The competition between Chinese automaker BYD and American electric vehicle (EV) giant Tesla has intensified in Singapore, with BYD significantly expanding its lead over Tesla in sales during the first half of 2024. This development, revealed by government data, highlights the growing challenge Tesla faces from Chinese competitors in various markets.
BYD’s success in Singapore, despite it being one of the smaller automotive markets in the region, is indicative of the Chinese company’s broader ambition to dominate the Southeast Asian EV market. This region has traditionally been dominated by Japanese and South Korean gasoline car brands, with Tesla yet to establish a strong foothold.
The Chinese automaker’s strategy in Southeast Asia has already shown promising results, with Thailand emerging as its largest overseas market. BYD has been expanding its presence through distribution partnerships with local conglomerates across the region.
In contrast to BYD’s growth, Tesla recently reported its lowest profit margin in over five years and missed Wall Street’s earnings expectations for the second quarter of 2024. These disappointing results were attributed to increasing price competition from rivals and a notable slowdown in global EV demand.
BYD, on the other hand, posted a 21 per cent increase in second-quarter sales and continues its aggressive expansion beyond China. The company recently opened its first stores in Vietnam, a market where Tesla has yet to begin vehicle sales.
In Singapore specifically, BYD has ramped up its marketing efforts, including the innovative approach of opening two themed restaurants where customers can enjoy dishes inspired by its car models and book test drives. This strategy seems to be paying off, as BYD’s EV sales in Singapore surged by 83 per cent in the first half of 2024 compared to the entire 2023 figure, reaching 2,587 units. In comparison, Tesla, ranked second, only managed to sell 28 more cars during the same period than in the previous year, with a total of 969 vehicles.
It’s worth noting that there is little price difference between BYD and Tesla models in Singapore, where car ownership comes with hefty additional costs, including a certificate of entitlement priced at around USD 74,000.
Singapore’s government has set an ambitious goal to phase out the purchase of combustion-engine cars by 2030. In the first half of 2024, EV sales accounted for approximately one-third of total vehicle sales in the city-state.
Looking at the broader Southeast Asian market, Tesla’s market share declined from 6 per cent to 4 per cent in the first quarter of 2024 compared to the same period in the previous year. This drop occurred despite overall EV market growth of 37 per cent during the same timeframe, according to data from research firm Counterpoint.
These developments underscore the shifting dynamics in the global EV market, with Chinese manufacturers like BYD increasingly challenging established players like Tesla, particularly in emerging markets.