On March 14, Tesla Chief Executive Elon Musk and Chinese electric vehicle and battery maker BYD denied a media report that said the U.S. giant was ending its cooperation with BYD on battery supplies. In response, Musk posted on Twitter that “relations between Tesla and BYD are positive”.
The rumor originated from a Korean media outlet that showed that Tesla did not ask BYD to supply additional batteries for its Model 3 cars after the supply agreement between them expired earlier this year. It may be due to factors such as the blade battery itself, the subsidies related to electric vehicles in the United States, and the competitive relationship between the two sides.
The report also said that Tesla will become more dependent on LG Energy Solution, a battery maker in South Korea. Tesla currently uses LG Energy Solution and CATL products for its European vehicles while using Panasonic for North America, and these companies may fill BYD’s vacancy.
The news of BYD’s cooperation with Tesla began in 2022. At that time, it was reported that BYD was supplying 10GWh batteries for Tesla European models, and Tesla models equipped with blade batteries had entered the testing stage. Subsequently, the news was confirmed by Lian Yubo, executive vice president of BYD. “BYD respects Tesla and is ready to supply batteries to it immediately.”
The competition between BYD and Tesla in the Chinese new energy vehicle market has intensified. According to the China Passenger Car Association (CPCA), BYD ranked first in the retail ranking of new energy passenger car manufacturers in 2022, with sales of 1.8 million vehicles, including plug-in hybrid cars. Tesla China ranked behind BYD and SAIC-GM-Wuling with sales of 440,000 vehicles.
When considering only pure electric vehicles, Tesla and BYD are the two automobile manufacturers that had the highest global sales volumes in 2022. Tesla still holds the top spot with 1.31 million electric vehicles sold, while BYD sold 910,000 electric vehicles.
Meanwhile, BYD’s car exports are accelerating. Hedin Mobility Group AB, one of the largest dealers in Europe, signed an agreement with BYD in August last year to distribute three BYD models in Germany. In the same year, BYD won an order for 100,000 cars from SIXT, the largest car rental company in Europe. Octopus EV, an EV leasing firm, will also buy 5,000 vehicles from it over the next three years. Behind these orders is the rapid expansion of BYD’s overseas influence.
Steve Westly, former Tesla board member and founder of The Westly Group, said in a CNBC interview last year, “For the first time, I think there is a real challenger and that challenger’s name is BYD.”