China’s BYD Aims for Luxury Electric Car Market Domination, Eyes Tesla

Plans to Launch Various Luxury Models This Year
Pursuing Brand Value Enhancement
Domestic Slowdown Leads to Overseas Strategy, Targeting 400,000 Exports
Global Competitors on Edge: “Demise without Trade Barriers”

Following its achievement as the world’s top seller of electric cars last year, China’s BYD is setting its sights on the luxury car market this year.

According to Bloomberg on the 18th (local time), BYD announced, “We plan to launch several high-end luxury models starting this year,” and “our goal is to enhance brand value by increasing the production of luxury cars, not just being a manufacturer of stylish and reasonably priced cars.”

So far, BYD has made its mark in the global market with affordable prices and sophisticated designs by Wolfgang Egger, a former Audi designer. The cheapest model was sold for about $11,000 in China. As a result, BYD has become considered one of the strongest competitors against Tesla in the United States. In the fourth quarter of last year, it topped the world in pure electric car sales, selling 526,000 units, surpassing Tesla (484,507 units). It plans to expand its luxury car lineup and catch two quantitative and qualitative growth birds.

Along with the plan to launch its highest-end model this year, BYD has also increased its export target for electric cars. BYD has set a target of 400,000 units for exports this year, nearly doubling the 242,000 units exported last year.

To achieve this, BYD is buying ships to transport cars to Europe and ramping up efforts to establish factories overseas. This year alone, it will start supplying from factories in Uzbekistan and Thailand. It plans to open additional factories in Brazil and Hungary within a few years. It is also pushing to establish a factory in Mexico as a base for exports to the United States and plans to enter Korea in the third quarter of this year.

The Wall Street Journal (WSJ) found that the background to BYD’s accelerated strategy for overseas markets is China’s slowdown in domestic demand. The Chinese electric car market is slowing down due to the domestic economy’s downturn and government subsidy cuts. The growth rate of electric car sales in China dropped sharply, from 74% in 2022 to 21% last year. This trend can be seen in BYD’s sales performance. Last month, BYD’s new car sales fell by about 40% from the previous month to 201,493 units, but among them, exports reached a record high of 36,174 units.

Global auto companies are on edge due to BYD’s aggressiveness. Last month, Elon Musk, CEO of Tesla, said, “If there were no trade barriers, Chinese electric car companies would have almost wiped out most competitors around the world.” The Alliance of Automotive Innovation (AAI) in the U.S. also noted in a recent report that “if cheap Chinese cars, backed by the Chinese government’s support, enter the U.S. market, the U.S. auto industry will almost go extinct.”