Race for China’s EV Market Could Last 3 Years, BYD Says, Claiming It Wants to Work with Tesla
Competition in China's electric vehicle market will continue to intensify over the next two to three years, according to Chinese automaker BYD. The company expressed interest in working with Tesla to grow the market. BYD expects to be profitable in this competitive environment, thanks to its involvement in the supply chain and its strategy of targeting different consumer price segments with sub-brands.
China's EV Market Competition to Continue for 2-3 Years
The competition for China's electric car market will likely last two to three years, according to Yunfei Li, general manager of branding and public relations at BYD. Li expressed respect for Tesla and regarded them as a client of BYD. BYD also reported a projected 74% increase in profit for last year.
Fierce competition in China's EV market has led to low prices for electric vehicles globally. Li believes that many brands that aren't able to compete will be eliminated.
Battery-only and hybrid powered cars accounted for more than one-third of new passenger car sales in China last year. Government subsidies and license plate restrictions have contributed to the rise in sales.
BYD's Strategy for Success in the Market
BYD expects to be one of the few car companies to make money in the competitive environment due to its involvement in the supply chain and its strategy of targeting different consumer price segments with sub-brands. Most of BYD's cars are in the mass market category, but the company also launched a high-end brand called Yangwang. BYD's premium electric sedan, the Han, sells in a similar price range as Tesla's cars.
BYD expressed interest in working with Tesla to grow the market and believes that BYD and Tesla, along with other new energy vehicle brands, should focus on increasing the overall market for electric vehicles.
BYD considers Tesla an important player in the rapid growth of electric cars globally.
BYD's Financial Performance and Expansion Plans
BYD reported a projected increase in profit of at least 74% for last year. The Chinese company did not disclose a vehicle production target for this year. Tesla reported a gross profit of $17.66 billion in 2023, with China accounting for about 22% of its revenue.
While BYD primarily operates in China, it has started exporting cars to Europe, South America, and other parts of Asia. The company is cooperating with the European Union's probe into subsidies for Chinese electric car companies but remains focused on global expansion.
BYD plans to work more with local partners and build factories in other markets.
