Race for China’s EV market could last 3 years, BYD says, says it wants to work with Tesla
Chinese manufacturer BYD had one of the largest stands at the 2023 IAA show in Munich, Germany.
Arjun Kharpal | CNBC
BEIJING – Competition for China’s electric car market will continue to heat up in the next two to three years, according to BYDwho said he wanted to work with him Tesla to grow the market.
Chinese battery and electric car maker BYD has grown rapidly in recent years, with total vehicle production in 2023 surpassing that of Elon Musk’s Tesla.
Fierce competition in China’s electric car market in the past two years has led to the lowest prices for the vehicles globally, Yunfei Li, general manager of branding and public relations at BYD, told reporters on Monday. .
“I think this is an inevitable process, but it will probably take another two or three years,” he said in Mandarin, translated by CNBC. eliminate many brands that cannot compete in the market.”
Battery-only and hybrid cars – a category known as new energy vehicles – accounted for more than a third of new passenger cars sold in China last year, according to industry data. Government subsidies and license plate restrictions have helped boost sales of new energy cars, and startups and traditional automakers have introduced smart new technology to attract buyers.
Li said he expected BYD to be one of the few car companies to make money in such an environment, thanks to its involvement in the supply chain and its strategy of focusing on different consumer price categories with sub-brands.
Most BYD cars are in the mass market segment. Last year the company launched a high-end brand called Yangwang, whose U8 SUV sells for more than 1 million yuan ($141,000).
BYD’s flagship electric sedan, the Han, sells in a similar price range to Tesla cars – above 200,000 yuan ($28,000). In the fourth quarter, BYD sold more battery-powered cars than Tesla.
“Tesla is our highly respected business peer. It is also our client,” Li said on Monday.
He pointed out how Tesla is playing an important role in the rapid growth of electric cars around the world.
“I think this market is very big. It’s not that we have to surpass them or they have to surpass us. Instead, BYD and Tesla together, or more new brands of energy vehicles together , we have to think about how we can increase the new energy vehicle ‘cake,’ said Li.
Musk confirmed last week on an earnings call that BYD is a Tesla supplier.
Separately on Monday, BYD said in a filing with the Shenzhen Stock Exchange that last year’s profit rose at least 74% to a range of 29 billion yuan to 31 billion yuan ($4.09 billion to $4.37 billion).
The Chinese company told reporters that it had not yet set a vehicle production target for the year.
Tesla reported a total profit of $17.66 billion in 2023, down 15% from a year ago. China accounts for about 22% of Tesla’s revenue.
BYD makes most of its money in China, but has started exporting cars to Europe, South America and other parts of Asia.
The company said on Monday it was cooperating with a European Union probe into the role of subsidies for Chinese electric car companies. But BYD said it was otherwise pushing ahead with global expansion, including working more with local partners and building factories in other markets.