Yahoo Autos BYD's explosive growth may topple Ford’s spot in global rankings by year-end
Ford currently stands as the sixth-largest automaker in the world by sales, but a Chinese automotive company could be taking its place by the end of the year. BYD has seen explosive growth in 2024, selling more than 500,000 vehicles in October alone. If BYD passes Ford, it will be the first of the Big Three Detroit automakers on the list to fall.
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BYD is eying global expansion amid phenomenal sales
BYD, which stands for “Build Your Dreams,” has seen explosive growth over the past two years, taking China’s domestic market by storm. Now, the Chinese automaker is eying global expansion, with plans to build production facilities in Thailand, Turkey, Hungary, and Brazil, among others.
In Q3 2024, BYD’s revenue jumped 24% to $28.2 billion, handily topping Tesla’s $25.2 billion. In terms of profit, however, Tesla remained the top dog, bringing in $2.2 billion versus BYD’s $1.6 billion. Notably, Tesla benefited from the $7,500 federal tax credit, BYD received electric car grants from the Chinese government. While BYD may be struggling to topple Tesla completely, it’s having no trouble moving up the list of the world’s top-selling automakers.
In 2023, BYD sold just over three million vehicles, with its vehicles available in over 70 countries and six continents. As of 11 November 2024, BYD has sold more than 3.25 million vehicles. In the third quarter, BYD sold over 1.1 million vehicles, with more than 500,000 models sold in October alone.
BYD has yet to enter the United States market, but that could change soon with a simple change of mind. While a tariff could prevent Chinese vehicles sales in the United States, the United States-Mexico-Canada Agreement of 2020 could offer BYD a loophole. The automaker plans to build a production facility in Mexico. That could give the Chinese automotive company a way into both the United States - if they wanted to, that is.
The Alliance For American Manufacturing released a report earlier this year indicating that cheap Chinese vehicles could be “an extinction-level event for the U.S. auto sector.” As of February 2024, however, BYD’s executive vice president Stella Li stated the company isn’t planning on breaking into the United States anytime soon.
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Legacy automakers are struggling in China
Until recently, foreign automotive brands ruled China’s automotive industry. In 2020, China’s domestic automakers held just over a third of the country’s market share. Today, they account for more than 60%. That shift has caused major issues among legacy automakers, and the aftershocks have been brutal.
Legacy automakers are struggling amid the switch to electric and plug-in hybrid vehicles that meet the needs of consumers at an affordable price. Sales figures and revenue don’t lie, but some executives seem to have had their heads buried in the sand until recently. Now the question is whether it’s too late to right the ship.
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Nissan is facing a situation so severe that the Japanese automaker is cutting its global production by 20% and laying off more than 9,000 employees. CEO Makoto Uchida is reducing his monthly salary by 50% as Nissan cuts its annual profit forecast by 70% to $975 million. This is the second time this year that the Japanese automaker lowered its forecast. Nissan also sold a third of its stock in Mitsubishi for a desperately needed cash infusion.
Stellantis, which owns Chrysler, Dodge, Jeep, Ram, and Fiat, has faced sales struggles with consecutive quarterly reports showing at least a 20% decline in sales. The finger pointing has been pretty wild, with dealers claiming they’d been warning executives for years, while Stellantis scolded the dealers for doing so publicly.
Meanwhile, the UAW is threatening strike in the United States, Italian workers are airing their frustrations, and shareholders are filing lawsuits over the stock’s dramatic decline. Jeep’s joint venture in China filed for bankruptcy in 2022, and should have been a major red flag for the parent company.
German automakers aren't doing great either, with Volkswagen announcing its plans to close at least three of its German production facilities. VW’s labor unions are already fighting back, with a potential strike starting in December if the two can’t come to terms.
VW not only plans to close three of its facilities, but slash worker pay by 10% on top of the thousands of jobs lost with the closures. BMW and Mercedes-Benz also issued profit warnings in October, indicating they may take drastic measures in the near future as well.
Hyundai and Honda are also struggling in China, and Mitsubishi withdrew from the country entirely in 2023. Ford and General Motors are also cutting their production capacities in China. Tesla stands as an exception, with the American automaker’s sales increasing by 6%. Even with less models sold, however, BYD topped Tesla in quarterly revenue, but not profit, in Q3.
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The automotive industry is undergoing a massive shift
Toyota’s been the world’s top-selling automaker for the past four years, with Volkswagen trailing behind in second place by more than a million sales. Hyundai Kia comes in third, with Stellantis, GM, and Ford filling out fourth through sixth place respectively.
While BYD doesn’t have plans to expand into the United States just yet, the Chinese automaker is looking at North America as a potential market. BYD recently suspended plans to enter the Canadian market due to a 100% tariff on Chinese EVs. Mexico, however, appears to be fair game for the time being, with plans to sell vehicles, like the BYD Shark pickup, locally going forward.
A maker of EVs and PHEVs, BYD has gotten a foothold in more than 70 countries across six continents. Despite denial that the United States is ready for EVs by automakers, Tesla and BYD are the two dominant EV forces in the current market. Notably, however, while BYD doesn’t face a ton of EV competition worldwide, other automakers are responding with PHEVs of their own, including Toyota, the world’s current top automaker with more than 10 million vehicles sold in 2023.
Final thoughts
Let’s be clear here. I’m not a fan of Chinese automakers or Ford, so I don’t really have a car in this race. Regardless of where your brand loyalty lies, the evolution of the automotive industry is undeniable and happening quickly.
The age of electrification has spurred a shift in the landscape of the automotive industry reminiscent of the Japanese automotive industry in the late 20th century. Back then, Japanese automakers were more productive than American manufacturers, thanks in part to a less restrictive government and smaller, more efficient vehicle offerings. As of 2023, Toyota has been the world’s top-selling automaker for four consecutive years.
Tariffs can go as far as restricting the reach of BYD and other Chinese automakers, but taxes on imported vehicles can’t halt BYD’s growth completely. Canadian and United States tariffs will most certainly be a major obstacle, but other markets, such as India, Mexico, and Brazil, are giving BYD a much warmer welcome.
As BYD expands and continues to meet the needs of consumers, the Chinese automaker is likely to continue its explosive sales growth. There’s no denying that legacy automakers are lagging behind now, and they’re in for a world of hurt if they don’t adapt to a changing market. After all, government subsidies and tariffs can only protect them for so long. The world’s automotive manufacturers need to move quickly, or the top 10 will look much different a decade from now.
