Tesla has lost the No1 spot as the world’s biggest electric car maker to BYD – a Chinese company that is little-known in the US.

Elon Musk’s Tesla said today it had delivered 484,000 cars in the final three months of 2023. It was more than analysts had expected.

But it was below the 526,000 battery-only cars handed over by BYD – short for Build Your Dreams – in the same period, the Chinese company reported on Monday.

Most Americans will never have heard of BYD, let alone seen one of their cars – which tend to cheaper than Tesla’s – on the roads.

BYD cars are not sold in the US, and there are no plans to do so – despite it being backed by American investment guru Warren Buffett and plans to expand into other foreign markets.

Chinese carmaker BYD sold more electric cars in the final three months of 2023 than Tesla did. Tesla still sold more over the year

Chinese carmaker BYD sold more electric cars in the final three months of 2023 than Tesla did. Tesla still sold more over the year

BYD, a Chinese company, has now overtaken Tesla as the best-selling electric car maker in the world. The Atto 3 family SUV is not sold in the US, but in the UK it costs around $46,000

BYD, a Chinese company, has now overtaken Tesla as the best-selling electric car maker in the world. The Atto 3 family SUV is not sold in the US, but in the UK it costs around $46,000

Tesla sold fewer cars in the final three months of 2023 than BYD. But it still sold 484,000 cars - helped by discounts to shift vehicles

Tesla sold fewer cars in the final three months of 2023 than BYD. But it still sold 484,000 cars – helped by discounts to shift vehicles

There is not a ban on BYD in the US, as there is on other Chinese companies such as smartphone maker Huawei.

But tariffs that benefit US carmakers mean it is not worth BYD selling cars in the US.

The company already exports around 150,000 cars a year, including to Singapore – where it is the best-selling EV brand – as well as Thainland, Brazil and Mexico. BYD also sells in the UK and Germany and plans a bigger push into Europe in 2024.

‘The US market isn’t under our current consideration,’ Stella Li, a senior vice president at BYD, said in an interview with Bloomberg.

Part of the reason is the Inflation Reduction Act, President Joe Biden’s bill aimed at boosting domestic manufcturing of EVs. It heavily favors American automakers – meaning it is too expensive to BYD to operate in the US.

Tesla founder Elon Musk once famously snickered at BYD’s cars during a 2011 appearance on Bloomberg Television.

Asked why he was laughing, he told the presenter: ‘Have you seen their car?’

He continued to laugh, and he said ‘no’ when asked: ‘You don’t see them as a competitior?’

It appears Elon Musk is thinks differently about BYD now. Back in May, a Twitter account devoted to Tesla owners reposted the 2011 clip of Musk snickering at the brand.

The 52-year-old multi-billionaire shot back: ‘That was many years ago. Their cars are highly competitive these days.’

Although BYD is little-known in the US, it got some media attention a year ago when it introduced a ‘moonwalking’ SUV.

Over the past decade, the Chinese carmaker has steadily grown – mostly on home turf – thanks to prices much lower than its American rival. BYD now plans to sell in Europe too.

BYD’s cheapest car in the UK is the Dolphin, which costs from £30,195 including tax, or $38,000.

The gap between the two giants has been steadily closing in recent years but it is the first time the Chinese company’s quarterly sales of fully electric cars have exceeded Tesla’s.

Over the whole of 2023, Tesla still sold more – 1.81 million compared to 1.58 million electric cars for BYD.  But for October, November and December, BYD sold more than 40,000 more.

 

BYD sold 526,000 cars in the final three months of 2023. The BYD Dolphin is the smallest on offer from the Chinese firm, and costs the equivelent of $38,000 in the UK

BYD sold 526,000 cars in the final three months of 2023. The BYD Dolphin is the smallest on offer from the Chinese firm, and costs the equivelent of $38,000 in the UK

Despite losing its worldwide EV crown, Tesla still beat sales expectations. Its shares jumped on Tuesday after it released its sales figures for the final quarter of 2023.

BYD also sells hybrid cars, and in total sold 3.01 million vehicles last year.

A Beijing-based analyst said it was proof that BYD, and the Chinese car industry as a whole, needs to be taken seriously.

‘For any doubters left in the west, I hope this is the final data point that points to BYD’s strength and, as importantly, how China EV Inc has bullied its way onto the global stage,’ said Tu Le, founder of Sino Auto Insights.

The news comes as demand for electric vehicles is starting to wane generally, as US car dealers complain vehicles are piling up unsold on their lots.

Research by S&P Global found that global EV sales are set to fall to 1,051,824 in January 2024. This is down from 1,406,407 in December and 1,287,991 in November this year

Research by S&P Global found that global EV sales are set to fall to 1,051,824 in January 2024. This is down from 1,406,407 in December and 1,287,991 in November this year

A host of automakers such as Toyota, Volkswagen  and General Motors, have invested millions into new EV projects in a bid to take on Tesla.

Electric car sales growth has begun to slow in the US as more car buyers turn to hyrbids – and drivers in red states shun EVs altogether.

Though electric vehicle sales are approaching a one-year record of more than 1 million for 2023, their year-over-year growth rate has begun to stall out.

Last month, EV sales were up 42 percent from one year ago, but that growth rate marked a decline from the 76 percent annual sales growth seen in April 2022, according to data reported by the Wall Street Journal.

But so far in 2023, Americans have bought a record 1 million-plus hybrids – up 76 percent from the same period last year, according to Edmunds.com. As recently as last year, hybrid purchases were below 2021 levels.