One of the most striking trends in the automotive industry is the striking rise of electric vehicles.
Whilst Tesla rose to early fame, in recent years, the Chinese company BYD has shown impressive results.
BYD continues to overtake Tesla on EV sales.
Such a phenomenon forces us to rethink the future of electric vehicles and government policy in countries still supporting Tesla despite the obvious merits of BYD.
The Rise of Chinese Giant, BYD
BYD was founded in 1995. The company started out as a battery manufacturer, before switching to car manufacturing.
In recent years, the BYD developed the electric vehicle market, with remarkable success.
By 2023, BYD overtook Tesla on sales per annum, with a estimated 1.85 million units sold, setting a record for Chinese manufacturers.
BYD was able to use its advantages in the production of batteries and components, allowing it to significantly reduce the costs of production hence market price of all models.
The company also has a wide range of models, from compact city cars to full-size SUVs and luxury models, which gives it a competitive advantage on (non-)price factors.
Tesla’s Place in the Market
Tesla, in turn, has one of the highest brand values in the world of electric cars.
The company founded by Elon Musk has gained worldwide recognition for its technology, innovative approach, and ambitious goals.
However, Tesla faces stark challenges: a high price point, limited production capacity, and dependence on certain markets such as the U.S. and Europe.
While Tesla is actively competing, with other companies, in the U.S. and European markets; its success in China is limited.
Tesla, of course, remains an important player, but its market leadership has become shaky, especially against the backdrop of stiff competition.
Therefore, the UK, a long supporter of Tesla, is reconsidering its policy on electric cars amidst a U.S. trade war.
UK Market: Impact of (Non-)Tariff Barriers
The UK is a major market for Tesla, with the company able to gain a significant share of the electric car market thanks to the British carbon credit scheme.
However the dial is shifting as the U.S. imposes tariffs on UK cars, including those from major UK giants such as Jaguar, Land Rover, and Aston Martin.
Tariffs will significantly increase production costs, making British car brands relatively price uncompetitive in the U.S. market.
Chancellor Rachel Reeves’ Big Questions
With sales of Chinese electric cars on the rise, the UK is faced with macro- and microeconomic policy questions.
BYD has been investing heavily in production on the European continent, offering more affordable and diverse models, which has significantly improved its position in the UK market.
The UK will be forced to review its electric vehicle policy. Negotiations are ongoing despite Trump’s latest unilateral economic war, citing tariffs on leading economies yesterday afternoon.
As London navigates the blowback of U.S. tariffs on it’s automotive sector, Reeves may look to BYD as a leveraging tool in upcoming trade negotiations.
Stay tuned to Daily Euro Times for the latest insights!
Explore more articles:
Lost in Trumpism: Democrats Astray Amidst Leadership Crisis?
Bhutan: Happiness Goes Hydro on the Himalayan Slopes
The Art of Deception: European Art Forgery Mafia Exposed
