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As US President Donald Trump lashes out at vandals destroying Tesla vehicles as a political statement, Elon Musk is bracing for another threat to his empire.
The onetime king of electric cars – and far-right provocations – has acquired a new nemesis, this time from China, whose name can be summed up in three letters: BYD.
The Chinese automaker toppled Tesla this week to become the world's leading brand of electric cars. BYD, or Build Your Dreams, registered sales of $100 billion in 2024, exceeding Tesla's $97.7 billion for the first time.
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From smartphone batteries to electric cars
Despite ranking as the world's new No. 1 in electric vehicles (EVs), BYD remains largely unknown internationally. For one, its main market is in China. “The domestic market would account for around 85 percent of its sales in 2023,” according to Gregor Sebastian, an electric car specialist with the Rhodium Group, one of the world's leading China consultancies.
Secondly, unlike Tesla, which had electric cars as part of its DNA from the outset, BYD seems to have taken the automotive route somewhat by accident. The group was founded in 1995 under the name Yadi Electronics – named after a street in Shenzhen, where its headquarters were located – by Wang Chuanfu, who borrowed just under a million dollars from a relative to get started.
At first, Wang wanted to make batteries for smartphones.
And for a while he did so successfully, becoming one of the main suppliers for international brands such as Nokia and Motorola, according to the Australian Broadcasting Corporation (ABC).
Wang, however, had a grander vision for his batteries. He imagined a future in which cars would be predominantly electric and would rely on his batteries. But at the time, automakers were still dragging their feet on electric cars – apart from a rather eccentric South African entrepreneur by the name of Elon Musk who had relocated to America.
Wang soon made the decision to venture into the car industry and, in 2003, acquired a small-scale manufacturer, Xi'an Qinchuan Automobile.
Read moreTesla attacks surge across US in backlash over Musk's White House role
Musk doesn't believe in BYD, but Warren Buffett does
BYD’s journey to the top was markedly different since most of its rivals started out making cars before turning to batteries and electric vehicles.
But BYD didn’t get there overnight. In 2008, when hardly anyone had heard of him, Wang told the Financial Times that he would be No.1 in the automotive industry by 2025.
And although he doesn't yet dominate the sector, he has managed to keep to his timeline, becoming the leading manufacturer of electric vehicles in the fastest-growing segment of the market.
BYD’s recent success would no doubt rankle Musk.
When a journalist proposed in 2013 that the Chinese automaker was a serious competitor to Tesla, he burst out laughing. “You’ve seen their car!” Musk replied.
Back then, Musk may have had a point. BYD’s early models hardly impressed industry specialists, ABC reported.
Except for legendary American investor Warren Buffet. He was so convinced by Wang's vision that in 2009 he invested $250 million in BYD.
Buffet told Fortune magazine that part of what he saw in Wang was an unrivalled political and industrial acumen in adapting to the changing industrial policies of the Chinese government.
Before focusing on electric cars, his group “manufactured and sold hybrid buses to local authorities”, Sebastian said.
Xin Sun, a specialist in Chinese industrial economics at King's College London, said that were it not for government help 10 years ago, BYD may not have survived.
“BYD has managed to ride all the waves of Chinese industrial policy, which has enabled it to benefit greatly from public subsidies,” he said.
BYD controls the entire production chain
When Beijing finally decided to make electric cars a strategic priority – notably as part of its “Made in China 2025” plan unveiled in 2015 – BYD had everything it needed to play a leading role.
In the face of international competition, the manufacturer benefits from “low-cost labour and local industrial infrastructures that enable it to manufacture on a larger scale and at a lower cost", Sun explained. A BYD car costs around 15 percent less to build than if it had been made in the USA or Europe, according to a UBS bank study published in 2023.
Locally, BYD's primary competitors are Chinese, Sebastian said, referring to Geely (in partnership with Volvo) or SAIC – but they lack BYD's key advantage.
“It's the only vertically integrated company, i.e., it builds cars and batteries, and has direct access to raw materials,” Xin explained.
Moreover, BYD has acquired shares in strategic lithium mines in South America. Overseeing the entire production chain is essential if BYD is to be in control of setting car prices, currently the most important factor in the fierce battle for market share in China.
Stiff competition is one of BYD's biggest challenges, especially as China grapples with an economic slowdown. Prices are being driven down to such an extent, with models starting at around €5,000, “that manufacturers' margins are getting smaller and smaller”, Xin said.
BYD and its competitors were able to manage the situation as long as sales were growing in China. But “for the past two years or so, the market has been slowing down sharply”, Xin said.
International challenge
It is therefore necessary to find international growth drivers – not an easy task for Chinese brands.
“The main obstacle to BYD's global expansion is that the Americans don't want it. They have just adopted a rule that from 2027 will prohibit the sale in the United States of any cars connected with Chinese components,” Sebastian said.
What about Europe? That's the big question, according to experts. On the one hand, Tesla sales are plummeting due to Musk’s poor image, giving Chinese competitors greater opportunities. But on the other, Europe doesn’t know what to do about Chinese exports either. According to Sebastian, they're “under pressure” from the United States, which views China as an adversary.
BYD would do better to pursue new horizons for market growth elsewhere. Whether in Asia with Indonesia, or in South America with Brazil, Chinese automakers still have markets to conquer, even if electric cars are still less popular there than in North America or Europe.
While they wait to see whether BYD takes off internationally, Chinese authorities can at least relish seeing one of their homegrown champions topple a Western brand – and one so closely linked with Trump.
“It's an eminently political and symbolic issue too. As with DeepSeek, it's further proof that China can assert itself in cutting-edge fields,” Xin said.
BYD unveiled a next-generation feature last month that is likely to set a new technological benchmark against Tesla. Recharging its new models, Wang said, would take just five minutes and provide a range of up to 450 kilometres. That's much faster than the best models from Mercedes or Tesla.
This article is an adaptation of the original in French by Nicole Trian.