Race for China’s EV market could last 3 years, BYD says, claiming it wants to work with Tesla

BEIJING – Competition in China’s electric vehicle market will continue to intensify in the next two to three years BYDclaiming that they hope to cooperate with Tesla Expand the market.

Chinese battery and electric vehicle maker BYD has grown rapidly in recent years and will surpass Elon Musk’s Tesla in total vehicle production in 2023.

Li Yunfei, BYD’s general manager of brand and public relations, told reporters on Monday that fierce competition in China’s electric vehicle market over the past two years has resulted in electric vehicle prices reaching the lowest levels in the world.

“I think this is an inevitable process, but it may take another two to three years,” he said in Mandarin (translated by CNBC). “Ultimately, many brands that cannot compete in the market will be eliminated.”

Pure battery 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, industry data shows. Government subsidies and license plate restrictions have helped boost NEV sales, while startups and traditional automakers have adopted flashy new technologies to attract buyers.

Li said he expected BYD to be one of the few car companies making money in this environment due to its involvement in the supply chain and its strategy of targeting sub-brands in different consumer price ranges.

Most of BYD’s cars fall into the mass-market category. The company launched a high-end brand called Yangwang last year, with its U8 SUV priced at more than 1 million yuan ($141,000).

BYD’s Han, a premium electric sedan, is priced similarly to Tesla vehicles at more than 200,000 yuan ($28,000). In the fourth quarter, BYD’s electric vehicle sales surpassed Tesla’s.

“Tesla is a peer we respect very much. It is also our customer,” Li said on Monday.

He pointed out that Tesla has played an important role in the rapid growth of electric vehicles around the world.

“I think this market is huge. It doesn’t mean that we must surpass them, nor that they must surpass us. On the contrary, if BYD and Tesla are together, or more new energy vehicle brands are together, we need to think about how to Increasing sales of new energy vehicles “takes the cake,” Li said.

Musk confirmed BYD as a Tesla supplier during an earnings call last week.

Separately, BYD said in a filing with the Shenzhen Stock Exchange on Monday that profits last year were likely to grow at least 74% to 29 billion to 31 billion yuan ($4.09 billion to $4.37 billion).

The Chinese company told reporters it has not yet set a vehicle production target for this year.

Tesla announced gross profit of US$17.66 billion in 2023, an annual decrease of 15%. China accounts for about 22% of Tesla’s revenue.

BYD generates most of its revenue from China but has begun exporting cars to Europe, South America and other parts of Asia.

The company said on Monday it was cooperating with an EU investigation into the role of subsidies to Chinese electric vehicle companies. But BYD said it was pushing for global expansion, including strengthening cooperation with local partners and building factories in other markets.