BYD closes 2024 on top, but can it sustain its EV supremacy?

"China's champion, the world's champion," posted BYD in a triumphant social media statement on Januray 1—the numbers back up the bold claim. The Chinese auto giant closed 2024 with a record  4.3 million EV and hybrid sales, shattering its initial target of 3.6 million units. While its 1.76 million pure EV deliveries fell just shy of Tesla's 1.79 million, BYD's commanding performance in hybrids has secured its crown as the world's largest new energy vehicle manufacturer.

The statistics picture of unstoppable momentum. For the first time in Q3 2024, BYD has outpaced rival Tesla in revenues posting 201.12 billion yuan ($28.2 billion) against Tesla's $25.18 billion. By December, BYD's aggresive push earned another milestone—its 10 millionth plug-in vehicle rolled off the production line, with the company's upcoming 30th anniversary.

Yet, it's not all been plain sailing for China's EV juggernaut. While BYD has seen massive growth in China, where it has recently surpassed market leader Volkswagen's sales to become the preferred brand—it may encounter a rougher road outside of its domestic market and Southeast Asia.

It's victory lap faces serious obstacles abroad with the EU slapping Chinese EVs with tariffs up to 45.3%, with BYD specifically hit by a 17% duty atop existing 10% levies. The U.S. market remains effectively closed due to prohibitive tariffs; BYD's executive vice president Stella Li has explicitly ruled out passenger vehicle sales there.

Similarly, high tariffs have kept cheap Chinese EVs out of the US market. However, BYD's executive vice president, Stella Li, has said the company has no plans of selling its passenger EVs in the US and finds the market "complicated" and "confusing", alluding to tariffs and conflicting politics.

But can BYD continue to win the EV race? Or will high tariffs, trade wars, or politics force the breaks on its extraordinary growth? Campaign Asia-Pacific turned to five brand experts to weigh in.

Danish Chan
Co-founder + strategy director, Untangld

BYD has become a rising star in the EV market, leveraging vertical integration, economies of scale, and cutting-edge battery technology to secure a global competitive edge. Government backing hasn’t hurt either, I’m sure.

That said, the brand itself is still a work in progress. While tactical sponsorships and generic advertising have supported awareness, BYD has not yet built a distinct position or personality. Right now, the brand is defined by its product and the category.

BYD is making EVs more accessible by offering some of the most affordable options in the market—a timely move as consumer confidence wavers. This affordability in addition to the brand’s diverse range means it has been able to adapt to local preferences and achieve deep market penetration unbelievably fast. Plus Elon Musk has people running away from Tesla in recent times. So that doesn’t hurt BYD.

In a market growing 35% year-on-year, BYD’s affordability and accessibility position it well for continued success. But, as competition heats up with both new and established auto brands entering the EV space, BYD will need to invest in building a stronger, more meaningful brand. They will need a brand that gives the middle class more permission to buy BYD in the face of more established brands. And while affordability has its place, unlocking both technological and emotional connections will be critical to sustain BYD’s momentum in the near future.

Jolin Guan
Associate partner, Prophet, Shanghai

BYD’s widely-recognised vertically integrated supply chain is undoubtedly a key factor. This approach not only effectively reduces costs but also ensures exceptional inventory management and delivery capabilities. However, beyond its robust supply chain, BYD’s marketing prowess is also remarkable.  
 
BYD excels at identifying market trends and leveraging its efficient R&D to create diverse product lines that promptly address new market demands. For instance, the Qin Plus EV enables both urban commuting and short-distance travels with an extended range; BYD’s flagship sedan Han EV combines a sleek and luxurious design with high-performance motors and battery packs to offer both speed and sophistication to business professionals; while Dolphin’s compact and stylish design captivates the attention of young consumers.  

In international markets, BYD has also conducted thorough research to understand the needs of diverse customer segments, adopting localised strategies to meet specific demands. For example, in Mexico, BYD initially targeted the booming rideshare market with its low-end models but quickly recognised affluent Mexicans’ love for camping. It swiftly introduced a powerful pickup truck EV tailored to this demand.

Legacy automakers in Europe and the US face significant hurdles. A primary factor is their unwillingness to relinquish their existing technological and market advantages during the ICE (internal combustion engine) age. Moreover, addressing the workforce tied to the ICE supply chain also presents a geopolitical challenge, particularly for EU markets, where leading economies such as France and Germany are especially impacted. This explains why the EU hurriedly introduced additional tariffs on Chinese EVs in October, aiming to temporarily curb competition from Chinese automakers. However, in the long term, European manufacturers must focus on enhancing their competitiveness rather than targeting Chinese EV companies. Similarly in the US, some research has suggested one in five American consumers is interested in checking out a Chinese EV despite having never bought one, a positive sign for BYD.

Arnold Ma
Founder, Qumin

Looking ahead, BYD's brand prospects appear very positive and robust, but certain challenges must be addressed to maintain momentum:

Imminent tariffs from the EU and potential ones from the US pose risks to BYD's international sales. To mitigate their impact, BYD is investing in local production facilities, such as the planned factory in Hungary, to circumvent import duties and strengthen its presence in key markets.

In markets where Chinese brands face scepticism, BYD should focus on building trust through quality assurance, customer service excellence, and transparent communication. Tailoring marketing messages to address local consumer concerns and preferences will be crucial to them.

Continuous investment in R&D is essential to stay ahead of competitors. BYD will likely continue to prioritise advancements in battery technology, autonomous driving, and connectivity features to meet evolving consumer expectations and regulatory standards.

BYD's commitments to sustainability and ethical practices can enhance its brand reputation globally. Initiatives such as reducing carbon footprints, ensuring fair labour practices, and engaging in community development that resonate positively with stakeholders should continue to stay in focus.

Kaitlin Zhan
CEO, Oval Branding

BYD has been referred to as this 'popular brand you have never heard of'. As a company with a history in battery making, their success in the EV market has less to do with their marketing, and more its technology, value for money and Chinese government support. BYD deploys a production strategy called vertical integration, controlling over 70% of its supply chain, reducing significant costs. This makes it a strong competitor to Tesla.

As BYD eyes the European market, it is imperative for the company to gain more brand awareness with European consumers. BYD became the Official Partner and the Official E-Mobility Partner of UEFA European Football Championship 2024 to build brand awareness. But one sponsorship is not enough. They need more creative campaigns that speak to its target audience who values an affordable ride. They also need sustained marketing and positive PR to boost their brand image.

As a Chinese person who rides BYD London regularly, I can't wait for ride shares in an autonomous BYD to be a regular occurrence.

Martin Roll
Business and brand strategist, author, Asian Brand Strategy

By combining a broad range of models, aggressive pricing, technological innovation, and strategic market entry, BYD has established itself as a leader in the EV industry. Its adaptability and focus on emerging markets have enabled it to win the EV race in many regions, outpacing rivals like Tesla and redefining the global automotive landscape.

The future for BYD remains bright due to its strong growth trajectory and leadership in the electric vehicle market, but it must address challenges like potential tariffs from the European Union (EU) and the United States. The brand should prioritise localising production in key regions.

For example, its planned European passenger car factory in Hungary will not only mitigate tariff impacts but also strengthen its position in the European market which will help showcase a proactive response to trade barriers.

Diversifying its market presence is equally critical to stay ahead. BYD's expansion into emerging markets such as Southeast Asia, Latin America, and Africa can help reduce reliance on regions imposing restrictive trade policies. These markets present substantial growth opportunities, particularly for BYD’s affordable and mid-range EV models, where demand is increasing rapidly.

To sustain its brand health, BYD must continue investing in technological innovation, particularly in its battery technology and EV performance. Enhancing its branding around factors like sustainability, innovation, and quality will resonate with increasingly environmentally conscious consumers thereby fostering loyalty and strengthening its global reputation.

Finally, forging strategic partnerships with local distributors, governments, and technology firms will enable BYD to adapt to regulatory landscapes and consumer preferences effectively. By combining these efforts with advocacy for fair trade practices, BYD can likely navigate tariff challenges to maintain its leadership in the global EV market and ensure the long-term growth and resilience of the brand.