Tesla versus BYD: How Elon Musk-backed EV maker planning to reclaim pole position

Tesla versus BYD: Tesla- US-based world’s pure EV manufacturing company is facing stiff competition across world at a time when almost all economies in world are making a swift transition towards electric vehicles. BYD, China’s biggest electric vehicle (EV) maker months back dethroned Tesla from position of world’s largest EV manufacturer across world.  

In Q1 of 2024, BYD reported an EV sales decline of 43 per cent compared to fourth quarter of 2023 when BYD emerged as world’s biggest EV seller. In an exchange filing to Shenzen Stock Exchange, BYD said that it has sold 300,114 EVs in first quarter of this year, down from record-high quarterly sales of 526,409 units sold in Q4 of FY24 when it overtook Tesla as world’s largest EV seller. 

Falling Tesla’s Sales 

Tesla, trailblazer in electric vehicle (EV) market, experienced a dramatic drop in quarterly sales, prompting concerns about Elon Musk's leership and company's future trajectory. Tesla's first-quarter sales of 387,000 vehicles worldwide represented an 8.5 per cent decline compared to same period last year, marking first YoY decrease since onset of pandemic in 2020. 

unexpected decline in sales came as rivals like BYD of China and Kia and Hyundai of South Korea reported increases in EV sales, challenging notion that slower overall demand for battery-powered vehicles was solely responsible for Tesla's woes.

While Tesla's Model 3 sedan and Model Y SUV initially revolutionised auto industry, market dynamics are shifting in ways that may not favour company. Mainstream consumers, unlike early opters, may find Tesla's unconventional design, minimalist interiors, and reliance on touchscreen controls off-putting, as noted by Consumer Reports.

Moreover, Tesla's direct sales model and limited showroom presence have resulted in complaints about poor service, potentially giving tritional automakers like Ford and General Motors, with ir extensive dealer networks, a competitive edge in EV market.

Battle For Slice of China’s EV Pie

China is largest EV market in world accounting for 60 per cent of EV sales across globe and that is why Chinese market is most lucrative market for all EV players. BYD is a leing player but Tesla tried to leverage market by reducing its prices.  

In China, Huawei Technologies is also posing formidable competition in front of BYD and Tesla. Reportedly, Aito, car brand that uses some software from Huawei Technologies Co., is China's best-selling electric vehicle among EV upstarts for a second straight month, a sign of how far Chinese smartphone makers have come in ir endeavour to take on some of nation's brightest automobile companies. 

Beyond China

Tesla is not only eyeing Chinese market but with slowing Chinese economy, Tesla is looking to expand its footprint outside China. Elon Musk, in one of his tweets, said considering India’s massive market Tesla’s entry into India is a natural progression.  “Souast Asia will undoubtedly be a major place of growth over coming years in battery storage and electric vehicle option,” a senior policy visor based out of US said on X.  Tesla has been in talks with Thailand government to set up a productivity facility in Thailand. Thailand is Souast Asia’s largest car producer and export. In 2022,  Indonesia’s president Joko Widodo met Elon Musk to attract investment in India. Last year, Tesla invested in China to open a battery storage facility.