On October 30, Chinese electric vehicle (EV) manufacturer BYD announced its financial results for the third quarter of 2024, revealing a significant milestone: BYD’s quarterly revenue has, for the first time, surpassed long-standing industry leader Tesla. BYD’s revenue reached 205 billion RMB (about $28.2 billion) this quarter, while Tesla’s was 183.5 billion RMB (around $25.2 billion). This shift signals not only BYD’s rise in the global EV market but also a broader reshaping of power dynamics in the new energy vehicle sector.
Over the past decade, Tesla has undeniably led the global EV trend, selling a record-breaking 1.84 million units in 2023 and achieving a profit margin of over 20% in multiple quarters. However, Tesla’s revenue growth has recently shown signs of slowing; in Q3 2024, it reported only a 9% year-on-year increase, falling short of market expectations. In contrast, BYD’s revenue rose by a notable 45% during the same period, highlighting its advantage in market expansion and production capacity.
Tesla’s “top-down” product strategy, which focuses on high-end models, helped it establish a premium brand image but left it vulnerable in the mid- to low-end market. In Q3 2024, Tesla’s average selling price for the Model 3 and Model Y remained above $40,000, while BYD’s EVs averaged around $25,000. This price difference has given BYD a strong foothold in China and emerging markets like Southeast Asia, rapidly expanding its market share.
BYD’s success is no accident. It has built a fully integrated supply chain that covers everything from battery production and semiconductor design to complete vehicle manufacturing. In 2024, BYD’s Blade Battery shipments reached 300 GWh, accounting for 40% of the global market. This vertical integration has allowed BYD to significantly reduce production costs, improve profit margins, and maintain a stable supply chain amid global disruptions. Tesla, by comparison, is still dependent on external suppliers for many components, which restricts its production capacity and increases costs.
BYD’s flexible market strategy has also enabled it to capture global market share. In 2024, BYD saw a 300% increase in sales in Southeast Asia and rapidly gained traction in several South American countries. Additionally, BYD’s high-value, feature-rich models have helped it steadily grow its share of the Chinese market, accounting for 40% of domestic EV sales in the third quarter—far exceeding Tesla’s 10%.
Government policies and market conditions have also played a crucial role in BYD’s rise. China’s government has consistently supported the EV industry with subsidies, infrastructure investments, and purchase tax reductions, creating one of the world’s most extensive support systems for EVs. For example, in 2024, new policies extended tax incentives and increased funding for battery technology research. While Tesla has a manufacturing presence in China, as a foreign brand, it is not eligible for some of these local incentives, adding to its cost pressures.
On the international stage, BYD has benefited from favorable policies in multiple regions. Plans to phase out fossil fuel cars in Europe and Southeast Asia have created a surge in EV demand, and BYD has capitalized on this with competitively priced, feature-rich models. In 2024, BYD’s EV sales in Thailand grew by 500% year-on-year, and it achieved 200% growth in the Indian market. In contrast, Tesla has been slower to establish a strong presence in these emerging markets, allowing BYD to take the lead.
BYD’s rise reflects a fundamental transformation in the global EV market. For many years, American and European car brands dominated in technology and influence, but BYD’s ascent shows that Chinese brands are rapidly catching up in both areas. BYD’s Blade Battery, known for its safety and longevity, has become a key technology that other global carmakers, including Mercedes-Benz and Volkswagen, are now adopting. This technological advancement underscores China’s growing influence and competitiveness in the EV sector.
Despite its recent success, BYD still faces significant challenges. Continued innovation will be crucial, especially in areas like intelligent driving and autonomous technology. While BYD has excelled in battery technology, its advanced driver-assistance systems (ADAS) and smart cockpit features still have room for improvement. In contrast, Tesla has invested heavily in these areas, and its Full Self-Driving (FSD) system remains a major competitive advantage.
Moreover, BYD’s global brand image and customer loyalty need strengthening. In mature markets like North America and Europe, Tesla’s premium brand influence remains strong, and it will take time for BYD’s high-end models to gain acceptance. Additionally, as more traditional automakers like Hyundai in South Korea and Volkswagen in Germany accelerate their EV transitions, the competitive landscape will only intensify. BYD must continue leveraging its supply chain advantages and innovating to meet changing consumer demands.
BYD’s breakthrough, surpassing Tesla in revenue, marks the beginning of a new era in the global EV industry—one characterized by greater diversity and intense competition. Tesla is no longer the sole leader; new forces like BYD are invigorating the industry and introducing fresh dynamics. The global EV market’s future will be more diverse and competitive, and BYD’s historic achievement may just be the start of this transformation.