Chinese EVs take off in the UK as BYD closes in on Tesla

Yahoo

2 days ago

The UK has become a pivotal market for Chinese electric vehicle (EV) manufacturers, accounting for 30% of all Chinese electric models sold across Europe.
The number of electric cars on UK roads has nearly doubled in the past two years, and nearly one in five new cars sold in 2024 was electric.
BYD (1211.HK), China's leading EV company, is at the forefront of this push, challenging Tesla (TSLA) to get the top spot in the UK. In May, the Shenzhen-based company sold just 40 fewer cars than Tesla, having surpassed it for the first time in April.
BYD's latest move in the UK market, introducing the budget-friendly Dolphin Surf, marks another chapter in its pursuit to become the world's largest electric carmaker.
Starting at £18,650, the Dolphin Surf is now one of the most affordable new vehicles in the UK. For comparison, the cheapest electric car on sale in the country, the Dacia Spring, is priced at £14,995 and offers a range of 140 miles. Other budget EVs include the Citroën ë-C3 at £18,305 and Renault's (RNO.PA) 5 model, which starts at £22,995.
The Dolphin Surf offers an official range of up to 137 miles and comes equipped with features usually found in higher-end models, such as a rotating touchscreen, intelligent cruise control, and automatic emergency braking.
The company, which started out manufacturing batteries for mobile phones, has set a new sales record in the UK, delivering 9,271 cars in Q1 2024 alone. Its success in the UK mirrors a broader surge in demand for Chinese EVs across Europe.
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In March 2024, Chinese manufacturers accounted for 30% of all electric vehicle sales in the UK, according to data from Matthias Schmidt, an electric vehicle analyst, with rivals such as Xpeng (XPEV), Leapmotor (9863.HK), and Jaecoo, owned by state-controlled Chery, also making inroads into the market.
BYD's expansion comes as the company's market capitalisation has surged to $141bn, nearly three times the value of Volkswagen (VOW3.DE), though still a fraction of Tesla's market dominance, which is valued at nearly $1tn.
BYD has expanded its sales from 400,000 cars in 2020 to more than 3.7 million in 2023. In a show of its growing ambition, BYD added 200,000 employees in 2024, more than the entire workforce of General Motors (GM).
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In Europe, Tesla is showing signs of losing momentum. In May, the company sold just 13,863 vehicles in the region, down 28% from the same period a year earlier. As Tesla's growth stalls, Chinese automakers such as BYD, SAIC (600104.SS), and others are rapidly stepping into the void.
The European Automobile Manufacturers' Association (ACEA) recently reported that SAIC, the Chinese state-owned conglomerate behind the MG brand, was the fastest-growing manufacturer in Europe. In May, SAIC sold almost twice as many cars across the region as Tesla.
Tesla's faltering European performance has been further compounded by a growing boycott, fuelled by CEO Elon Musk's controversial political stances.
The electric vehicle maker, once the darling of the EV revolution, has seen its stock plummet by 25% so far this year.
Investors are concerned about the damage to the Tesla brand in Europe, where sales have fallen sharply, and in the US, where Musk's embrace of right-wing politics has alienated a segment of consumers.
There have been protests outside dozens of Tesla dealerships in the US, Canada, the UK, Germany and Portugal.
The day Musk announced plans to form a new political party, Tesla lost more than $68bn in market cap.
'Very simply Musk diving deeper into politics and now trying to take on the Beltway establishment is exactly the opposite direction that Tesla investors/shareholders want him to take during this crucial period for the Tesla story,' Dan Ives, global head of technology research at Wedbush Securities, said in a note on Sunday.
'While the core Musk supporters will back him at every turn no matter what, there is broader sense of exhaustion from many Tesla investors that Musk keeps heading down the political track.'
Tesla's plummeting deliveries in a steadily growing global EV market come despite Musk saying in April that sales had turned around.
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In a bid to boost demand, Tesla recently refreshed its top-selling Model Y crossover. However, the redesign came with a production halt and caused many potential buyers to delay their purchases, waiting for the updated version.
Meanwhile, rivals like BYD and Chery are speeding past Tesla, each increasing their global sales by approximately 40% in 2024, as Musk's company experienced its first annual sales decline.
Last month, smartphone giant-turned EV maker Xiaomi (1810.HK) launched its YU7 electric SUV in May, racking up over 240,000 preorders in just 24 hours. Likewise, Chinese startup Xpeng unveiled its G7 SUV, a direct rival to the Model Y, which also saw strong early demand. Both of these vehicles are priced competitively below the Model Y in China.
The shift in global EV sales patterns is a sign of China's rising influence. From 2020 to 2024, foreign automakers such as Volkswagen, Toyota (7203.T, TM), and GM (GM) saw their sales in China drop from 9.4 million units annually to 6.4 million, according to data provided to Reuters by consultancy Automobility. During the same period, China's domestic automakers — BYD, Geely (80175.HK), and others — saw their sales more than double, rising from 4.6 million to 9.5 million.
This shift is partly driven by the aggressive pricing strategies of Chinese automakers. For instance, BYD now offers 0% APR deals in Europe, a tactic that Tesla once employed to attract buyers. The BYD Dolphin, priced from £279 per month with 0% APR, is drawing attention, as is the BYD Atto 3, which starts at £399 per month with a £3,100 deposit contribution and dealer discounts. In comparison, Tesla's vehicles, like the facelifted Model Y, start at £399 per month with a £6,100 deposit and a 2.9% APR rate.
Tesla remains a dominant player in the global EV market but is increasingly facing competition, especially in Europe and China. Musk's controversial political moves have added another layer of uncertainty, leaving investors to question the company's future. The key challenge now is whether Tesla can gain speed or be overtaken by rivals.Sign in to access your portfolio