China's BYD is quickly gaining on Tesla, the world leader in electric car sales.
It's already sold twice as many EVs this year as it did in 2021.
BYD, backed by Warren Buffet's Berkshire Hathaway is planning two new premium brands.
Tesla has long dominated global sales of electric cars. But a Chinese newcomer is quickly gaining on Elon Musk's empire.
BYD started selling gasoline cars back in 2003 before expanding into hybrids and all-electric vehicles. This year, it kicked combustion-engine cars to the curb and has grown its EV business at an explosive pace. Pretty soon, it could sell more all-electric cars than anyone else.
In 2021, the Warren Buffet-backed carmaker shipped some 320,000 pure electric vehicles (not including the plug-in hybrid vehicles that still make up much of BYD's sales). This year, it's furiously accelerated output: In the first 11 months of 2022, it's more than doubled last year's numbers, shipping out roughly 800,000 EVs.
It hasn't quite caught up yet: Tesla notched 908,573 deliveries worldwide through September (it releases numbers quarterly) and is on track for an annual record of its own. Plus, Tesla's profit margin per vehicle dwarfs BYD's.
BYD's epic rise comes amid signs that Tesla is losing steam in China, the world's biggest market for electric cars. In October, Tesla discounted its cars in China. This week, Bloomberg reported that Tesla is slowing production at its Shanghai factory, potentially signaling decreased demand for its vehicles. (Tesla disputes the report.)
Some industry watchers like Michael Dunne, founder of the EV industry consultancy ZoZoGo, think BYD is primed to become the EV sales leader and dethrone Tesla. But comparing them is a bit like comparing apples to oranges, he says.
"It's like asking, 'will Toyota surpass Mercedes in overall sales?' Yeah, because Toyota has a full spectrum of vehicles that go from $20,000 to $80,000," Dunne told Insider. "And the lower the price point, the bigger the market of course."
BYD has a few advantages that will propel it to market dominance by 2025, according to Dunne: While Tesla is solidly a luxury brand - its cars go for around $50,000 and up - BYD sells vehicles under multiple brands and at several price points. The automaker is also one of the world's leading battery manufacturers.
BYD has been in business since 1995. And in addition to cars, it makes electric buses, trucks, and forklifts.
And the Chinese firm is expanding into Tesla's turf in more ways than one. In November, the company announced plans to launch two new high-end brands. This is part of an effort to shed its identity as a maker of affordable cars and become a more aspirational brand in China, Dunne said.
It's also expanding its reach far beyond its home country. BYD recently started selling cars in Europe, and it's targeting Mexico and Japan in 2023.