China's BYD to surpass Tesla as world's largest EV maker
What's the story
BYD has achieved its annual sales target and is likely to have surpassed Tesla to become the world's largest electric vehicle (EV) manufacturer in 2025. The Shenzhen-based automaker delivered a whopping 4.6 million new energy vehicles (EVs and hybrids) last year, a 7.7% increase from 2024. Passenger EVs accounted for 2.25M units, growing 28% year-on-year. The company's Hong Kong-listed shares rose by as much as 2.3% on the first trading day of the new year after this achievement was announced.
Market dynamics
BYD's sales strategy and future challenges
BYD's sales strategy has been a mix of fully-electric vehicles and plug-in hybrids. The company's success comes as Tesla is expected to report around 440,900 vehicle deliveries in Q4, an 11% year-on-year decline. This would mark the second consecutive annual drop for the US EV giant with total sales expected at around 1.6 million units for 2025.
Market challenges
BYD faces increased competition and regulatory scrutiny
The Chinese EV maker now faces increased pressure as China reduces some incentives promoting EV purchases. The influx of new models has also intensified domestic competition. Trade barriers are complicating BYD's plans to expand internationally, while Geely Automobile Holdings Ltd. and Xiaomi Corp.'s rapid innovations have posed a greater threat in the last year.
Strategic outlook
BYD's CEO addresses technological challenges and future plans
At an investor meeting in early December, BYD's CEO Wang Chuanfu admitted that the company's technological edge had diminished over the years, impacting domestic sales. However, he hinted at upcoming tech breakthroughs and expressed confidence in the company's ability to regain its competitive advantage with a 120,000-strong engineering team. Despite these challenges, BYD has seen a surge in overseas sales with deliveries outside China hitting 1.05 million units last year.
Future projections
BYD's ambitious sales target and market recovery
BYD aims to increase its overseas sales to between 1.5 million and 1.6 million units in 2026. This was revealed in a Citigroup Inc. report from November, citing a meeting with BYD management. Despite facing pressure after consecutive quarterly profit declines and being at the center of China's crackdown on aggressive discounting, analysts remain optimistic about BYD's resilience amid these challenges.