by Key Takeaways
- Tesla’s US$25.2 billion in Q3 revenue is surpassed by BYD’s $37.4 billion.
- BYD has escaped the cooling demand for pure EVs by concentrating on hybrids, which have ranges exceeding 2,000 km.
- BYD’s expansion in China has been driven by both robust local demand and government subsidies.
The top EV manufacturer in China, BYD, reached a noteworthy milestone when it overtook Tesla in quarterly revenue for the first time.
Tesla’s revenue of US$25.2 billion in the third quarter was surpassed by BYD’s revenue of 201.1 billion yuan (US$37.4 billion), a 24% year-over-year increase. The business sold a record 1.12 million electric and plug-in hybrid vehicles, resulting in an 11.5% increase in net profit to 11.6 billion yuan, despite sales that were marginally below market estimates. With a net profit of US$2.2 billion, Tesla still beat BYD in spite of this increase.
Tesla and BYD are still upending the established auto industry, putting established producers like General Motors, Volkswagen, and Stellantis in serious competition. However, BYD has been shielded from the cooling demand for pure electric cars by its hybrid vehicle lineup, which is primarily responsible for its success. As the firm concentrates more on Cybertruck production and its partial automation system than on growing its vehicle lineup, Tesla’s EV-only roster, on the other hand, appears to be stagnating.
BYD Gains a Competitive Advantage Through Vertical Integration and Hybrid Strategy
With some models boasting ranges exceeding 2,000 km thanks to updated powertrains, BYD’s hybrid vehicle technology is one of its main advantages. This hybrid dominance has made a substantial contribution to the company’s increased revenue. Furthermore, a significant amount of BYD’s vehicle components are produced internally thanks to its vertically integrated supply chain, which gives them a cost and scalability edge over rivals like Tesla.
BYD is now the third-largest manufacturer by market value, behind only Toyota and ahead of Volkswagen and Mercedes-Benz, but Tesla is still the most valuable carmaker in the world.
In China, BYD has profited from robust demand driven by national and local government incentives to encourage people to convert from gas-powered cars to electric and hybrid vehicles. BYD has been protected by its internal expansion from outside threats, such as new 45% European Union tariffs on EVs manufactured in China. Notwithstanding these global challenges, BYD is still on course to reach its updated yearly sales goal of four million cars by the end of 2024, setting itself up for a successful last quarter.
