In the U.S., Tesla may be at the forefront of the electric vehicle revolution, but abroad, the carmaker has some serious competition. In China, the world's largest EV market, Tesla has been losing ground to domestic automakers who are increasingly building better cars at unbeatable prices, and chief among them is Warren Buffett-backed BYD.
In the fourth quarter of 2023, BYD dethroned Tesla as the world's top EV maker, selling more battery-powered vehicles than its U.S. rival.
"BYD has grown into this powerhouse in the new energy vehicle industry," CNBC's Beijing correspondent Evelyn Cheng said. "When you look at the monthly rankings, they're always at the top."
Founded by Wang Chuanfu, BYD started making batteries for mobile phones back in the 1990s. By 2003, the company had pivoted to autos and has since become the top car brand in China, as well as a major producer of EV batteries.
"They are one of the top companies in the world building lithium-iron phosphate batteries," Sam Abuelsamid, principal analyst at Guidehouse Insights, told CNBC. He also explained the advantages over lithium-ion batteries, saying they are long-lasting and "cost about 30-40% less per kilowatt hour to manufacture."
Part of BYD's mass appeal is price. Many of its cars undercut the competition, with several models starting under $20,000.
"In Munich just a few months ago, they launch the Seagull, priced at $11,500," Michael Dunne, CEO of Dunne Insights, told CNBC. "You have to double that price and then some to get an entry-level vehicle here in the United States and in Europe. So very competitive in the segment of $35,000 and under."
BYD is now aggressively expanding globally, exporting over 240,000 cars across 70 countries last year. It has announced plans for a European factory in Hungary and is reportedly looking for sites in Mexico.
"They're definitely preparing for the U.S. market, waiting for the right timing," Dunne said. "U.S. and Europe promise a profitable market for them. They have to enter and compete and win here to thrive globally."
Watch the video to learn how BYD grew from battery maker to EV giant and what's next for the company.
