Chinese car manufacturer BYD recorded a 42% drop in sales between January and March compared to the last quarter of 2023, allowing US company Tesla to regain the title of leader in the electric vehicle market.

Weak demand and increased competition in the Chinese market reduced BYD's sales to 300,114 electric vehicles in the first quarter of the year, according to a report sent to the Hong Kong Stock Exchange on Monday.

The company based in Shenzhen, southeast China, overtook Tesla in electric vehicle sales in the last quarter of 2023, when it sold 526,409 cars, compared to 484,507 sold by Tesla between October and December.

Tesla announced on the same day that it sold 386,810 cars in the first three months of 2024, below the 450,000 expected, but more than its Chinese rival.

Including hybrids, along with pure battery and hydrogen cars, BYD recorded quarterly sales of 626,263 units, an increase of 13% year-on-year. It was the slowest pace of sales growth since the second quarter of 2022.

But Tesla is also under greater pressure due to increased competition and an aging product line, something that could lead to BYD overtaking it again in electric vehicle sales in the coming months.

Tesla has suffered a slowdown in China, the world's largest electric vehicle market, where it faces increasing competition from local rivals, many of whom continue to lower prices and introduce new models.

CEO Elon Musk has already warned that growth during 2024 would be "notably lower" than last year's levels.

Although Tesla's sales growth has been driven by its Model 3 and Model Y cars, the group is not expected to launch its next model before the end of 2025.

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The pager

BYD has slashed the prices of almost every model in its range since the beginning of the year under the slogan " electricity is cheaper than oil", followed by its competitors, including Geely and SAIC-GM-Wuling, as the price war intensifies in the world's largest electric vehicle market.

Li Yunfei, general manager of BYD's brand and public relations, said in a recent social media post that the company is facing "a major confrontation with gasoline cars".

"Buying a gasoline car right now is like buying a pager when cell phones are already available," said Li, as the group launched a new version of the brand's two hybrid models with a starting price of 79,800 yuan (more than 10,000 euros).

A iniciativa da BYD acontece num momento em que surgem sinais de abrandamento da procura na economia chinesa. Dados da Associação de Automóveis de Passageiros da China mostraram que as vendas chinesas de carros com bateria pura e híbridos, que o governo considera como “veículos de energia nova”, aumentaram 36%, no ano passado, abaixo de um aumento de 96%, em 2022.

Cui Dongshu, secretário-geral do organismo da indústria, projetou um aumento de 22% nas vendas chinesas em 2024.

Ao ganhar uma vantagem inicial com a sua cadeia de abastecimento totalmente integrada verticalmente, a BYD enfrenta agora a concorrência não só dos fabricantes de automóveis tradicionais e das empresas emergentes de veículos elétricos, mas também das grandes empresas de tecnologia que estão a tentar conquistar uma parte do enorme mercado chinês, como a Huawei e a Xiaomi.

O mercado chinês representou mais de 90% das vendas totais da BYD. Embora a China seja o maior mercado da Tesla fora dos EUA, o país contribuiu com 22% das suas receitas totais durante o seu mais recente ano fiscal.

BYD's initiative comes at a time when there are signs of slowing demand in the Chinese economy. Data from the China Passenger Car Association showed that Chinese sales of pure battery and hybrid cars, which the government considers to be "new energy vehicles", increased by 36% last year, down from an increase of 96% in 2022.

Cui Dongshu, secretary-general of the industry body, projected a 22% increase in Chinese sales by 2024.

By gaining a head start with its fully vertically integrated supply chain, BYD now faces competition not only from traditional car manufacturers and emerging electric vehicle companies, but also from big tech companies that are trying to grab a share of the huge Chinese market, such as Huawei and Xiaomi.

The Chinese market accounted for more than 90% of BYD's total sales. Although China is Tesla's largest market outside the US, the country contributed 22% of its total revenues during its most recent fiscal year.