It is said that Tesla’s dominance in the electric vehicle (EV) market, led by Elon Musk, is over. Backed by sales and profit margins in the rapidly expanding Chinese market, Tesla reigned supreme as an overwhelming leader in the EV industry earlier this year. However, China’s BYD surpassed Tesla in sales in the first half, including plug-in hybrid vehicles, and NIO also rapidly increased in sales, rising as a competitor to strongly press Tesla, Forbes reported.
Shenzhen-based BYD has long been a major shareholder of Warren Buffett-led Berkshire Hathaway. In the first half of this year, BYD’s sales of EVs and plug-in hybrid vehicles totaled 641,350 units, a whopping 315% increase compared to the same period last year. Tesla, on the other hand, increased 46% to 566,743 units. Tesla followed suit.
When it comes to battery EVs only, Tesla has surpassed BYD. In June, out of 133,036 new energy vehicles sold by BYD, 64,218 were plug-in hybrid vehicles. However, fast-growing Chinese companies such as BYD, XPeng, and Nio are especially strengthening the production of premium models competing with Tesla. The gap with Tesla is rapidly narrowing, and publicly claiming that “Tesla’s monopoly is over”.
BYD said on Twitter, “The sales volume in the first half of 2022 has exceeded 640,000 units.” While the lockdown caused by COVID-19 took a major hit at Tesla’s Shanghai plant in April and May, the impact on BYD seems to have been limited.
Considering the size of the Chinese market, the rapid growth of local EV makers is no surprise. In China, EV sales, including plug-in hybrid vehicles, will exceed 3.3 million units in 2021, significantly surpassing 608,000 units in the United States. Not only has the Chinese government actively supported it, but also cheap models, such as BYD’s sedan Han, with a selling price of about $32,800, are evaluated as excellent. The price difference with Tesla is huge.
Therefore, the high price is an obstacle to the spread of EVs in the United States. In the United States, the average price of a battery-powered EV is over $64,000. This is the result of Tesla’s dominance.
Edison Yu, a stock analyst at Deutsche Bank, points out, “The number of EV startups in China is forming a solid foundation.” In the mass market, Leap Motor, Hozon Neta, WM Motor, and BYD are pouring out new models, and as sub-brands of existing manufacturers, competition from GAC/Aion, BAIC/Arcfox, SAIC/R-brand, etc. This is getting worse. New entrants are pursuing a strategy to increase their market share in a short period of time, even at the expense of profits.
Nio is also a strong electric vehicle company. Nio has been steadily increasing sales this year through SUVs such as the ES7, which was introduced last month. The ES7 starts at $69,000. The company said that in the first half of the year, EV sales reached 25,059 units, up 14% from the previous year.
Tesla predicts that production will increase in the second half of 2022 due to the effect of new factories in Germany and Texas. In 2021, Tesla sold 936,027 sedan Model 3 and Model S, SUV Model Y and Model X, and took the top spot in EV sales. Following Tesla, China’s SAIC (Shanghai Automobile) sold 609,730 units and Volkswagen 450,131 units. BYD came in fourth place with 323,143 units, and Hyundai Motor Group, including Kia Motors, ranked fifth with 216,562 units.
In the global market, Volkswagen and Hyundai are closing the gap with Tesla, and Chinese companies are expanding their market share in Europe and Asia. In the long term, General Motors and Ford are trying to break down Tesla’s dominance by boosting EV sales.
General Motors will sell the 2023 Chevrolet Bolt EV, priced at $26,595, for the mass market, and the $62,000 Cadillac Lyric SUV and $109,000 Hummer EV for the premium segment. Is expected. Ford sells the EV version of its popular pickup truck ‘F-150 Lightning’ from $39,974, and the EV crossover ‘Mustang Mach E’ at a base price of $43,895. Tesla’s entry-level Model 3 starts at $46,990, and the Mustang Mach E costs less than that.
Emerging companies such as Lucid and Rivian in the US should also pay attention to the challenges. If they can overcome supply chain problems and rising raw material and component costs, they could expand production in 2023 and pose a new threat to Tesla.