CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 87.41% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Scan to Download iOS&Android APP

BYD eyes push into North America: EV maker to launch Mexico sales next year

By Jenal Mehta

12:16, 30 November 2022

Share this article
In this article:
1211
BYD
246.65 USD
6.6 +2.750%
LIus
Li Auto Inc.
24.90 USD
-0.27 -1.080%
LCID
Lucid Group, Inc.
12.96 USD
3.91 +43.690%
NIO
NIO Limited
12.76 USD
0.57 +4.770%
RIVN
Rivian Automotive Inc.
19.87 USD
1.51 +8.260%

Subscribe to Weekly Highlights

The major market events for the week ahead right in your inbox. Subscribe
electric cars being charged
BYD sales growth is higher than Tesla. Photo – Getty images

China-based BYD (1211) is the top seller of electric vehicles in the country. It is now eying North America as part of its global expansion.

The company said in a statement it plans to launch in Mexico next year with a sales target of 30,000 by 2024.

This will place BYD in direct competition with US based Tesla (TSLA), Lucid Motors (LCID) and Rivian (RIVN)

Only a few months ago, the company announced its plans to expand into Europe and has already made multiple deals across different countries on the continent.

BYD (1211) Price Chart

 

BYD has been a success story during a tough economic climate, it sold 217,518 electric vehicles in October 2022, a 172% jump year on year.

Comparatively, Tesla (TSLA), sold more than 317,000 vehicles during all of the recent quarter, and its year-on-year growth rate is about tenfold lower than its Chinese rival.

Despite strong sales, Tesla has been struggling to make deliveries. It missed its delivery target by 15,000 in the most recent quarter.

US100

12,164.80 Price
+1.340% 1D Chg, %
Long position overnight fee -0.0179%
Short position overnight fee 0.0070%
Overnight fee time 22:00 (UTC)
Spread 3.0

BTC/USD

23,436.05 Price
+1.670% 1D Chg, %
Long position overnight fee -0.0500%
Short position overnight fee 0.0140%
Overnight fee time 22:00 (UTC)
Spread 66.00

Natural Gas

2.86 Price
+0.740% 1D Chg, %
Long position overnight fee -0.0485%
Short position overnight fee 0.0282%
Overnight fee time 22:00 (UTC)
Spread 0.005

XRP/USD

0.41 Price
+1.030% 1D Chg, %
Long position overnight fee -0.0500%
Short position overnight fee 0.0140%
Overnight fee time 22:00 (UTC)
Spread 0.00340

Jing Yang Director at Fitch Rating said in a note: “Many EV makers said 2Q22 margins deteriorated due to higher battery costs while deliveries of EVs with higher prices did not start until the second half of the quarter, if not later. They expect gross margins to recover from 3Q22. However, most EV makers still face volatile profitability due to product mix shifts, potential price competition, and sustained high R&D and selling expenses. EV manufacturers also face higher battery prices, after Chinese battery suppliers revised their cost pass-through mechanisms in 2Q22”

What is your sentiment on 1211?

246.65
Bullish
or
Bearish
Vote to see Traders sentiment!

Tesla (TSLA) Price Chart

BYD success can be partly owed to the rate of EV growth in China, where the sales of EVs grew by 50% between 2015 and 2020 according to research by ING. In the same period Europe and the US saw a 40% and 28% rise in sales.

However, not all Chinese EV companies were able to make the most of the rising tide. NIO (NIO) and XPeng (XPEV) reported losses of more than CNY2bn during 2022, Li (LIus) Auto also saw its losses deepen by 23%.

This highlights the aggressive steps that BYD is taking to come out on top despite economic headwinds.

Jing Yang at Fitch said that BYD was able to achieve this by “EV price increases and product mix improvements as it raised the share of sales of higher-end EVs and stopped producing unprofitable fossil-fuel cars from March 2022. BYD’s strategy to produce batteries and certain types of microchips internally also helped it to better weather supply-chain bottlenecks and cost inflation".

The move into Mexico comes as the nation has lifted import tariffs. One of the expansion strategies being used by the company is to make their vehicles more affordable in the region. While it hasn’t released starting prices in Mexico, Zhou Zou the lead for the Mexico project stressed that "We are the brand for everybody"

In Europe, BYD Tanga and Han models will be priced between €38,000 to €72,000, just a notch lower than local prices for Tesla.

Related reading

Rate this article

Share this article

Capital Com is an execution-only service provider. The material provided on this website is for information purposes only and should not be understood as an investment advice. Any opinion that may be provided on this page does not constitute a recommendation by Capital Com or its agents. We do not make any representations or warranty on the accuracy or completeness of the information that is provided on this page. If you rely on the information on this page then you do so entirely on your own risk.

Latest Stocks news

Still looking for a broker you can trust?

Join the 480.000+ traders worldwide that chose to trade with Capital.com

1. Create & verify your account 2. Make your first deposit 3. You’re all set. Start trading