How China's BYD overtook Tesla to become the world's biggest EV maker

Daily Mail​

6 hours ago

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In the modern era, no car maker has had such an instant impact on the UK car market like Build Your Dreams - or, as it's better known, BYD. Emerging from the virtually unknown in 2023, in less than two years it's become the Chinese electric car maker everyone can name, and the biggest EV manufacturer in the world. In doing so, it has toppled Elon Musk off the highest step of the podium, earning the moniker the 'Tesla killer' . As of March 2025, BYD's sold 11.6 million EVs to date. Tesla on the other hand has sold 7.5 million EVs. China's Geely, the owner of Volvo, Polestar and Lotus, is the third biggest EV manufacturer in the world, and yet has just 1.4 million EVs comparatively.
It seems then that BYD is the largest 'overnight success' perhaps in the automotive industry ever. After all, it hasn't just put itself on the map, it's hauled Chinese cars into the mainstream. But, as Steve Jobs once famously said; 'If you really look closely, most overnight successes took a long time.' So, how has BYD done it? How did it go from battery maker to the biggest EV brand in the world? What's the secret behind its so called overnight success? And how is it plotting to takeover the UK?
BYD was once the butt of Elon Musk's jokes - who's laughing now?
In 2011, Elon Musk naively laughed off the threat of BYD. During a Bloomberg interview, the Tesla boss scoffed: 'Have you seen their [unnamed] car? I don't think it's particularly attractive, the technology is not very strong. And BYD as a company has pretty severe problems in their home turf in China. I think their focus is, and rightly should be, on making sure they don't die in China.' And Elon wasn't the only one to disregard BYD.
China auto industry analyst Michael Dunne told The New York Times last year: 'They were the laughingstock of the industry'. But a decade after Musk's comments, BYD began exporting outside China. And by 2024, it reached an annual overseas sales figure of 417,204 units – a 71.86 per cent increase on 2023. And by 2030, BYD aims to sell half its cars outside its native land. In April, the Chinese brand officially sold more pure electric cars in Europe than Tesla for the first time on record.
BYD was a sleeping giant
BYD was founded in February 1995 by Wang Chuanfu, a Chinese chemist and entrepreneur. While Chuanfu's own story as an orphan born into one of China's most impoverished farming provinces, becoming a chemist and then the founder of BYD with an estimated net work of more than $25billion has the makings of a movie script, but it's the car company itself that interests us most. Launched in 1966, BYD was just an electric battery manufacturer based in Shenzhen, making lithium-ion batteries for mobile phones.
The growth of the mobile phone market meant BYD by the early 2000s had ridden a wave of lithium-ion battery success, providing two of the sector's biggest companies, Motorola and Nokia, with rechargeable batteries. By 2003, BYD was in the position to sidestep into the automotive industry, acquiring a small car maker called Xi'an Qinchuan Automobile. It's first combustion car, the F3, arrived in 2005, before releasing the plug-in hybrid F3DM in 2008.
Batteries are the powerhouse behind BYD's juggernaut rise
Even in today's electric car era, where there are a million EVs on UK roads and almost 60 million worldwide, every manufacturer is embroiled in a race to have the most powerful, quickest-charging and safest battery. It is the most important - and expensive -component of an electric car, and the part that everyone – from converts to naysayers – focuses on. Range anxiety, charging anxiety, cost – it all links back to the battery. Investing in batteries and their advancement was (along with hiring Audi's designer Wolfgang Egger to make BYD's cars more Westernised) Wang Chuanfu's stroke of genius and BYD's saving grace.
The 2010s wasn't kind to BYD, and with more global choice coming in, BYD had taken a hit. But fast forward to 2020 and Chuanfu had worked out how to make lithium-ion Phosphate batteries instead of the conventional lithium-ion batteries everyone was using. And so BYD introduced the revolutionary Blade battery; developed for maximum safety, durability and performance it passed the 'Nail Penetration Test' - the Mount Everest of battery tests – while increasing space utilisation by 50 per cent and delivering a range boost also of up to 50 per cent. Range was extended – a convention battery could deliver 249 miles of range while the same size Blade Battery could give you 373 miles – for a fraction of the cost of a nickel-cobalt battery.
BYD charged ahead with development and production, formulating its recipe for success. And still today, its battery and charging are so ahead of the competition that it's half the reason BYD is the world's EV leader. Only this month, BYD confirmed it's bringing its five-minute flash chargers to the UK, so EV owners can recharge in the time it takes to refill with petrol.
Backed by Beijing
Usually with success stories there's a moment when two key things come together. Whether that's two business partners joining up or two world events colliding, the effect is a catalyst. And for BYD, the fortuitous other factor was the willingness of China's government to back EV expansion to the hilt. In the mid-2000s, China realised it could never overtake Western and Japanese car makers with their established internal combustion engine legacies and so decided to (with significant risk) leapfrog the US and European manufacturers and invest heavily in EV technology.
It allowed China to build globally competitive EVs, reduce its reliance on ICE imports and tech, and help address China's pollution problem, all at the same time. To this end China doled out (somewhat controversial) subsidies between 2009 and 2023 to the tune of £170.5 billion ($230bn). BYD annual reports show a total of £1.93bn ($2.6bn) in government assistance between 2008 and 2022. However, when other factors are considered like taxi companies buying BYD taxis in Shenzhen, Rhodium Group puts the estimates between 2015 and 2020 at £3.2bn ($4.3bn).
The MIT Technology Review states that the Chinese government's propping up of both the supply and demand of EVs – via generous government subsidies, tax breaks, policy incentives, and procurement contracts – is an industry acknowledged reason that China now dominates the sector and that 'a slew of homegrown EV brands have emerged'. While it's not to say this hasn't created its own issues, notably 'unsustainable' price wars, particularly between BYD and Tesla, China is now the world's latest electric car market – and has been for nine consecutive years. In 2024, China produced an estimated 12.4 million electric cars, accounting for over 70 per cent of global production. And BYD is the spearhead of this.
Gregor Sebastian, senior analyst at Rhodium, told CNBC : 'BYD is a highly innovative and adaptive company, but its rise has been inextricably linked to Beijing's protection and support. 'Without Beijing's backing, BYD wouldn't be the global powerhouse it is today. 'Over time, the company has enjoyed below-market equity and debt financing allowing it to scale up production and R&D activities.'
You can't beat the price – cheap cars sell
BYD has always had one thing over Tesla: its cars are significantly cheaper. Tesla is outgunned on price both in China and abroad. The US maker currently offers the Model 3 and Model Y in BYD's home nation, with prices starting at 235,500 and RMB 263,500 yuan respectively. BYD on the other hand offers its Seagull city EV for just 56,800 yuan (approximately $7,800). In the UK, Tesla's cheapest new model is the Model 3 which costs £39,990. BYD though has brought its Dolphin Surf small EV to Britain for just £18,650.
But while some inexpensive cars are cheap for a reason (sorry Dacia Spring EV and its one-star EuroNCAP safety rating) BYD delivers 'competitive cars with appealing design and good specs,' Felipe Munoz, senior analyst at JATO Dynamics tells This is Money. The BYD Atto 3 starts at £37,695 on the road in the UK, saving you a sliver of money compared to the Tesla Model 3. As well as price, Munoz says BYD is so successful because it has 'a full line-up of products that include city cars, hatchbacks, sedans, and many different crossovers/SUVs.'
There are now 60 BYD dealers in the UK and counting, and six models to choose from in less than two years. Quentin Willson, Founder FairCharge told us: 'They've created a very diversified model strategy - from lower priced models to high - and discounted their prices to increase volume and eliminate competition. 'Having European factory footprints will reduce the effect of EU tariffs and make them the market leader in Europe and the U.K. Strategically BYD have made some very smart moves and outflanked Tesla with their slow-selling Cybertruck, cancellation of the Model 2 project and alienating the liberal customer base with Elon's political comments.'
BYD's brand awareness
In 2023, BYD's brand recognition in the UK was just one per cent. In 2024 it was up to 31 per cent. It also became the UK's fastest growing automotive brand last year; BYD sold over 8,700 passengers cars in the UK in 2024, an increase of 658 per cent vs 2023.
And it was mainly down to BYD's sponsorship deal with the Euro 2024 football tournament. Following England's loss in the final to Spain, BYD celebrated a brand awareness lift of 187 per cent in key European markets. Throughout half time over a billion people saw BYD's TV adverts for a month while the tournament lasted, and branding plastered pitch side.
As a result, Auto Trader, the UK's largest new and used car marketplace, found that the opening weekend of Euro 2024 sparked a 69 per cent spike in BYD search compared to a week earlier. Erin Baker, editorial director at Auto Trader said that the traffic data 'triggered a step-change in awareness of BYD little more than a year after they entered the UK market.'
How BYD plans to takeover the UK
If you thought BYD's rise has been cataclysmic up until now, the brand is set to accelerate its offensive on the UK market over the coming months. At the launch of its new Dolphin Surf this month, the Chinese brand said it is on the verge of introducing more models more quickly than any car company ever has before. Alfredo Altavilla, BYD's special advisor for Europe, said: 'I have zero problem in saying I don't think there has ever been such a product offensive done in Europe as the one that BYD is doing.'
As well as launching more new cars, this week it also confirmed a partnership that will make its EVs more affordable to run than anything else on the road. In a deal struck with UK energy firm Octopus Energy, it has delivered a new 'all-inclusive' EV bundle which, using 'vehicle-to-grid' - or V2G - technology, provides free charging. Called the Power Pack Bundle, customers can lease a BYD Dolphin supermini from just £299 per month. What makes it incredibly appealing is that Octopus provides a free EV charger, and charging is included in the price.
Using the British firm's bi-directional Zaptec Pro wallbox, owners plug their cars in at the end of the day and the device drains the battery, with the electricity sold back to the grid at peak times when prices are highest. Then, at off-peak hours (typically the middle of the night), it will feed the energy back into the car, fully charging it for when it's needed in the morning. The higher earnings from peak electricity sale will offset the cost off-peak charging. Greg Jackson, Octopus' CEO, says customers will need to plug their car in around 20 times per month for 12 hours sessions to benefit from cost-free charging. Given that most EV owners leave their cars plugged in when they get home from work and leave it until the morning, it shouldn't be an inconvenience.
Has BYD's rise come too fast too soon?
While BYD appears to be steaming ahead with its plans to dominate the car market, recent reports suggest it has slowed its production and expansion pace in recent months. Reuters claims it has already slashed shifts at some factories in China and delayed plans to add new production lines, based on comments from 'two people with knowledge of the matter'. The decisions are a sign that BYD's robust sales growth could slow, as it grapples with rising inventory even after offering deep price cuts in China's cutthroat auto market.
BYD has cancelled night shifts and reduced output by at least a third of the capacity at some of its factories, said the sources who declined to be named because the matter is private. These previously unreported measures were imposed on at least four factories and BYD had also suspended some plans to set up new production lines, one of the people said. Reuters was not able to identify the exact scale of the production reduction and expansion suspension, nor to ascertain how long these measures may last. One of the sources said the moves were aimed at saving costs, while the other said they were imposed after sales failed to meet targets. Data from the China Association of Automobile Manufacturers showed growth of BYD's output had slowed to 13 per cent and 0.2 per cent year-on-year in April and May, respectively, both of which were the slowest pace since February 2024 when factory activities were disrupted by a week-long lunar New Year holiday. This is Money has contacted BYD for comment but it has refrained from providing a response statement.