This Week in Asia #1: Elon Musk's Tesla is beaten by China's BYD
To start our new year of 2024, we will start with a story each week but provide an in-depth look into the company. This newsletter will be continuously iterated and your feedback is important. Every week, we dived deep into one key story. This week, we start with the electric vehicle wars in Asia, where Tesla's electric vehicle production is overtaken by China's BYD. Who is BYD and why do they matter?
The Key Story of the Week Across Asia
Tesla Falls Behind China’s BYD in Quarterly EV Sales for First Time: Tesla delivered about 1.81 million vehicles worldwide in 2023, hitting its full-year target, though its growth rate was slowed slightly by Rebecca Elliot from Wall Street Journal (Needs Subscription) and China's BYD caps big year by surpassing Tesla in quarterly sales by Takafumi Hotta and Shizuka Tanabe from Nikkei Asia Review.
Who leads BYD? Wang Chuan Fu is known as "The Chairman" and he has an extensive profile written in FT recently. Similar to Elon Musk, he does not believe in work-life balance and demands "hardcore" behaviour from his employees, meaning 996 on steroids. One of his core strengths is the "ruthless" cost-cutting. If you want a comparison, the late Charlie Munger (and Berkshire Hathaway is an investor) placed him with Thomas Edison mixed with Jack Welch. [Source: FT]
Interesting data comparison: BYD sold 3.02m of automotive vehicles worldwide, 62% YoY growth and only 8% of total sales are outside of China, which is now in Japan, Southeast Asia and Europe. It surpassed Japan's Suzuki Motor with 2.96m units worldwide in 2022 [Source: Nikkei]
Our take: China is rinsing and repeating the strategy of dominating solar panels and applying that to EVs. BYD and Tesla are both vertically integrated companies but BYD has the battery advantage and mass production scale that Tesla is lacking. BYD has a presence in the United States and will be a significant competitor to Tesla in the US market at some point. [Source: BYD US website]
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