In 2023, BYD, a company backed by Warren Buffett, experienced a remarkable surge in its electric vehicle (EV) sales. They sold a total of 1.57 million electric vehicles, representing a substantial 73% increase from the previous year. Notably, during the last quarter of the year, BYD achieved impressive sales figures, specifically selling 525,409 battery electric vehicles (BEVs).
While Tesla maintained its position as the leader in total electric car sales for 2023, with 1.8 million units sold, BYD’s rapid growth stands as a clear indication of China’s growing dominance in the global EV industry.
China’s robust support for the electric vehicle sector has been instrumental in the country’s remarkable rise in EV production and sales. The government set an ambitious target, aiming for at least 20% of new cars sold annually in China by 2025 to be classified as new energy vehicles (NEVs). Surpassing expectations, China achieved this goal in 2022, three years ahead of schedule.
Several factors contribute to China’s leadership in the global EV market, including its expansive domestic market, cost-effective labor, and a strong grip on the supply chain. Chinese automakers, including BYD, are making significant strides in international markets, causing concern among traditional rivals such as Volkswagen and Renault. In response, the European Union has initiated an investigation into Chinese state subsidies.
As part of its rapid transition to electric vehicles, China has set an ambitious target for NEVs, encompassing BEVs, plug-in hybrids, and hydrogen fuel cell vehicles, to constitute the “mainstream” of new car sales by 2035.
Recent data from the China Association of Auto Manufacturers reveals that, in the first 11 months of 2023, new energy vehicles accounted for over 30% of total car sales, amounting to 8.3 million units sold.
Miao Wei, the former minister of China’s Ministry of Industry and Information Technology, has expressed confidence that China may achieve its NEV penetration target of 50% by 2035 as early as 2025 or 2026.
This optimistic outlook reinforces China’s pivotal role in the global electric vehicle industry, leveraging its market scale and early-mover advantage to establish dominance in both production and innovation. Analysts from Natixis Asia, a French investment bank, underscore China’s leading position, stating, “China is now leading in production and increasing its comparative edges.”
