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    How BYD Is Pulling Tesla Away

    Jul 19,2022 | Chloe Lacour

    While the Americans at Tesla are struggling with production difficulties, the Chinese competitor BYD is setting new sales records. Technologically, experts see the two groups as equals.

    Tesla has been struggling with significant problems in China in recent months. Because the factory in Shanghai was affected by the major lockdown, the US automaker is estimated to have sold 80,000 to 100,000 fewer cars than originally planned.

    This was also the main reason why Elon Musk's group fell behind the Chinese electronic top dog BYD in terms of its global sales for the first time in three years. While Tesla sold 564,000 cars worldwide in the first half of the year, the Shenzhen group was able to sell 641,000 vehicles. That is 300 percent more than in the previous year.

    Of course, the comparison between Tesla and BYD is not entirely fair. Because while Tesla only produces premium electric cars, about half of the vehicles produced by BYD are still plug-in hybrids. In addition to a large battery, they also have a combustion engine. There is also geographic luck: BYD builds the majority of its vehicles in Shenzhen in southern China, which was less affected by tough corona measures than Shanghai.

    Nevertheless, there is little doubt among car experts that BYD will continue its steep success story and will also pose the greatest challenge outside of China for both Tesla and the German premium manufacturers in the future. US investor Warren Buffett apparently had the right instinct when he took an eight percent stake in BYD back in 2008. The Hong Kong-listed company's share price has since risen more than twenty-fold. It was not until the end of June that the papers marked a new all-time high.

    Founded in the mid-1990s by former university professor Wang Chuanfu, BYD began as a rechargeable battery manufacturer before expanding into the automotive industry in the early 2000s. The company is benefiting more and more from the fact that BYD manufactures its own batteries and has invested heavily in research.

    BYD has evolved significantly over the past five years and positioned itself higher, according to German auto expert Ferdinand Dudenhöffer. The vehicles are modern, often state-of-the-art, and therefore also clear competitors for the German premium manufacturers in China.

    A key point is BYD's extensive battery know-how, which is expressed, for example, in the so-called blade battery. These are large-format prismatic cells that allow significantly higher energy densities in the same volume. "BYD represents the pinnacle of development here," says Dudenhöffer.

    Dudenhöffer believes that BYD is also very innovative when it comes to integrating the battery into the vehicle and is already using what is known as cell-to-chassis technology. Here, the batteries are connected directly to the chassis, which can reduce the weight of the car. Tesla also does cell-to-chassis. However, BYD is clearly ahead of Mercedes and BMW.

    According to the German car expert, the rising sales figures are not a flash in the pan. "BYD will soon also draw attention to itself in Europe," concludes Dudenhöffer, who also concedes good opportunities for other Chinese manufacturers. SAIC, FAW, XPeng, Nio, Geely, Lynch & Co, and Polestar showed how strong the Chinese are and how they are gradually developing in the western car markets. "We are entering the phase in which the Teslas are learning from China," Dudenhöffer is convinced.

    BYD already sells electric buses in Europe, Japan and India, and is taking steps to launch regular vehicles in Europe, Australia, Latin America, and the Philippines. Just earlier this month, the Chinese signed a contract with Dutch car dealer Louwman. BYD is also currently examining its options in Southeast Asia.

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