Electric car: battle at the top for the title of first manufacturer

The sales war is on. In the first half of the year, the American Tesla sold 564,743 copies of its various models. It is 638,157 for Shenzhen Group. Yes, but BYD (“Build your dreams”) also counts its plug-in hybrids. They still constitute almost half of its sales, while Elon Musk’s company only produces 100% electric. For America’s enfant terrible, honor is safe, but for how long?

BYD is growing exponentially. Originally a manufacturer of batteries, in 2003 it diversified into the automobile sector by buying a local manufacturer in difficulty, Tsinchuan Automobile Company. A few years later, the American billionaire Warren Buffett sniffed out a good deal, and invested in BYD alongside the Korean Samsung. We are in 2008. Elon Musk has just taken over the management of Tesla, which he will make a world icon of the electric car. He then openly mocks BYD and its “not very solid” technology.

This does not prevent the Chinese manufacturer from continuing its journey on the world’s largest automotive market, which also happens to be its domestic market. Elon Musk has also come to compete with him in China. Tesla opened its first production line in Shanghai a few years ago. A second line is under construction, which should allow it to produce 450,000 additional vehicles per year. The American manufacturer sold 321,000 cars in the Middle Empire in 2021, 117% more than in 2020. But it has suffered a lot since the start of the year, the confinement of the Chinese economic capital for long weeks has collapsed its production.

Upward trajectory. BYD remained on an upward trajectory, to put it mildly. Its sales in the first half of 2022 represent a jump of 325% compared to the same period last year. Its market share has climbed 36% since January because, unlike Tesla located in the epicenter of the Covid pandemic, the Shenzhen group has apparently managed to escape the various confinements imposed by the Beijing authorities.

Geographic bad luck? With the reopening of the country, Elon Musk has certainly not said his last word, as evidenced by his ongoing investment in Shanghai. But Warren Buffett can rub his hands: his investment in BYD, which made people smile when he made it fourteen years ago at the instigation of his lifelong sidekick, Charlie Munger, is one of his winning bets. The value of his investment was multiplied by forty. He would have done even better by betting on Tesla, retort financial analysts.

Maybe, but the story is not over. If Elon Musk does not intend to leave his first place on the electric podium, BYD has not said his last word either. The Chinese European offensive has begun: Inchcape, the Belgian importer of Toyota and Lexus, has also been marketing BYD models since this year. In the Netherlands, the Chinese must work with the Louwman group, which also imports Toyota. But it was through Norway that BYD set foot on the old continent nearly two years ago.

Leave a Comment