Which company and stock will lead the EV revolution going forward? asks Carl Delfeld, international investing expert and the editor of Cabot Explorer.
The market is fragmented and the competition keen with plenty of American, European, Chinese, and other Asian automakers in the hunt. Tesla (TSLA) is still in the driver’s seat right now but China’s EV leader BYD (BYDDY) can be clearly seen approaching at high speeds in the rear-view mirror.
In 2022, China auto giant BYD (for Build Your Dreams) switched to producing only all-electric battery vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs).
BYD sold more than 1.85 million electric cars in 2022, including hybrids. In both 2021 and 2022, BYD more than tripled sales from the previous year. That’s hyper growth and including hybrids, BYD has already surged past Tesla’s sales. Tesla unit sales came in at 1,313,851 for 2022, up 40%.
Most of BYD’s sales are still in China but it has a big international expansion underway, including the U.S., Europe, and Asia markets. The company also manufactures and supplies EV batteries, including to Tesla, and makes its own chips. This is vertical integration that would make Henry Ford proud.
BYD is moving up the scale to more premium models. It has also begun deliveries in Malaysia and India and entered Japan’s market two weeks ago.
The city of Shanghai is reintroducing a 10,000 yuan ($1,500) subsidy for residents who trade in vehicles in exchange for a purely electric vehicle. Shanghai is a big market for EVs, including BYD.
For perspective, Shanghai has a population roughly equal to that of America’s four largest cities (New York, Los Angeles, Chicago, and Houston) plus Montreal and Toronto. Overall, BYD is in a strong position to be one of, if not the, leaders of the EV revolution in terms of size, scale and growth.