BYD Leads Global EV Makers in Q4 Without U.S. Market…Yet

Chinese automaker BYD topped all automakers worldwide in EV sales in the fourth quarter, topping Tesla Motors. And while BYD has long had the backing of legendary investor Warren Buffett, and is making inroads in Europe and Mexico, it has yet to begin selling cars in the U.S.

That’s bound to change soon.

BYD said Monday it sold a record 526,000 battery-electric vehicles in the last three months of 2023.

It marked the first quarter its battery-only sales have outpaced those of Tesla. Elon Musk’s EV company saw demand slow in its home market in the final quarter of the year.

For the year, BYD sold more than 3 million new energy vehicles (NEVs) as they are referred to in China. Of those, 1.6 million were battery-only-vehicles.

BYD is benefiting from a pricing advantage over Western and other Chinese automakers because it makes its own batteries, the most expensive part of an EV. BYD started out as a battery company and began its own car business 20 years ago. The company also manufactures battery-powered buses and work vehicles, which it sells in the U.S.

BYD did enter North America last year when it launched its top-selling Dolphin EV in Mexico, where it also is scouting a location for an assembly plant. BYD also sells the Dolphin in Japan.

“As BYD has accelerated into the fast lane, it's fresh evidence of just how competitive the EV market has become and how hard it will be for Tesla to swerve back to head the pack," says Susannah Streeter, head of money and markets at the Hargreaves Lansdown financial services company.

While BYD has been slowly nosing its way into the U.S. brand-scape in the commercial-vehicle segments for the past decade, it has yet to take the big step of selling passenger cars or building a battery or assembly line plant stateside, while such investments have been made by Chinese automaker Geely, as well as newcomers Lucid and VinFast.

Legacy automakers are wary of BYD. Because U.S. rules on EV consumer subsidies require a large percentage of content and assembly in the U.S., some Chinese automakers, including BYD, are scouting plant locations in Mexico, which would enable foreign automakers to skirt some of the rules because of provisions in The US-Mexico-Canada Agreement (USMCA). Congress, however, is making noises about amending that trade agreement to block Chinese automakers from the U.S.

Chinese brands are surging in the European Union, and the European Commission is  investigating charges that state subsidies provide an unfair advantage by enabling those automakers to keep prices incredibly low. The EC is investigating to see if tariffs should be applied.

Chinese automakers are expected to have sold about 9.4 million electric vehicles and hybrids last year, an increase from 6.9 million in 2022, according to the China Association of Automobile Manufacturers. The trade group says it expects sales in 2024 to rise again to 11.5 million.

By contrast, the U.S. is expected to report EV sales of just over 1 million in 2023.