(Bloomberg) -- Fresh from besting Tesla Inc. on quarterly revenue for the first time as an electric vehicle company, BYD Co. now has legacy automakers in its sight.
The extraordinary sales volumes being pumped out by China’s best-selling car brand means BYD has a shot at beating Ford Motor Co. in annual shipments this year, a milestone that would cement its position as a top 10 automaker globally.
BYD kicked off the December quarter by selling a record half a million vehicles in October. That impressive number put it nearly on par with Ford year-to-date, and almost all analysts covering BYD expect the momentum to continue. The US automaker, which only reports global sales on a quarterly basis, has been averaging around 1.1 million vehicles a quarter.
“Getting to 4 million is a stunning milestone,” auto industry consultant Michael Dunne said, referring to BYD’s reported annual target. “BYD will soon be seeing Ford in the rear-view mirror.”
Surpassing one of Detroit’s big three carmakers will be possible if BYD keeps up its strong run. Demand in China is in part being stoked by government subsidies encouraging people to trade in their older EVs or combustion engine cars. Plus, BYD’s lineup of hybrids is resonating with consumers who aren’t quite ready to make the switch to a fully electric vehicle.
Dunne, a former General Motors Co. executive, described BYD’s sales ramp up as “velocity without precedent.”
BYD’s third quarter set the tone for what’s possible. The Shenzhen-based auto giant managed to outsell Ford by 40,000 units, delivering some 1.13 million mostly passenger cars, as well as a few thousand trucks and buses.
Legacy carmakers like Ford are finding the competitive landscape increasingly tough as Chinese automakers expand everywhere, from Southeast Asia to Europe and Latin America. Nissan Motor Co., Volkswagen AG and Stellantis NV are all confronting similar crises around shrinking profits, excess capacity and bloated workforces.
Ford may find support under President-elect Donald Trump, who’s pledged to rescind funding for the Biden administration’s signature 2022 climate law, which includes more than $8.5 billion in incentives for individuals and families to decarbonize.
BYD doesn’t sell passenger vehicles in the US, but that doesn’t seem to be holding the company back much. Senior Vice President He Zhiqi bragged on his Weibo account earlier this month that BYD increased production capacity by almost 200,000 units in the August to October period by hiring around the same number of people for its assembly and components businesses. BYD’s output for October was 534,003 units.
“BYD has no peer in the world right now,” said Tu Le, founder of Detroit-based automotive advisory firm Sino Auto Insights. “Legacy automakers just seem to be collateral damage as BYD goes like a freight train toward becoming the largest automaker in the world.”
Nissan, which was in the headlines for all the wrong reasons last week — slashing payroll, production and forecasts for this fiscal year — may be another to lose out. The struggling Japanese automaker is on track to fall behind BYD in revenue this year.
BYD is also riding high in terms of the most valuable automakers by market capitalization.
Back in June 2022, when BYD’s Hong Kong-listed stock hit an all-time high, the Chinese carmaker was worth more than Ford, GM and Stellantis combined. It almost achieved that goal again last month as the US automakers’ woes deepened but didn’t quite get there. With the way sales are trending, it may only be a matter of time.
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