BYD, one of the biggest Chinese electric vehicle (EV) producers, has seen higher sales figures through more car trade-ins in China, edging it closer to its 2024 sales target.
Chinese electric vehicle (EV) manufacturer BYD is on track to sell more cars than established rivals Honda and Ford in 2024, as the company appears to be about to beat its 2024 sales target of four million units.
According to data filed with the Hong Kong Stock Exchange (HKSE), BYD sold 506,804 vehicles in November, its fastest-growing month this year. This took its overall sales so far this year to around 3.7 million units, a leap of 40% compared with the same period last year.
In contrast, Ford sold about 3.3 million units in the first nine months of the year, with Honda selling approximately 3.11 million vehicles between January and October 2024.
BYD’s sales this year have mainly been boosted by plug-in hybrids, which have seen a surge of almost 70% so far this year, compared with the same period in 2023.
Measures taken to keep car sales going in China
In November, BYD sales primarily increased because of a high number of auto trade-ins, which are subsidised by the Chinese government. This is an attempt by the government to invigorate the car market, as well as enhance consumer spending and prop up the economy.
The company’s strong performance has also impacted other major car manufacturers such as Tesla, which has seen its November sales in China drop, as it continues to lose Chinese market share to BYD.
BYD has also benefited because of foreign car manufacturers struggling more in China recently. Companies such as Stellantis, Honda, Toyota and Nissan have had to shut down Chinese factories and cut jobs over the past few months, as they pull back on the production of vehicles with traditional combustion engines.
Similarly, Volkswagen has also had to scale back on its Chinese operations, by selling its Xinjiang operations, leaving BYD with more market share.
Apart from its domestic Chinese market, BYD has also been steadily gaining market share in Europe, as well as other countries such as Thailand, Japan and Mexico, during the past few months. Much of its popularity is because of its relatively lower price compared to European models, as well as its sleek design and range of features.
The company, as well as other Chinese car makers such as Geely and SAIC have also consistently been improving their quality, taking care to strengthen safety features, and rectify quality issues.
Given the ongoing rise in cost of living seen in many parts of the world currently, BYD has seen a surge in interest from buyers wishing to switch to electric vehicles, but at a cheaper price point.
BYD could still face a bumpy road ahead
Although BYD has seen relatively robust performance in the last few months, some challenges still remain. One of the biggest challenges recently has been the EU imposing higher tariffs on Chinese electric vehicles imported into the bloc.
This move followed allegations of the Chinese government subsidising domestic EV makers, thus allowing them to sell their vehicles at much cheaper prices in Europe, which in turn, undermines European car makers. BYD now faces an additional EU tariff of 17%, on top of the usual 10% tariff on battery-electric vehicles imported into the EU.
This could potentially undercut its European market share over the next few months, by making it more expensive for European consumers to buy the company’s models.
BYD’s brand recognition in Western markets is also still not very strong yet, which often means that several Western consumers prefer paying more for a brand they recognise and trust more, rather than to choose a relatively unknown foreign brand.
In certain cases, BYD’s offerings are priced only slightly lower than other popular brands, such as Volkswagen’s, which may not always be enough to convince buyers to choose them.
The ongoing EU-China and US-China tensions have also caused increased anxieties about supply chain concerns, when it comes to Chinese brands, in case of escalating trade wars.
Several Chinese EV models, including BYD’s have also faced a number of software issues, as well as quality concerns. Although companies have taken several steps to improve these recently, they may still remain a concern for buyers.
