Tesla vs BYD: A battle of global production capacity

Tesla: An American Behemoth

Founded by Elon Musk, Tesla has revolutionised the EV market. From its early days of producing the Roadster to its current array of models, Tesla’s growth has been nothing short of meteoric. The company’s global production capacity reflects this ascent.

Tesla’s Fremont factory in California, its original production site, can manufacture up to 650.000 vehicles annually. This includes up to 550.000 Model 3 and Model Y units, alongside 100.000 Model S and Model X units. In Nevada, the Gigafactory 1 primarily produces lithium-ion battery cells and is ramping up to manufacture the new 4680-type cylindrical battery cells and Tesla Semi electric trucks, although currently in pilot production.

Shanghai’s Gigafactory 3, Tesla’s first overseas plant, has become its primary export hub, capable of producing over 750.000 Model 3 and Model Y units annually. In Europe, the Berlin Gigafactory 4 adds over 250.000 units per year to Tesla’s capacity, focusing on the Model Y. Meanwhile, the Gigafactory 5 in Austin, Texas, produces over 250.000 Model Y units annually and is gearing up for the Cybertruck production.

Combined, Tesla’s global production capacity exceeds 1,9 million units annually. This extensive network supports Tesla’s ambitious target of producing over 2 million electric vehicles annually, reinforcing its status as the world’s largest EV manufacturer.

BYD: A Chinese Powerhouse

BYD, short for “Build Your Dreams,” was founded by Wang Chuanfu in 1995. Originally focused on producing rechargeable batteries, the company has since grown into a global leader in electric vehicles, outpacing even Tesla in some respects.

In China, BYD operates multiple plants, including major facilities in Shenzhen and Xi’an. These factories underpin BYD’s dominance in the domestic market, which is the largest EV market globally. BYD’s production in China is complemented by significant international expansion.

The company has announced plans for new factories in various regions, including Southeast Asia, South America, and Europe. In December 2023, BYD unveiled its first European factory in Hungary, aiming to strengthen its foothold in the region. Additional plans include a factory in Uzbekistan in partnership with Uzavtosanoat JSC, and production facilities in Mexico, Thailand, Brazil, and Indonesia.

BYD’s production strategy is not limited to passenger vehicles. The company also operates a bus manufacturing plant in California, highlighting its diverse transportation portfolio. In 2023, BYD produced over 3 million new energy vehicles, including both battery electric vehicles (BEVs) and hybrids. This total surpassed Tesla’s production, although Tesla remains the leader in purely battery-electric production.

Head-to-Head: Tesla vs BYD

The competition between Tesla and BYD is a testament to the rapid evolution of the EV market. In the last quarter of 2023, BYD briefly surpassed Tesla in global BEV sales, thanks to a slowdown in Tesla’s Chinese market and a general decline in EV demand. However, Tesla regained its leading position in the first quarter of 2024, despite both companies experiencing reduced sales.

In terms of market value, Tesla remains the most valuable automaker globally, with a market capitalisation of approximately $560 billion. BYD, with a market cap of around $81 billion, ranks among the top ten automakers but trails behind Tesla and other giants like Toyota and Stellantis.

Looking Ahead

Both Tesla and BYD are investing heavily in expanding their global manufacturing footprints. Tesla’s upcoming factory in Mexico and BYD’s new plants in emerging markets are poised to increase their production capacities further. This race for expansion reflects their strategies to reduce export costs and boost regional sales.

As the demand for electric vehicles continues to grow, the competition between Tesla and BYD will likely intensify. Their ongoing investments in new technologies and production facilities will play a crucial role in shaping the future of the global EV market. For now, the battle for supremacy continues, with both companies striving to outpace each other in innovation, production, and market reach.

Sources: CNN, CNBC