Warren Buffett and Berkshire Hathaway have shown that they still know a thing or two – usurping the young pretenders of the EV and billionaire world. BYD, the Buffet-backed Chinese EV car and battery maker has upended Tesla (TSLA, $699.20) as the world's leading electric vehicle seller. BYD sold 638,157 electric or plug-in hybrid passenger vehicles in the first six months of 2022, according to company filings published on July 3. The figure represents a nearly 325% year-on-year increase from the same period last year. In the first two quarters of 2022, BYD sold 323,519 battery electric vehicles and 314,638 plug-in hybrids. This was in comparison to Tesla which delivered a total of 564,743 vehicles in the first six months of the year.
Tesla cited supply chain issues and sales disruptions in China for its challenging second quarter. China's zero COVID policy has resulted in widespread lockdowns and travel restrictions across the country. This resulted in Musks Shanghai Tesla factory to completely shut down, whereby BYD was able to avoid the lockdown-spurred factory closures. Most of BYD's factories are located outside the cities and regions most affected by the lockdowns stemming from China's zero COVID policy.
Despite going head to head in global EV sales, Tesla and BYD are set to be real close pals sooner rather than later. BYD is gearing up to supply Tesla with batteries "very soon", a senior company executive told a state media anchor.
Why it matters
Tesla will always be the trailblazer in the EV market. Buoyed in particular by its eccentric founder and CEO Elon Musk. The problem with being at the top for so long is that there's only one way to go from there. Especially when being chased by a host of determined competitors. The news that BYD has overtaken Tesla in sales is surprising but not shocking, Chinese EV makers have been on a focused path to creating a dominant local and global market leader. Tesla is now having to look over its shoulder by not only established automotive marques such as Ford and Mercedes entering the fray but newer brands such as Lucid (LCID, $17.23), Polestar (PSNY, $9.56), BYD, Nio (NIO,$22.20) and others all of whom are keen to take the crown from the EV king.