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BYD is China’s largest electric car company
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If sales are bad for BYD, it could be bad for Tesla too
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BYD is bigger than Tesla
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It’s hard to imagine why a company as popular as BYD could see such a sharp decline in sales. However, by February, something happened. According to the Financial Times. “The world’s largest electric car maker reported February sales fell 41% year-on-year to 190,190 vehicles. The decline was driven by a 65% decline in domestic sales, even as export sales surged 50%.”
Part of the decline is attributed to Lunar New Year celebrations. Few think this is enough to explain the collapse.
What’s the reason? Does this reason tell us anything about Tesla (NASDAQ: TSLA ) sales? It depends on how you look at it.
Competition among Chinese electric vehicle companies is fierce. No one knows how many there are. According to Reuters statistics, the number of brands sold in China is 129. There is no way so many brands can survive. At the same time, lowering prices is one way to gain market share. They are also a path to loss. However, in the short term, this is not good for BYD.
BYD may have to speed up the pace of new model releases. In theory, increased consumer choice should help drive more sales. But new models are expensive.
As for Tesla, many of the cars it produces at its Shanghai Gigafactory are destined for export. However, they are also pushing their China business. According to Yahoo statistics, Tesla’s market share in China is 8%. Its Model Y’s market share has dropped to 20th among all brands.
China is a problem for Tesla. Its sales in the European Union have fallen by double digits in the past year. Meanwhile, BYD’s local sales grew by double digits during the same period.
Tesla’s market share in the United States has dropped to about 50%. Had it not been for 100% tariffs on Chinese EVs, the situation would have been much worse.
Tesla’s global sales have been declining. It will need to do well in China, the United States and the European Union to reverse this situation. If BYD’s sales in China are anything to go by, this year could be tough for Tesla.
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