28 juin 23

BYD or Tesla: Who is winning the EV duel in China?

China, the largest EV market in the world, has witnessed significant development in the last two years, as the number of competitors and sales of new energy vehicles (NEVs) spiked, and consumers shifted their attention to hundreds of models offered in a wide range of prices. In such a competitive market, two giants, Tesla and BYD, have come face to face in the Chinese electric vehicle (EV) market; the latter is becoming more confident while the former is trying to cling to specific advantages. 

China is an EV market unlike any other. Over 90 automakers operate in the market, offering over 300 models of NEVs ranging from $5,000 to $150,000. According to Counterpoint, government incentives for startups have also helped local brands dominate 81% of the market today. 

The numbers in the Chinese EV market are impressive; as of 2021, which was the breaking point for the market, EVs represented 14.8% of all car sales. According to the China Passenger Car Association (CPCA), EV sales increased 169.1% in 2021 compared to a year before, hitting almost 3m. 

The warming-up process for the Chinese market was complete in 2022, as EV sales grew 87% year-on-year; China is the second fastest growing EV market in the world, following Japan, with a 119% year-on-year growth, says Counterpoint. Yet, China held 58.7% of the global EV market, while Europe grabbed 25.5% and North America 10.5%, according to the Wall Street Journal. 

The top 10 selling EVs in China in 2022 are listed as (source: Counterpoint):

1 SAIC Wuling Hongguang Mini EV 
2 BYD Song 
3 Tesla Model Y 
4 BYD Qin
5 BYD Han
6 BYD Dolphin
7 BYD Yuan Plus 
8 Tesla Model 3 
9 BYD Tang 
10 GAC Aion Y 


And the top five companies in the Chinese EV market in 2022 appeared as follows: 

BYD 29.7%
GM 8.9%
Tesla 8.8%
Geely 5.2%
Changan 4.5%

The grand leap of BYD 

The global EV leadership board in 2021 appeared as below (unit sales): 

Tesla +936,000
SAIC +609,000
Volkswagen +451,000 
BYD +323,000 
Hyundai Motor Group +216,000 


During the 2021-2022 period, the price range in China has significantly expanded and proved to be compatible with offering any model at any price for any customer. Tesla’s price range is between $34,000 (Model 3) and $151,000 (Model X Plaid), while BYD’s countered its rival by averaging these numbers, offering BYD Seal Sedan at around $30,000 and BYD Plus DM-i at $14,500.

Even though the profit margin is higher for Tesla as the Apple of the EV industry, in early 2023, the company cut the prices in China by 13%. The price cut happened simultaneously as the Chinese government withdrew subsidies for EV buyers, as the market became more mature and startups powerful enough to sustain their operations and consumers can pick from hundreds of models fitting their budget range. 

Yet, everything turned in 2022, as BYD became the top EV producer in China, while only being the 13th a year before, according to WSJ. Last year, BYD shipped over 1.86m EVs, almost split evenly between all-electric and plug-in hybrids, representing 30% of all NEV sales in China. As an all-electric car maker, Tesla reached 1.31m in sales globally. 

BYD had three models in the top 10 of 2021, while this number jumped to six in 2022, as the automaker increased its market share by more than 11% year-on-year, according to Counterpoint. Adapting the strategy based on offering all-electric and plug-in hybrid electric vehicles (PHEVs), BYD overtook Tesla’s throne in 2022 Q1 and is not likely to give it back. 

For Tesla, China accounts for 50% of EV sales and 20% of its production capacity, according to CNBC. To sustain these numbers, Tesla plans to build a factory in Shanghai to manufacture 10,000 units of Megapack energy storage system, around 40 GW hours of energy storage, according to the Financial Times. Additionally, Tesla plans to expand the Nevada gigafactory with a massive 3.6bn investment to keep up with batteries. The Shanghai factory, which opened in 2019, is the core of the competitive strength of Tesla, produced 90,000 units in February 2023 and can roll out 1.1mn units annually, according to CPCA. 

According to Bloomberg, BYD had a glorious 2022, as the net income increased by a massive 446%, resulting in 16.6bn yuan ($2.4bn). The BEV + PHEV strategy worked well.

What are the numbers in 2023?

So far, BYD has achieved strong results in battery electric vehicle (BEV) and PHEV sales in 2023 (units shipped): 

January     151,341
February     193,655
March          207,080 (206,089 being passenger cars)


BYD aims to reach a sales number between 3 and 3.6 million cars in 2023. 

According to CPCA, Tesla also increased all figures on its side, with local retail sales and exports reaching 77,695 units in April. In the first five months of 2023, the total wholesale sales of Tesla exceeded 382,000 units, representing a 77% increase year-on-year, according to InsideEVs. 

According to Barron’s, BYD’s market share jumped to 45% from a year ago, while CPCA estimates the percentage of Tesla in the NEV market as 11%, excluding PHEVs (around 7% a year ago). 

BYD sold over 522,000 NEVs in Q1 2023 (up 90% compared to Q1 2022), while Tesla delivered 422,000 cars in the same period, according to Teslarati. 

What are the differences between rivals? 

Tesla’s advantages

  • Advanced technology to produce BEVs
  • Cost-efficient production process
  • Strong marketing
  • Premium models

BYD’s advantages

  • Manufacturer of semiconductors and EV batteries
  • High production capacity
  • Raw mineral advantage 

Tesla is the only foreigner exempt from a joint venture condition in China and enjoyed a lower corporate income tax of 15% from 2019 to 2023. On the other hand, Tesla heavily relies on third parties such as CATL and Panasonic and depends on China for lithium supply. 

BYD holds around 28% of the Chinese BEV market, according to CPCA figures, and the Chinese giant is preparing to take Tesla on premium models too. The Yangwang U8 off-road SUV and the U9 supercar carry price tags of 800,000 yuan (100,790 euro) and 1.5 million yuan (188,995 euro), respectively, offering premium models other than Tesla for Chinese customers. 

No matter who will be the leader in the Chinese BEV market, BYD is confident enough to move on with global expansion plans. Operating in more than 40 countries, BYD plans to expand to Australia, Denmark, Norway, Thailand, and the UK (but not the US).

According to EV Volumes, global EV sales are expected to increase by 36% in 2023, exceeding 14 million units. By the end of 2023, there’s likely to be 40 million EVs on the roads globally, with a 73% to 27% ratio between BEVs and PHEVs, setting no limit for the rivalry between Tesla and BYD. 

The main image shows the BYD Seal sedan, courtesy of Shutterstock, 2216581495. The in-article image shows the Tesla Model S, courtesy of Tesla. 

Authored by: Mufit Yilmaz Gokmen