China’s electric-vehicle maker BYD will be on top of the world this year, with overseas markets its main battleground.
Mostly that is because China’s EV market has been speeding ahead at full throttle. Sales of new-energy vehicles, which include plug-in hybrids, grew 37% year-over-year in the first 11 months of 2023, according to the China Association of Automobile Manufacturers. More than one in three cars sold in China were EVs.
And BYD has done even better. The Warren Buffett-backed carmaker sold more than 3 million new-energy vehicles in 2023, an increase of 62% from a year earlier. Around half of that were plug-in hybrids, but its sales of pure EVs grew even faster at 73%. BYD data indicate it sold 526,409 pure EVs in the fourth quarter of 2023, compared with 484,507 vehicles that Tesla said Tuesday it delivered in the same period.
Though nearly 90% of BYD’s sales still came from China in December, its exports have been growing fast. BYD’s overseas sales in the second half of 2023 more than tripled from a year earlier.
BYD’s Hong Kong-listed shares rose 11% in 2023. Though that has handily beat the broader market, it lagged behind Tesla, which had doubled last year. Partly, BYD was dragged down by broader malaise in Chinese stocks: Hong Kong’s Hang Seng Index lost 14% in 2023, its fourth consecutive year of declines.
Intense competition in China, marked by price wars throughout the year, was another concern. And that will probably extend into this year: There will be 158 new car models in China in 2024, 80% of which will be EVs, according to
. BYD can probably weather the storm better due to its vertically integrated model, as it did last year when it increased market share. Falling prices of raw materials, like lithium, probably will help, too. Still, Chinese EV makers like BYD will likely look abroad for potentially better margins. But Western countries are also getting more anxious about cheaper Chinese EVs flooding their markets. Europe has launched an antisubsidy probe into EVs from China while the Biden administration is considering raising tariffs on Chinese EVs. Chinese carmakers therefore have ramped up investment in Europe to make cars domestically there. BYD, for example, announced its first passenger EV factory in Hungary in December. Hungary is one of the countries that has been friendlier to China in the current geopolitical environment.
BYD’s success at home has put it at the top in the global EV race. It will now try to copy its domestic playbook elsewhere, if nations around the world allow it.
Write to Jacky Wong at jacky.wong@wsj.com
https://www.wsj.com/business/autos/chinas-ev-champion-byd-will-take-on-the-world-in-2024-9da4cfde
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