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BYD/Tesla: China’s carmakers gain ground as profitability is stretched

Low pricing strategy is not sustainable as raw material prices soar and with electric vehicle subsidies set to be phased out

It is a historic day for China’s answer to Tesla. BYD, the Chinese automaker backed by Warren Buffett’s Berkshire Hathaway, has overtaken Tesla to become the world’s top electric carmaker by sales. China’s carmakers have razor thin margins, but sales are accelerating fast.

BYD sold 641,000 vehicles in the first six months of the year, up more than 300 per cent from the previous year. That compares to 564,000 vehicles sold by Tesla, hit by supply chain and operational disruptions due to China’s lockdowns.

China, once largely seen as a domestically focused electric car market, exported more than half a million electric vehicles last year, more than double the previous year. Government policy has played a part: Beijing requires a fixed quota of electric vehicles to be made each year.

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