
Even as sales rose, fierce competition and an ongoing price war took a financial toll on many automakers.
But BYD sold 1.6 million fully electric vehicles last year and another 1.4 million hybrids, which run on both batteries and gasoline. Together, that’s a 62 percent increase from 2022. BYD is also making money, tripling its profits to $1.5 billion in the first half of last year.
All told, Chinese automakers are expected to have sold about 9.4 million electric vehicles and hybrids last year, up from 6.9 million in 2022, according to the China Association of Automobile Manufacturers. The group said it expects turnover to rise again in 2024, to 11.5 million.
Already the world’s largest auto market, China is now also the fastest growing and is racing ahead in the electric vehicle transition that is upending the global industry. China controls the supply chain for battery-powered cars — from the mining and processing of cobalt and other minerals used in batteries, to the deployment of robots in factories that make cars and trucks. China’s electric vehicle companies and their suppliers employ approximately 1.5 million people.
A major reason for China’s early lead in electric vehicles was the government’s heavy financial support for the development of the industry. After financial incentives for consumers expired at the end of 2022, automakers cut car prices to lure buyers. Many companies, including BYD, implemented a new round of cuts this fall, intensifying the price war that began earlier this year.
In November, BYD advertised discounts on five models of up to 18,000 renminbi ($2,550). Another Chinese electric vehicle company, Ji Yue, a partnership of Geely and Baidu, the price reduced of all versions of the first model at RMB 30,000 ($4,200) in November.
Last year’s price cuts were initiated by Tesla, the American car manufacturer with a factory in Shanghai. In January 2023, it cut prices in China for the second time in three months, and others followed suit.
Tesla is expected to report a big jump in its global sales this week after cutting prices late last year and customers taking advantage of US tax breaks. Tesla, founded in 2003, is on track to sell about 1.8 million battery-powered vehicles this year, up from 1.3 million in 2022. It accounts for about half of all electric vehicles sold in the United States .
As Tesla and BYD battle for the spot as the world’s most prolific maker of all-electric vehicles, both companies face increasing competition from older automakers that are spending billions of dollars to catch up.
“I think a shake-up in the industry is an inevitable trend,” said Cui Dongshu, secretary general of the China Passenger Car Association, which represents the country’s domestic industry. “But it is still uncertain who will take over the future leadership position in the long term.”
As China’s sales of electric vehicles rise, companies are pouring money into factories and research, often fueled by loans from state banks and help from municipalities. Nio, a top-selling Chinese EV brand, said in November it has laid off 10 percent of its employees.
Over the past year, Tesla has lost market share to rivals such as General Motors, Hyundai, Ford Motor and Volkswagen as they introduced more electric vehicles.
BYD, which faces prohibitively high tariffs in the U.S. market, sells most of its cars in China but is expanding globally, especially in Europe.
In December, the company announced it would build an assembly plant in Hungary, the first battery-powered car production facility in Europe. In Germany, the seat of European car production, it introduced three models of electric cars in early 2023. BYD has opened dealers in Germany, Norway and Sweden.
As global competition for electric vehicles has intensified, the political ramifications have grown. Policymakers in the United States have made it more difficult for foreign companies to partner with American companies.
And in Europe, lawmakers are examining Chinese state subsidies, a move that could lead to tariffs imposed by the European Union.
Yet the European automotive industry cannot ignore China as a customer and business partner.
BMWwhich has more than 30,000 employees in China, announced last spring that it would invest about $1.4 billion in battery assembly capacity at its factory in Shenyang, northeastern China.
Volkswagen, which considers China its largest sales market, is moving more of its supply chain and production to China. The German giant is hiring thousands of Chinese engineers to design electric cars at its industrial complex in Hefei, a city in central China.
Keith Bradsher, Melissa Eddy And Jack Ewing reporting contributed.