Electric vehicles (EVs) are the future of transportation, as they offer a cleaner, cheaper, and more efficient alternative to fossil fuel-powered cars. The global EV market is projected to reach $824 billion by 2030, growing at a compound annual growth rate (CAGR) of 18%¹. Two companies have emerged as the leading players in this space: Tesla and BYD. Tesla, founded by the visionary entrepreneur Elon Musk, is the most popular and valuable EV maker in the world, known for its innovative and stylish cars, such as the Model S, Model 3, Model X, Model Y, and Cybertruck. BYD, which stands for Build Your Dreams, is the largest EV maker in China, backed by the legendary investor Warren Buffett, and produces a range of EVs, including cars, buses, trucks, and batteries.
In this article, we will compare and contrast these two EV giants on various aspects, such as sales, revenue, market share, technology, innovation, and challenges.
Sales
Tesla and BYD have been competing fiercely for the top spot in the global EV sales ranking. In 2023, Tesla delivered 1.84 million battery-only cars (pure EVs), while BYD sold 1.6 million units². However, in the fourth quarter of 2023, BYD surpassed Tesla for the first time, selling 526,409 battery-only cars, compared to Tesla's 484,507 units². This was mainly due to the strong demand for BYD's new models, such as the Han sedan and the Yuan SUV, which offer high performance, long range, and low price. BYD also sold 1.4 million hybrid cars in 2023, which use both battery and gasoline, while Tesla does not produce any hybrids². If we include hybrids, BYD's total EV sales in 2023 were 3 million, more than 60% higher than Tesla's².
Revenue
Tesla and BYD have also been growing their revenues rapidly, as the EV market expands and they gain more customers. In 2023, Tesla reported a revenue of $86 billion, a 28% increase from 2022³. BYD reported a revenue of $68.1 billion, a 25% increase from 2022⁴. Tesla's revenue was higher than BYD's, despite selling fewer cars, because Tesla's average selling price (ASP) was much higher than BYD's. Tesla's ASP in 2023 was around $46,700, while BYD's ASP was around $22,600⁵. This reflects the different market segments that the two companies target. Tesla focuses on the premium and luxury segment, offering high-end cars with advanced features and design. BYD targets the mass market segment, offering affordable and practical cars with decent quality and performance.
Market Share
Tesla and BYD have also been competing for the market share in the global EV market, as well as in their respective home markets. In 2023, Tesla had a 19.8% share of the global battery-only car market, while BYD had a 17.2% share. However, if we include hybrids, BYD had a 32.3% share of the global EV market, while Tesla had a 19.8% share. In China, which is the largest and fastest-growing EV market in the world, BYD had a 23.4% share of the battery-only car market, while Tesla had a 9.2% share. However, Tesla had a 21.4% share of the premium EV market in China, while BYD had a 12.7% share. In the US, which is the second-largest EV market in the world, Tesla had a dominant 69.9% share of the battery-only car market, while BYD had a negligible 0.1% share. This is because BYD has not yet entered the US passenger car market, and only sells buses and trucks there.
Technology
Tesla and BYD have also been investing heavily in technology and innovation, as they seek to improve their products and gain an edge over their competitors. Tesla is widely regarded as the leader in EV technology, especially in battery, software, and self-driving. Tesla has developed its own battery cells, called 4680, which are larger, more efficient, and cheaper than the conventional cells used by most EV makers. Tesla also has its own software platform, called Tesla OS, which enables over-the-air updates, remote diagnostics, and entertainment features for its cars. Tesla also has its own self-driving system, called Autopilot, which uses cameras, radar, and neural networks to enable semi-autonomous driving for its cars. Tesla is also working on a more advanced version of Autopilot, called Full Self-Driving (FSD), which aims to enable fully autonomous driving in the future.
BYD, on the other hand, has also developed its own battery technology, called Blade Battery, which uses lithium iron phosphate (LFP) chemistry, which is safer, more stable, and more environmentally friendly than the conventional lithium-ion (Li-ion) chemistry used by most EV makers. BYD also has its own software platform, called DiLink, which enables over-the-air updates, remote control, and entertainment features for its cars. BYD also has its own self-driving system, called DiPilot, which uses cameras, radar, lidar, and artificial intelligence to enable semi-autonomous driving for its cars. BYD is also working on a more advanced version of DiPilot, called Super DiPilot, which aims to enable fully autonomous driving in the future.
Innovation
Tesla and BYD have also been innovating in their product offerings, as they seek to diversify their portfolio and cater to different customer needs and preferences. Tesla has been launching new models and variants of its existing models, such as the Model Y, a compact SUV, the Cybertruck, a futuristic pickup truck, and the Plaid, a high-performance version of the Model S. Tesla is also planning to launch new models in the future, such as the Roadster, a supercar, the Semi, a heavy-duty truck, and the Model 2, a low-cost hatchback. Tesla is also expanding its product line beyond cars, such as the Solar Roof, a solar panel system for homes, and the Powerwall, a battery system for homes and businesses.
BYD has also been launching new models and variants of its existing models, such as the Han, a luxury sedan, the Yuan, a subcompact SUV, and the Tang, a midsize SUV. BYD is also planning to launch new models in the future, such as the Ocean-X, a sports car, the Dolphin, a compact hatchback, and the e-Platform 3.0, a new EV platform for various types of vehicles. BYD is also expanding its product line beyond cars, such as the SkyRail, a monorail system for urban transportation, and the FinDreams, a subsidiary that provides EV components and solutions for other automakers.
Challenges
Tesla and BYD have also been facing various challenges and risks, as they operate in a highly competitive and dynamic industry. Tesla's main challenges include:
- Regulatory hurdles and trade barriers in some markets, such as China, India, and Europe, which may limit its growth and profitability.
- Quality issues and customer complaints, such as software glitches, hardware defects, and service delays, which may damage its reputation and brand loyalty.
- Competition from other EV makers, such as BYD, Nio, Xpeng, and Li Auto in China, and Volkswagen, Hyundai, and Ford in the US and Europe, which may erode its market share and pricing power.
- Supply chain disruptions and shortages, such as the global chip crisis, the rising cost of raw materials, and the limited availability of battery cells, which may affect its production and delivery capacity.
BYD's main challenges include:
- Intellectual property disputes and legal battles, such as the ongoing lawsuit from Tesla, which accuses BYD of stealing its trade secrets and infringing its patents.
- Safety issues and environmental concerns, such as the fire incidents involving some of its EVs and batteries, and the pollution caused by its battery production and disposal.
- Competition from other EV makers, such as Tesla, Nio, Xpeng, and Li Auto in China, and Volkswagen, Hyundai, and Ford in the US and Europe, which may offer better products and services.
- Market saturation and price pressure, such as the declining demand and profitability of its hybrid cars, and the increasing price competition and subsidy cuts for its battery-only cars.
Conclusion
Tesla and BYD are two of the most successful and influential EV makers in the world, and will continue competing for global EV leadership. BYD are ahead of Tesla in sales, at the start of 2024. Additionally, Tesla recently had $80 billion in market value wiped out after a forecast of slow growth in sales for 2024.
Let's see what happens in the second quarter of 2024.
Source
(1) Elon Musk: "Chinese electric car manufacturers will "demolish" their competitors, in the absence of trade barriers". https://www.bursa.ro/elon-musk-chinese-electric-car-manufacturers-will-demolish-their-competitors-in-the-absence-of-trade-barriers-24547156.
(2) Tesla CEO Elon Musk Predicts 'Significant' Global Success for Chinese EV Makers if Trade Barriers Are Absent. https://www.djournal.com/news/national/tesla-ceo-elon-musk-predicts-significant-global-success-for-chinese-ev-makers-if-trade-barriers/video_dad57837-8b46-5ce5-be3c-cbcb70306072.html.
(3) Elon Musk’s warning to the market takes a $82 billion bite out of Tesla—and the path forward is daunting. https://www.msn.com/en-us/money/companies/elon-musk-s-warning-to-the-market-takes-a-82-billion-bite-out-of-tesla-and-the-path-forward-is-daunting/ar-BB1hgoqX.
(4) Tesla vs. China’s BYD: Comparative analysis of two electric automotive .... https://economymiddleeast.com/news/tesla-vs-china-byd/.
(5) BYD vs Tesla: Comparing Elon Musk and Wang Chuanfu-led EV brands. https://www.lifestyleasia.com/ind/tech/auto/byd-vs-tesla-which-is-ev-maker-has-an-advantage/.