BYD is set to overtake market leader Volkswagen as China’s biggest carmaker in 2024 after outselling the German company’s joint venture units in the first 10 months, as the growing popularity of battery-powered cars strengthens its market dominance. The Shenzhen-based company delivered 2.9 million pure electric and hybrid cars to customers worldwide this year through October, a 35% increase from a year earlier. Sales are likely to top 4 million units this year, according to data provider CnEVPost, with year-end promotions likely to fire up sales. “Its performance this year will largely beat the annual forecast of 3.6 million units,” said Phate Zhang, Founder of the Shanghai-based company. “It now has an overwhelming advantage over all assemblers in China.”
VW’s factories in China have delivered 2.23 million EVs and petrol-powered cars in the first 10 months of this year. The German car maker has been the market leader in China’s car industry since it started local joint ventures with SAIC Motor and FAW from 1984. BYD also outsold Tesla in the third quarter in terms of volume and revenue. It delivered 1.13 million electric cars in the three months to September 30, a 38% jump from a year earlier. Tesla recorded sales of 462,890 units in the same period. BYD's revenue jumped 24% to CNY201.1 billion versus Tesla’s USD25.2 billion, the South China Morning Post reports.
Unprofitable Chinese EV makers, ravaged by a discount war at home and higher tariffs abroad, are stepping up cost-cutting measures and new model launches as they strive to survive in the cutthroat market. Only those that can sustain their operations without resorting to external funding will stay in the EV race as overcapacity looms, analysts said. “As the domestic market becomes saturated and overseas sales in developed economies are hampered by punitive tariffs, the key players will have to be very efficient in cost control and refrain from splashy spending to save powder for the tough business environment ahead,” said Chen Jinzhu, CEO of Shanghai Mingliang Auto Service, an industry consultancy. “The market has entered a new phase, with all companies expected to face a do-or-die moment soon.”
Professor Ouyang Minggao from Tsinghua University’s School of Vehicle and Mobility, who predicted China’s electric car boom a decade ago, says the country’s EV battery industry could expand more than sevenfold to CNY 10 trillion, despite existing overcapacity. “No amount of subsidies would work to boost the EV industry without breakthroughs in battery technology,” Ouyang said when asked if the success of China’s EV industry could be attributed to favorable policies and subsidies. “With rapid advancements in battery and EV technologies, new manufacturers have entered the market. Consumer education has progressed and the reputation of EVs has grown,” Ouyang said. “After years of developing expertise, the market has surged in the past three years, achieving record sales of 6.8 million NEVs in 2022. This was almost certainly going to happen despite uncertainties,” he said. Last year, the value of China's lithium-ion battery sector surpassed CNY1.4 trillion in total output, according to the Ministry of Industry and Information Technology (MIIT), as reported by the South China Morning Post.
