A New EV Automaker Has Unseated Tesla
2022 is not starting well for EV giant Tesla (TSLA). The economic situation due to supply shortages, inflation and rising interest rates has not been so kind to the automaker’s balance sheet. Tesla stock price has tumbled from a high of $1,200+ in November 2021 to $700 in early July 2022. To further minimize costs, Tesla has also laid off some of its workers and even closed office in San Mateo (CA). Sales of Tesla cars have also declined due to less demand (as a result of Covid rules in China) as the US economy is facing recession.
These are contributing factors to why Tesla has also fallen as the top EV automaker in the world. The honors go to Chinese EV automaker BYD (Build Your Dreams). Tesla’s production only amounted to 564,000+ units in the first quarter of 2022. BYD was able to produce 600,000 units, for their EV production. If you add hybrids, that amounts to another 600,000 units.
BYD started by making cheap clones of established car brands, but have since matured into their own. They specialize in BEV (Battery EV) and hybrid plug-in models. These are considered zero emission cars according to Chinese regulators. BYD also has a diverse business line that includes trucks, forklifts and energy products.
In fact, like Tesla BYD has its own energy storage solutions like their ESS (Energy Storage System). They can compete with Tesla not just in EV production, but batteries as well. They have over 24 years of experience in that department, so they are not a newcomer to this game. BYD has the world’s biggest Iron-Phosphate battery factory. While Tesla battery technology is considered far advanced, production at scale is still the most important task to accomplish.
What does this mean for Tesla? It will be more competition, and the type that can compete at the global level. Chinese EV automakers are making their moves, and they are also partnering with other companies. These will be strategic business deals in order to gain advantage in the EV auto market dominated by Tesla. For now BYD has taken the lead, but Tesla has already built up its reputation and credibility in the EV market to retake the lead or keep up with BYD.