BYD's Onslaught... Chinese Electric Cars Are Running

BYD Surpasses Volkswagen as China's Top Seller
Hongguang Mini EV Becomes Best-Selling Model
Norway Market Share Nears Korea
Concerns Over Intensifying Budget Segment Competition

[Asia Economy Reporter Choi Dae-yeol] BYD, China's largest electric vehicle manufacturer, became the top-selling brand in China last month. According to foreign media such as Automotive News on the 1st, BYD sold 152,863 units from the 1st to the 27th of last month, surpassing Volkswagen's 143,602 units.

This is the second time since last October that a local brand in China has overtaken foreign brands in sales volume to claim the number one spot. China has long been the world's largest automobile production and sales country, with foreign manufacturers entering through local joint ventures, and foreign brands have dominated the top sales rankings. Recently, however, the trend has changed. As electric vehicles with improved product competitiveness have become widely sold, local companies and brands have surged ahead. BYD's strong performance is not a 'surprise result.'

In addition to BYD, many local manufacturers are actively developing and selling electric vehicles. Based on last year's global sales of battery electric vehicles (BEVs), Shanghai GM Wuling's compact electric vehicle Hongguang Mini EV ranked second after Tesla. This year, from January to October, it has sold over 410,000 units, making it highly likely to become the best-selling model among all local vehicle types annually. Last year, this vehicle was second, trailing Nissan's internal combustion engine-based compact sedan.

BYD's new electric SUV Atto3, launched in India this October

The rise of electric vehicle manufacturers and models in the top ranks of automobile sales in China is due not only to policy support such as subsidies and tax benefits but also because it is easier to enhance vehicle competitiveness compared to internal combustion engines, leading to fierce development and promotional competition centered on local companies. The basic vehicle manufacturing infrastructure is well established, and the battery ecosystem, considered a core component of electric vehicles, is also world-class. As of October this year, China's electric vehicle penetration rate is 23.4%, the highest among major global markets.

Competition with Korean-made cars has also become inevitable. Until now, Korean automakers did not consider Chinese cars as direct competitors in global markets outside China, but with the shift toward electrification, this is no longer avoidable. In Norway, where 70-80% of all vehicles sold are electric, BYD's market share as of the fourth quarter this year is about 1.3%. Although this is less than brands with strong local demand such as Volkswagen and Tesla, Korean brands like Kia (1.6%) and Hyundai (3.8%) have closely followed.

Electric Vehicle of Nio, China

Leveraging strong domestic sales to build capabilities, exports are gradually increasing. Nio, considered one of the three major electric vehicle startups along with Li Auto and Xiaopeng, recently began selling high-end models in Denmark following its existing mid-to-low priced models. Nio is also reportedly considering exporting some electric vehicle models to the United States.

Dongfeng's high-end electric vehicle brand, Voyah, recently opened a store in Norway, and China's Great Wall Motors has started exporting plug-in hybrids to Germany, the largest automobile manufacturing country in Europe. According to the Korea International Trade Association, China's electric vehicle exports from the first to third quarters of this year amounted to $11.84 billion, more than doubling compared to the same period last year.

An industry insider said, "Tesla and Mercedes-Benz recently lowered electric vehicle prices in China by several million won to tens of millions of won, which, despite targeting different customer segments, indicates that the price competitiveness and volume offensive of Chinese local companies are formidable," adding, "Competition with Korean electric vehicles will intensify even in the affordable electric vehicle market."