Tesla loses electric car crown to Chinese rival backed by Warren Buffett

·3 min read
Assembly line at BYD's new manufacturing base on June 30, 2022 - VCG
Assembly line at BYD's new manufacturing base on June 30, 2022 - VCG

A Chinese firm backed by Warren Buffett has stolen Tesla's crown after selling more electric cars in the first half of this year than Elon Musk's company.

BYD, which is backed by Mr Buffett's Berkshire Hathaway, tripled production of electric vehicles in just one year. It delivered 641,000 cars in the first six months of 2022, almost 100,000 more than Mr Musk’s business.

Tesla made 565,000 deliveries between January and June, a gain on the year before but below forecasts. Bank analysts had predicted Tesla would deliver 96,000 more vehicles in the second quarter.

Shenzhen-based BYD manufactures a range of electric vehicles including cars, buses and large goods vehicles. It mainly sells buses in the UK and delivered its 1,000th electric public service vehicle in a partnership with Scottish bus builder Alexander Dennis.

Mr Musk's company lost its spot as the number one EV maker in the world after it was hobbled by a Covid shutdown at its Shanghai factory.

Assembly line workers were forced to sleep on the shop floor instead of being locked into their homes as part of a vain attempt to keep up production numbers.

Tesla delivered 255,000 vehicles between April and June, down from the 310,000 it shipped in the first three months of 2022.

Mr Musk laughed at BYD and Mr Buffett back in 2011 when Berkshire Hathaway first invested in the Chinese company.

He said: "I don't think they have a great product. I don't think it's particularly attractive, the technology is not very strong."

BYD's shock jump in production highlights the increasing industrial might of China in the strategically important electric vehicle sector.

The International Energy Agency, which compiles figures on electric vehicle production, said global growth in electric vehicle sales last year was mainly driven by China.

"More vehicles were sold in China in 2021 (3.3m) than in the entire world in 2020," added the agency. Europe accounted for around 630,000 of sales.

BYD has also overtaken LG, the South Korean industrial conglomerate, as the world's largest maker of batteries for electric vehicles according to the Financial Times.

The Chinese automaker's Hong Kong-traded shares have grown 35pc over the last year, nearing a market cap of 1 trillion yuan (£123bn). Tesla's sahre price is down around 35pc so far this year, though it has a market cap of $706bn (£586bn).

Elsewhere, new data yesterday showed it was the worst June for new car sales in the UK for 26 years, as continued problems with computer chip supply held back production.

Car sales fell 24pc to 140,958, down from 186,128 a year earlier, according to figures from the Society of Motor Manufacturers and Traders.

Sales of all types of cars bar battery-powered fell. Electric vehicles grew by 16pc and accounted for one in six cars sold.

The best selling electric car last month was the Tesla Model Y, which sold 4,194, beaten only by the Vauxhall Corsa, which is also the most popular car of the year so far.

Mike Hawes, SMMT Chief Executive, said: “The semiconductor shortage is stifling the new car market even more than last year’s lockdown.

“Electric vehicle demand continues to be the one bright spot, as more electric cars than ever take to the road, but while this growth is welcome it is not yet enough to offset weak overall volumes.”

Low sales, together with a poor outlook for car buyers’ finances are likely to make grim reading for car makers and dealers, said Jamie Hamilton, automotive partner and head of electric vehicles at Deloitte

“With consumer confidence at an all-time low, real wages in decline, and record prices at the pumps, the economic headwinds are gathering. As a result, there will be some nervousness around the market in 2023,” he said.

Diesel cars saw the steepest sales decline in June, falling by almost half to just 8,003 sales.