In July, China’s BYD solidified its position as the leader in China-made electric vehicle (EV) sales, outpacing its U.S. rival, Tesla, as customers opted for its more affordable EV models. Industry data revealed that Tesla’s sales of China-made vehicles experienced a notable 31% decline from June, attributed to the company idling some production lines in preparation for the launch of a revamped Model 3.
According to data from the China Passenger Car Association (CPCA), Tesla sold 64,285 China-made EVs in July, a significant 128% increase compared to 28,217 units sold in the same period last year. The previous year’s production was curtailed due to a scheduled factory upgrade at Tesla’s Shanghai facility, a practice the company traditionally follows during the summer.
On the other hand, BYD witnessed a remarkable 61% year-on-year rise in July sales, selling 261,105 passenger vehicles, including 18,169 units that were exported. BYD’s success can be attributed to the popularity of its Dynasty and Ocean series of EVs, along with its petrol-electric hybrid vehicles.
CPCA is expected to release comprehensive data for July later this month, with estimated new energy passenger vehicle sales in China reaching 750,000 units.
Throughout the year, Tesla has focused on prioritising sales growth over profit, a strategy that has bolstered its popularity in the world’s largest auto market. Despite Chinese brands capturing over 50% of their home market in sales during the first half of the year, Tesla managed to increase its market share and deliver a record 156,676 China-made EVs in the second quarter.
To maintain its competitive edge, Tesla initiated a price war in China by slashing prices at the beginning of the year. This move triggered a response from more than 40 other brands in the country, further intensifying competition.
In July, Tesla offered cash bonuses on top-selling models in China as part of a global customer referral incentive, subsequently leading to a new round of price cuts followed by General Motors (GM.N) and Volkswagen.
Although Tesla has shown impressive growth in the Chinese market, BYD managed to outsell the American automaker by 29% in EV sales during the first half of the year. Additionally, BYD’s lower-priced Dolphin EV surpassed Tesla’s Model 3, which is slated for a revamp in September.
Other Chinese EV startups like Nio and Xpeng also experienced a rebound in deliveries in July, driven by the ramped-up distribution of newly launched SUV models ES6 and G6.
With China’s post-COVID-19 economic recovery losing steam, authorities have introduced measures to boost sales of big-ticket items like cars. In June, they extended the purchase tax break on new energy vehicles (NEVs) until 2027, aiming to encourage further adoption of environmentally friendly automobiles.
