BYD says battle for China’s EV market could last three years, wants to cooperate with Tesla

BEIJING – Competition in China’s electric vehicle market is expected to intensify in the next two to three years BYDinsisted on cooperating with tesla To grow the market.

BYD, a Chinese battery and electric car maker, has grown rapidly in recent years and says its total car production will surpass that of Elon Musk’s Tesla by 2023.

Intense competition in China’s electric vehicle market over the past two years has made electric vehicle prices among the lowest in the world, BYD’s general manager of branding and public relations Yunfei Li told reporters on Monday.

“I think this is an inevitable process, but it may take another two or three years,” he said in Mandarin, as translated by CNBC. “Ultimately, we’re going to see a lot of brands being weeded out because they can’t compete in the market.”

Battery-only and hybrid vehicles, a category known as new energy vehicles, accounted for more than a third of new passenger cars sold in China last year, according to industry data. Government subsidies and license plate regulations are helping to boost sales of new energy vehicles, while startups and traditional automakers are incorporating flashy new technologies to attract buyers.

Lee expects BYD to be one of the few car companies to remain profitable in this environment, thanks to its supply chain involvement and strategy of targeting different consumer price segments with sub-brands. He said he was doing it.

Most of BYD’s cars belong to the mass market category. Last year, the company launched a luxury brand called Yangwang, whose U8 SUV sells for more than 1 million yuan ($141,000).

BYD’s luxury electric sedan, Han, is priced at a similar price point to Tesla cars, starting at more than 200,000 yuan ($28,000). In the fourth quarter, BYD sold more battery-powered vehicles than Tesla.

“Tesla is a highly respected peer of ours, and also a customer of ours,” Lee said Monday.

He pointed out how Tesla has played a key role in the rapid growth of electric vehicles worldwide.

“I think this market is very large. It’s not that we have to surpass them or they have to surpass us. Instead, I think BYD and Tesla together or more New energy vehicle brands need to come together and think about how to increase the number of new energy vehicles. “Cake,” Lee said.

Musk acknowledged in an earnings call last week that BYD is a supplier to Tesla.

Separately on Monday, BYD said in a filing to the Shenzhen Stock Exchange that its profits rose at least 74% last year to between 29 billion and 31 billion yuan ($4.09 billion and $4.37 billion). He said it is likely to be within the range.

The Chinese company told reporters it had not yet set car production targets for this year.

Tesla reported gross profit for 2023 of $17.66 billion, down 15% from the previous year. China accounts for about 22% of Tesla’s sales.

BYD makes most of its revenue in China, but it has also started exporting cars to Europe, South America and other parts of Asia.

The company announced Monday that it will cooperate with a European Union investigation into the role of subsidies for Chinese electric vehicle companies. But BYD said it is otherwise pursuing global expansion, including strengthening ties with local partners and building factories in other markets.