Chinese electric vehicle (EV) maker BYD Co Ltd is tightening its grip on the global EV market. In the process it is closing in on Tesla Inc as sales surged in 2024.

In December alone, BYD reported EV sales of 207,734 units, bringing its annual total to 1.76mn according to the BBC. Much of this success can be attributed to aggressive pricing and Chinese government subsidies.

The Shenzhen-based automaker's total vehicle sales rose over 41% year-on-year (y/y), driven primarily by strong demand for its plug-in hybrid models.

With such figures, BYD's growing momentum suggests the global EV race is intensifying although Elon Musk’s Tesla did maintain a narrow lead in global EV sales during the third quarter of 2024. BYD has, however, been steadily closing the gap as many in the motoring industry await Tesla quarterly sales data later in the week.

China’s domestic market drives sales

BYD's dominance in China, which accounts for 90% of its sales, has been a cornerstone of its growth. Price wars and government incentives for EV purchases have spurred Chinese consumers to transition from traditional combustion vehicles to greener alternatives. As a result BYD has widened its lead over international brands which have struggled to compete in the Chinese market.

In part because of this, BYD's revenues for the third quarter of 2024 exceeded Tesla’s for the first time, reaching CNY200bn ($28.2bn), a 24% increase y/y. Tesla's revenues for the same period stood at $25.2bn according to a BBC report even as Tesla retained its position as the largest EV seller globally in terms of units sold.

Challenges in international markets

While BYD has seen success domestically, expanding overseas has proven more challenging though. Tariffs imposed by the European Union—up to 45.3% on Chinese-made EVs—and a 100% duty by the United States have hindered growth in these regions. Elsewhere in Asia too, Japanese and Korean cars dominate and across the Taiwan Strait in Taiwan there is a general distrust of ‘made-in-China’ labels.

Meanwhile, President-elect Donald Trump's incoming administration is expected to implement additional tariffs on Chinese imports potentially blocking BYD access to one of the world's most lucrative motoring markets altogether.