China’s BYD overtakes Tesla in electric car sales as competition heats up

Electric vehicle maker Tesla has lost its crown as the world’s largest EV seller to China’s BYD, despite reporting record quarterly sales in the fourth quarter of 2023, heating up competition in the market.

This could prompt the Texas-based company to announce more price cuts for its vehicles as it attempts to get back in the driving seat, according to industry experts.

The Texas-based company sold 484,507 vehicles in the October-December period, an annual increase of about 20 per cent. Despite a better-than-expected deliveries, it was fewer than the 526,409 EVs sold by BYD in the same period.

Analysts had expected Tesla to announce deliveries of 477,000 vehicles for the final quarter of 2023, according to StreetAccount’s compilation of estimates as of December 28.

Shenzhen-based BYD sold 525,409 battery-powered EVs in the fourth quarter, marking its first three-month period when its battery EVs sales outnumbered Tesla’s deliveries.

BYD makes both hybrid and battery-run EVs while Tesla produces only the latter.

“I don’t think the price cuts are over, mainly for the reason that demand is still weak. Pricing is a key factor that could help Tesla make up for a possible demand drop and boost revenue,” said Jesse Cohen, senior analyst at Investing.com.

In one of its latest rounds of price cuts announced on October 5, Tesla slashed the prices of its Model 3 and Model Y vehicles in the US by up to 4.2 per cent, according to its website. It was its seventh price cut last year.

“As such, I would not be surprised if Tesla seeks further price hikes in the weeks ahead as trouble starts to brew at some of its competitors, including Lucid Motors and Rivian,” Mr Cohen said.

“At this point, it is clear that Tesla is embarking on a more dynamic way of pricing EVs that other manufacturers would have to follow as [co-founder and chief executive] Elon Musk seeks to balance the fine line between driving sales growth and protecting margins.”

However, despite trailing in the fourth quarter, Tesla maintained its lead over BYD in terms of total annual sales of battery-only EVs last year.

It sold more than 1.8 million vehicles last year, an increase of about 38 per cent from 2022, meeting the goal it announced during an October conference call.