World's 5th Largest BYD Overtakes Tesla... The Secret Weapon of Electric Cars Is 'This' [Business & Issues]

Ranked 5th in Global New Car Sales in 4Q 2024
Expectations Rise for '5-Minute Charging' Long-Range Battery
US and EU Tariff Attacks... Will Circumvention Exports Be Blocked?

AFP·Yonhap News

Chinese electric vehicle manufacturer BYD's new car sales in the fourth quarter of last year ranked 5th globally for the first time ever. BYD also solidified its position as the number one electric vehicle company by surpassing Tesla in total sales last year. While Tesla has been affected by boycott movements in the US and Europe, BYD has raised expectations for future sales growth by launching new ultra-fast charging electric vehicle models. However, concerns are emerging that strategies to bypass tariff barriers through overseas factories may become difficult as the US and the European Union (EU) begin investigating suspicions of offshore subsidies from the Chinese government to BYD.

4Q New Car Sales Ranked 5th Last Year... Surpassed Tesla in Annual Sales

On the 29th, the Nihon Keizai (Nikkei) newspaper analyzed statistics from automotive market research firm MarkLines and reported that BYD ranked 5th globally in new car sales for the fourth quarter of last year for the first time. The ranking was led by Toyota (2.92 million units), followed by Volkswagen (2.5 million units), Hyundai-Kia (1.83 million units), General Motors (GM, 1.74 million units), and BYD (1.52 million units). This is the first time a Chinese company has entered the top five since the related statistics began being compiled in 2004.

Tesla, BYD's biggest competitor in the electric vehicle sector, recorded new car sales of only 495,570 units in the fourth quarter, failing to enter the top 10. For the entire last year, BYD achieved total sales of $107 billion (approximately 156.9 trillion KRW), becoming the first electric vehicle company to exceed $100 billion in sales. Tesla's sales amounted to $97.7 billion.

It is evaluated that BYD succeeded in expanding sales by popularizing its low-cost electric vehicle models in the Chinese market. BYD's total electric vehicle sales last year also surged 43.4% year-on-year to 4.137 million units. Nikkei explained, "As sales of electric vehicles (EVs) and plug-in hybrid vehicles (PHVs) increase in China, an environment favorable to BYD, which has strengths in low-cost vehicle batteries, has been created."

Stock Price Surges 42% Since Early Year... Expectations for '5-Minute Charging' Battery

As sales growth continued, BYD's stock price also rose significantly. On the 27th, BYD's stock price on the Shenzhen Stock Exchange reached 386.50 yuan, a 42.5% increase from 271.10 yuan at the beginning of the year. The stock price jumped especially after BYD announced the development of a new battery and electric vehicle platform that drastically reduces charging time.

BYD CEO Wang Chuanfu stated at a presentation held on the 17th, "We have developed a new 'Super E Platform' that allows continuous driving for 400 km with just 5 minutes of charging," adding, "An era has come where refueling and electric charging can be done at the same speed. We plan to build 4,000 new ultra-fast charging stations and improve the fast-charging capabilities of existing public charging stations to solve the driving range issue."

BYD has started pre-sales of vehicles equipped with the Super E Platform at a minimum price of 270,000 to 280,000 yuan (approximately 54 million to 55 million KRW). If the technology enabling 400 km driving with 5 minutes of charging is commercialized, it is expected to surpass competitors such as Tesla's Supercharger, which allows 275 km driving with 15 minutes of charging, and Mercedes-Benz CLA electric vehicle, which allows 325 km driving with 10 minutes of charging.

Nomura Securities of Japan explained, "If BYD succeeds in reducing charging time to a level similar to refueling time for internal combustion engine vehicles, its competitiveness to challenge the traditional internal combustion engine vehicle market will increase. Considering the strengthening of China's transportation department's policies supporting electric vehicles and charging stations, the electric vehicle adoption rate in China is expected to improve further this year. BYD will be one of the major beneficiaries."

US and EU Tariff Attacks Intensify... Concerns Over Blocked Circumvention Exports

The Blade Battery developed by BYD for electric vehicle use. BYD official website

However, as BYD emerges as the global number one electric vehicle company, it is expected that US and EU scrutiny will intensify, raising concerns about potential trade friction damages such as tariff issues in the future.

According to the Financial Times (FT), the EU has launched an investigation into allegations of unfair competition regarding BYD's electric vehicle factory being built in the Szeged region of southern Hungary. The factory is suspected of unfairly receiving offshore subsidies from the Chinese government. Since 2023, the EU has introduced the Foreign Subsidies Regulation (FSR), which imposes sanctions such as subsidy repayment, fines, and partial asset sales if a specific government illegally provides subsidies to overseas factories.

In October last year, the EU determined that there were unfair competition issues related to Chinese electric vehicles and confirmed the imposition of additional tariffs of up to 35.3% on top of the basic 10% tariff, with BYD facing an additional tariff rate of 17%.

The factory is BYD's first production base in Europe, with investments starting in January 2024. It involved 4 billion euros (approximately 6.33 trillion KRW). The plan is to begin operations as early as October this year and produce more than 200,000 electric vehicles annually. However, if the EU investigation results in sanctions for receiving offshore subsidies, the factory's operation start date is expected to be significantly delayed.

BYD's planned North American base factory in Mexico is also facing setbacks due to delays in approval from the Chinese government. The Chinese government is reportedly using the US-China trade conflict as a pretext to continuously delay approval. According to FT, citing sources familiar with the matter, "The Chinese government is delaying approval due to concerns that BYD's electric vehicle technology might leak to the US, which is adjacent to Mexico."