In this episode of the Biz Doc Podcast, Tom Ellsworth unmasks the misleading figures in wage growth compared to inflation, reveals the truth behind the numbers, and delivers a case study on Chinese giant BYD, which appears to be closing in on Tesla’s dominance in the electric vehicle (EV) realm.
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Tesla Motors, long the king of electric vehicles (EV), was surpassed in quarterly sales by Chinese company BYD for the first time. BYD reported sales of 526,000 fully-electric vehicles in quarter four (Q4) 2023, while Tesla only sold about 485,000 in that same timeframe. Tesla delivered a total of 1.81 million vehicles globally in 2023. It hit its annual target, but there was a slight slowdown in its rate of growth (only 38 percent higher than 2022). It remained ahead of BYD in terms of full-year sales. BYD sold 1.6 million vehicles last year, which was an increase of 70 percent from where they were in 2022.
But what is BYD…where did it come from…and is it really superior to Tesla?
Where it Began
In 2003, Wang Chuanfu acquired Xi’an Quinchuan Auto, which was renamed “BYD.”
In 2005, BYD launched the F3, one of the first cars they released. At that time, the company did not limit itself to EVs but also developed hybrids—which it continues to do today.
In 2008, BYD released the F3DM, a plug-in hybrid. Then, in 2009 they released the battery-powered e6 (pictured).
During the next twelve years, BYD worked to refine its craft. The company was not an overnight sensation, even though it may seem that way to American observers today.
Regardless, in 2020, they released the BYD Han, a sleek-looking four-door car (pictured).
Then, they entered European markets. In 2021, Daimler AG reduced its stake in BYD to 10 percent, a move partially influenced by the Chinese government’s desire for less foreign ownership in the company. At this point, BYD Auto controlled 90 percent of itself.
Following this, they announced more vehicles like the Denza Mini Van (pictured).
In 2022, they released the Platform 3.0, a quick vehicle similar to Fisker models. They announced the cars would be faster with more efficient batteries and would develop self-driving capabilities in the future.
In 2023, BYD released the Seagull (pictured), its smallest and cheapest car to date, similar to the “Smart” cars popular in Europe. The Seagull sold 200,000 units in 7 months, making BYD a “big gorilla” in the EV space.
BYD didn’t come out of nowhere; it spent years building itself up until it really showed its power and potential with the Platform 3.0.
“China Unite” vs. World (and Tesla)
The Chinese government sent out a declaration: China must Unite against the rest of the world (essentially meaning Tesla).
On the US stock market, BYD has an ADR (American Depository Receipts), which gives investors access to stocks in an overseas company.
As of January 11th, BYD had an American stock value of $53.68, following a burst in 2021 that hasn’t subsided.
Now, BYD has a real market presence, as well as a feud with Tesla. And this isn’t just any market feud like the battle between Tesla and GM, Ford, or Stellantis; this is a struggle for world domination over EV leadership.
In Q3 of 2024, BYD sold 432,000 electric vehicles. Tesla sold 435,000. BYD unit sales are up roughly 70 percent, while Tesla’s unit sales are up about 46 percent.
Moreover, in Q4, BYD sold 526,000 EVs while Tesla sold 484,000. This marks the first time Tesla, an American company, isn’t number one in EV sales.
Despite the fact that Tesla is an American company, and despite the fact that China actively opposes America’s free market model and is officially our major “competitor” according to the Pentagon, some American politicians don’t seem concerned. Elon Musk, after all, is the owner of X, which aims to be a free speech platform that rejects politicians’ calls to “cancel” members of the opposite party.
California Governor Gavin Newsom (D) visited China in October 2023 and got to drive around a BYD Yang Wang U8 and said he’ll “take two.” Many took this as an insult to Tesla and the thousands of American factory workers and managers it employs in California and throughout the country.
Financial news site The Motley Fool published an article on January 8th saying there are only two EV stocks to buy: the ADR of BYD and Tesla. The EV stock to avoid is Lucid, which, as the Biz Doc has already covered, is facing its fair share of problems.
Then, CNBC reported that analysts prefer BYD to Tesla, predicting that it has a 70 percent upside over the next two years.
However, what people are failing to point out is that Tesla exceeded sales expectations for 2023, while BYD failed to reach theirs.
Biz Doc’s Lessons for You and Me
Biz Doc tells viewers to be vigilant. The “international” is everywhere, and you should view the sector you work and invest in with a global perspective to be ahead of the game.
If you are a business leader, you should be PARANOID. Paranoia can be your friend.
Read Intel founder Andy Grove’s book Only the Paranoid Survive. Being paranoid and always remaining on top of the news cycle can help you make the right choices for your team. You need to pay attention to your competitors both within and outside the country.
That brings Tom to his last point: you should Think Outside the Country. There are many different options presented to a business leader: customers, investors, and suppliers. It’s a global world and you should take advantage of it. Take time to pay attention.
Soon, Biz Doc will be releasing a deep dive into how Chinese companies like BYD are playing with an unfair advantage thanks to the Chinese Communist Party and its “closed” approach to markets.
Subscribe to his YouTube channel to get that video sent straight to your homepage when it drops.
Shane Devine is a writer covering politics, economics, and culture for Valuetainment. Follow Shane on X (Twitter).
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