On this year’s China National Day, Oct. 1st, the first day for announcement of new car handover quantities in September, Wang Xing, founder of Meituan, a Grubhub like company, and an investor in Lixiang Electric Vehicle (EV), improvised a comment on the sales performance of the EVs in his Wechat friend circle: “In the past two to three decades, the leader of the Chinese premium high-end car market has been the German BBA (BMW, BENZ, AUDI), but the next two to three years will depend on ‘LiWeiHua'(Lixiang, Weilai, Huawei, new Chinese EV companies),. No matter which one wins, China will win.”
In fact, as the major new EV brands have announced their September and third quarter sales, the industry competition has intensified while the reshuffling effect between different brands has emerged.
Among them, BYD, which sold more cars for two consecutive quarters than Tesla, is expected to sit on the throne of the world’s first this year. While the new EV makers are facing the car giant’s “pro-son” competition.
Under the big reshuffle, the old players fall behind, new players to rebound, the industry market is not yet determined, especially under the new EV makers fluctuating production capacity, the whole market situation becomes more confusing.
1, Ranking keeps changing: the numbers
The Mid-Class EV Brands:
The Price Competitive Brands
Giving regard to Chinese government policy and the changing market, the battle for the Chinese EV industry is in full swing, but the market has not yet completed its final screening as the handover amount is fluctuating. Standing in the last quarter of 2022, when Xiaomi car has not yet started mass production, Huawei has not yet built a car under its name, and Apple’s car has not yet made an official announcement, the chances for the later comers become smaller and smaller.
02, Tesla is under high pressure
In the second quarter of this year, when BYD overtook Tesla for the first time as the world’s No. 1 electric vehicle supplier, many analysts attributed this primarily to production capacity limitations caused by Covid-19 controls in Shanghai. But the recently announced third quarter sales further validate BYD’s growth potential, while Tesla blamed logistical constraints for less-than-expected deliveries.
The day after Tesla’s deliveries were announced on Oct. 3, U.S. time, its shares plunged more than 8 percent. Its third-quarter car deliveries of 343,800 units fell short of market expectations of 357,900 units, and by the close of trading on Friday, Oct. 7, Tesla had accumulated a three-day decline of about 16 percent, its worst one-week performance since March 2020.
Since the global popularity of electric vehicles began, Tesla has almost always sat at the top, but in the second quarter of this year, the market situation began to change, BYD overtook Tesla for the first time to become the world’s number one electric car manufacturer, and after entering the third quarter, the gap between the two is rapidly expanding.
BYD’s development is really amazing. Just two years ago, its annual sales were only 190,000 units, while Tesla’s sales were up to 500,000 units, BYD is less than half of Tesla’s sales. In year 2021, BYD sales tripled to 604,000 units, Tesla sales also grew to 936,000 units, BYD and Tesla still have a gap, but it has reached 2/3 of Tesla’s sales. After 2022, BYD quickly narrowed the gap with Tesla, and in the second quarter successfully topped, and now the sales gap between the two is further widened.
It may seem unexpected, but it actually makes sense.
This has a lot to do with China’s new energy vehicle sales market explosion, data show that the first half of this year, global sales of new energy vehicles is more than 4.22 million units, of which China’s sales is up to 2.6 million units, accounting for more than 60%.
A significant problem for Tesla is that it has limited models. There are totally 4 models on sale on Tesla offical website: model 3, model Y, model X, model S. The model 3 and model Y accounted for a whopping 95% of the 343,800 electric vehicles sold in the third quarter of this year, which were released in 2016 and 2019, respectively.
In comparison, BYD’s product line is much wider, with different cars in its Dynasty series and Ocean series covering different prices from 100,000 to 300,000 yuan (USD13,906-USD41,718), with the cheapest Yuan Pro starting at less than 100,000 yuan (USD13,906), while Han and Tang models are priced upwards to more than 300,000 yuan (USD41,718).
In addition, Tesla’s main use of ternary lithium batteries are said to be not safe enough, repeated safety accidents seems to have reduced consumer trust, especially not long ago Lin Zhiying, a Taiwan Star, had an accident while driving Tesla. “Now who dares to buy a Tesla, I always try to keep a safe distance with Tesla on the road.” A new energy taxi driver spat.
On 2022 World Power Battery Conference, Professor Sun Jinhua from the University of Science and Technology of China has revealed a set of data: In year 2021, the national electric vehicle fire accidents is more than 3,000 cases, of which 60% were caused by ternary lithium battery models, while only 5% of lithium iron phosphate batteries.
On the other hand, BYD has been making a lot of moves, and its ambition to compete for global new energy vehicle supremacy has been put on the table. First, in March, it officially stopped the production and sales of fuel vehicles and focused on developing BEVs (pure electric vehicles) and PHEVs, and then, just this past September, it announced its official entry into the European market, where it released three models, Han, Tang and Yuan.
According to the current sales situation, BYD is quite close to the annual sales target of 1.5 million units, and in the 4th quarter of this year, BYD is expected to hit a higher sales target.
But it should be noted that the BYD era of electric vehicles has not really arrived, in the BYD delivery of new energy vehicles, hybrid models and pure electric models are still half each, and the former is mostly considered a transitional model of the new energy era. Pure electric is the real EV.
In addition, from the point of view of profitability, Tesla is still the king of the current market. Although BYD is a cut above Tesla in overall sales, the revenue and profit level is still a gap with Tesla because the main models are basically below 300,000 yuan (USD41,718).
No doubt, for the two giants, the battle is still in the beginning stage, the further competition in the field of pure electricity will continue.