China’s BYD (BYDDY) reported a 21% increase in sales of electric vehicles in the second quarter, bringing it closer to Tesla (TSLA) after the American competitor regained the title of top EV vendor globally in the first quarter.
Based on its monthly sales figures, Reuters calculated that BYD sold 426,039 EVs in the April-June quarter. This is around 12,000 fewer cars than Tesla had projected to deliver in the second quarter.
As it contends with fierce competition in China and poor demand owing to a dearth of reasonably priced new models, Tesla is projected to publish a 6% loss in vehicle sales for the April-June quarter on Tuesday. This will be the first time the American company is expected to show two consecutive quarters of declines.
If real numbers are worse than anticipated, the business may once more lose its lead in EV sales to BYD. Barclays is projecting the largest-ever dip in Tesla deliveries—11%—for the second quarter.
After years of explosive expansion that helped position it as the most valuable car company in the world, Tesla has encountered a roadblock. It issued a warning in January that 2024 would see “notably lower” deliveries growth as the effect of months-long price reductions would diminish.
According to a May report, the EV manufacturer has reduced production of its best-selling Model Y electric car by a double-digit percentage at its Shanghai plant since March in response to declining demand for its older models in China, which is its second-largest market after the US.
In contrast, the leading Chinese rival BYD continued to see moderate increase in its EV sales, while EV upstarts like Nio had exceptional growth in the most recent quarter. In the second quarter, NIO delivered 57,300 vehicles, more than doubling its previous high.
Cui Dongshu, secretary general of the China Passenger Car Association (CPCA), stated that the primary causes of Chinese EV manufacturers’ robust sales in recent months have been price reductions and a growing change in consumer demand away from gasoline-powered vehicles and toward EVs and hybrids.
According to CPCA data, sales of new energy vehicles, such as plug-in hybrids and electric cars, accounted for 46.7% of all car sales in China in May, setting a new monthly record.