Tesla is overtaken by BYD in China

Tesla’s EV (electric car) production and sales business for the Chinese market has seen an unprecedented boom since upgrading its factory in Shanghai in July. Its Chinese Gigafactory made 77,000 Model Ys and Model 3s in August, three times higher than the previous month. Despite this boost in productivity, the company is still far from dethroning the leader BYD, which sold nearly 175,000 electric and plug-in hybrid vehicles over the same period.

In the shadow of BYD

Tesla’s leadership in the EV market in China has faded since the start of 2022. Indeed, the American manufacturer was forced to lower its production rate following the new confinements introduced by the local government in the first and second semester. In April, its factory was only able to deliver 1,521 vehicles, while the latter manufactured nearly 25,845 cars over the same period in 2021.

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To take advantage of this cyclical “pause”, Elon Musk’s company has decided to improve its assembly line. The strategy will have paid off since the Shanghai Gigafactory increased its production by 74% compared to the previous year.

If Tesla has picked up speed, its efforts remain insufficient to compete with BYD, which reigns supreme in its territory. At present, the Shenzhen giant, which is also backed by billionaire Warren Buffet, claims 16% of the Chinese market share compared to 12% for the American company.

Tesla can catch up

Tesla is on a good dynamic despite its second position in the Chinese market. Since the opening of its Berlin and Texas factories, and the relaunch of post-COVID activities in Fremont and Shanghai, the firm has boosted its performance.

According to the firm Global Equities Research, Elon Musk’s company now has the means to manufacture 500,000 cars by the end of the year. This forecast is the result of a calculation of the potential of its factories running at full speed over the past three months.

At the same time, Tesla has accelerated its investments in engineering, but also in the production of batteries. Last May, it began construction of a new factory next to the Gigafactory in Shanghai. Today, the company plans to set up a lithium refinery in Texas.

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