While Tesla’s death spiral continues with the Cybertruck, competition from China (and one specific carmaker) is stepping up.
After years of dominating the electric vehicle market, Tesla might cede its crown to BYD, an emerging Chinese EV manufacturer. According to BYD data released on Tuesday, the Chinese company is closing the gap with Elon Musk’s EV giant.
In particular, BYD sold 3.02 million energy-powered vehicles, almost evenly split between battery (1.57 million) and hybrid cars (1.45 million). Tesla has yet to release market data from 2023, but it’s expected to have sold 1.8 million battery cars, while it does not sell hybrid vehicles.
Last year, the gap in battery vehicle sales was almost twice as large, and some analysts expect BYD to have overcome Tesla already in the last quarter of 2023.
In 2022, BYD also produced more vehicles than Tesla, which is widely expected to have occurred this year too.
BYD is the largest Chinese carmaker, focusing solely on EVs. In 2023, China became the world’s largest producer of electric vehicles, overcoming Germany and Japan. Companies like BYD, Nio, and Li Auto are competing with European giants like Volkswagen, Mercedes, and BMW.
The transition to electric vehicles was far slower in Europe than it was in China. Indeed, China already reached the EV production goals set for 2025.
The real problem for Tesla
While European carmakers have woken up and started taking action against Chinese competition, the same cannot be said about Tesla.
Its CEO, Elon Musk, is also the head of several other billion-dollar companies, including SpaceX and X (formerly known as Twitter). According to investors, this has taken his time away from Tesla, at a moment when competition started becoming more fierce.
In 2019, Tesla had by far the world’s largest EV market share at over 80%. By 2023, Tesla was steadily replaced by Chinese companies.
Also in 2019, Tesla announced its latest EV model: the Cybertruck. A car widely considered too difficult to produce and with a very niche target, making it hardly profitable.
After years of waiting, the first Cybertruck was released to the public in November 2023. According to Elon Musk himself, the Cybertruck is so difficult to produce that it will complete the pre-orders only in 2025 when it will finally become available for the general public.
No other Tesla models have been announced or are expected to be announced any time soon. Tesla’s sales still rely on the Model Y, one of the best-selling EV cars in history.
How long, however, before the Model Y becomes obsolete? How long before European carmakers produce a better and more efficient car? How long before China overwhelms Tesla’s market share?
