Chinese automaker BYD recorded a significant rise in sales in December, reinforcing its position as Tesla’s closest competitor in the race to dominate the global electric vehicle market.
The Shenzhen-based company sold 207,734 EVs in December, pushing its annual sales to an impressive 1.76 million units for 2024, bolstered by government subsidies and discounts that attracted a growing customer base.
Tesla is set to release its quarterly sales figures later on Thursday. While Tesla maintained a slim lead over BYD in EV sales during the previous quarter, BYD has been rapidly narrowing the gap.
Notably, BYD’s overall vehicle sales increased by over 41% year-on-year in 2024, with its hybrid vehicles contributing significantly to this growth.
BYD’s success has been largely driven by robust sales in its home market, China, where it sells 90% of its vehicles. Competitive pricing and government incentives have encouraged Chinese consumers to trade in older cars for EVs and other fuel-efficient options. The company has solidified its lead over international competitors such as Volkswagen and Toyota in the Chinese market.
BYD’s rise underscores the challenges faced by traditional carmakers, particularly in Western markets. Japanese automakers Honda and Nissan recently announced merger talks to combat mounting pressure from Chinese EV manufacturers.
Meanwhile, German giant Volkswagen narrowly avoided plant closures after reaching an agreement with the IG Metall trade union in December. The deal staved off immediate redundancies but highlighted the growing financial strain on legacy automakers.
Stellantis, another major player, faced turbulence as CEO Carlos Tavares abruptly resigned in December following a boardroom dispute. The resignation came shortly after Stellantis issued a profit warning, further emphasizing the disruptions in the global automotive industry.
In the third quarter of 2024, BYD achieved a major financial milestone by surpassing Tesla in quarterly revenues for the first time. The Chinese automaker reported over 200 billion yuan (£21.8 billion) in revenues between July and September, a 24% increase from the same period in 2023. Tesla, meanwhile, reported $25.2 billion in quarterly revenue.
Despite this achievement, Tesla still outsold BYD in pure EV sales during the same period, maintaining its edge in the global EV market.
BYD and other Chinese automakers have been seeking to expand their EV sales beyond China but have faced resistance in key international markets. The European Union imposed tariffs of up to 45.3% on Chinese-made EVs in October, while the United States has implemented a 100% duty on Chinese EVs. Further trade restrictions are expected under the incoming administration of President-elect Donald Trump.
However, BYD continues to strengthen its presence in emerging markets. In Brazil, its largest overseas market, the company faced a setback in December when authorities halted the construction of a new BYD factory, citing labor conditions akin to “slavery” for workers. BYD responded by severing ties with the implicated construction firm and reaffirmed its commitment to adhering to Brazilian labor laws.
