It’s Not About Tesla Vs BYD — They Are Both Playing A Key Role In The Transition
The transition to electric mobility is well underway. There has been a lot of progress in the passenger vehicle segment over the last 12 years or so since the early days of the Nissan Leaf, the Tesla Roadster, and the Mitsubishi i-MiEV. The market share of new EV sales in China is close to 30% now. The market share is close to 20% in a lot of European countries and is now close to 7% for new vehicle sales in the US. Following the rapid improvements in battery technology and the entry of hundreds of automakers in the EV market, there are now more plug-in models to choose from than ever before. More are coming, which is important as people can only buy what is on the market and therefore the more models for consumers to choose from the better.
There is now a continuous debate across many forums and platforms, as well as in the mainstream media, focusing on what is essentially a Tesla versus BYD story. But there really doesn’t need to be any animosity about it. Both companies are playing a critical role to help the world to transition to electric mobility. Tesla has a few models that focus on the middle to upper class market segment, along with its performance and Plaid versions for the very rich. Tesla also focuses mainly on rich nations. BYD, on the other hand, has a wider spectrum and has both premium vehicles as well as small compact affordable vehicles that are aimed at the rest of the world too, and not just for the rich. So, they essentially sort of compliment each other.
One could even think of Tesla as the new Lexus, Audi, BMW, Mercedes type (No comments on panels gaps, etc. for now please). BYD can be viewed as the new Toyota that has Lexus-type models and Toyota Crown Majesta-type models, as well as Corollas and Civics. Its Corollas and Civics will have a wider reach and will be more affordable for more families around the world. There are just more people who can afford a $17,000 small electric hatchback such as the BYD Dolphin than a $50,000 compact electric SUV such as the Model Y. But they both have a place in the market, so it’s not one versus the other.
There has been a lot of talk about how Tesla is more profitable and how it makes more money per vehicle. BYD recently also shared some interesting results. BYD, in a report from Reuters, said its “third-quarter net profit likely to have more than quadrupled.” BYD has embarked on the industry’s most aggressive expansion program and has set its sights on taking its wide range of battery-electric vehicle models as well as its plug-in hybrid DM-i models to the wold. After shutting down production of full ICE vehicles earlier this year and investing on this massive expansion drive, BYD should be able to unlock efficiencies in its operations and improve margins in the short to medium term as well.
Last month, BYD’s factories produced 220,107 NEVs compared with 81,575 NEVs in October 2021. NEV stands for New Energy Vehicles. These are battery-electric and plug-in hybrid vehicles. BYD’s plug-in hybrids have fairly large battery packs (some over 20 kWh) using the Blade battery and therefore give good all-electric range. BYD is exporting these to South America as well as other places. They are very useful in a lot of places around the world where the charging infrastructure is not yet fully developed.
So far in 2022, BYD has produced 1,411,690 NEVs, according to a company announcement. The company is planning to produce at least 300,000 NEVs per month very soon. This is probably why BYD now has more room to ship its EVs to more markets around the world than other OEMs from North America or Europe are able to or willing to do. We need all countries covered. Tesla has the rich nations covered. BYD is taking its EVs to the rich nations and to more countries like Laos, Mongolia, Nepal, Cambodia, Columbia, Mauritius, and Zimbabwe!
Every new EV displaces a potential ICE vehicle purchase. Every new EV also adds to the pool of used vehicles that will displace some used ICE vehicles that would be exported to developing countries. Both Tesla and BYD have done really well and both should be commended and supported. It is actually Tesla and BYD vs the ICE MAKERS!
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