Warren Buffett’s Chinese EV Maker BYD Unseats Tesla As World’s Largest EV Maker

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For years, Tesla Inc (NASDAQ:TSLA) has enjoyed the distinction of being the largest electric vehicle maker in the world based on sales. However, the Chinese EV maker BYD Company (OTCMKTS:BYDDY), which has long been backed by Warren Buffett, has now overtaken the luxury automaker.

Lockdowns In China Weigh Heavily On Tesla

According to the Financial Times, company filings from BYD show that the Chinese firm sold 641,000 electric vehicles in the first half of the year, marking an increase of more than 300% year over year. Meanwhile, U.S.-based Tesla sold 564,000 vehicles during the first six months of the year.

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Tesla cited supply chain issues and sales disruptions in China for its challenging second quarter. China’s zero COVID policy has resulted in widespread lockdowns and travel restrictions across the country.

According to the Financial Times, the COVID-related lockdowns in China hit Tesla and several Chinese EV makers, including Nio, Li Auto and Xpeng, harder than BYD. Most of BYD’s factories are located outside the cities and regions most affected by the lockdowns stemming from China’s zero COVID policy.

BYD Also Steals The Position Of Second-Biggest EV Battery Producer

While Tesla only produces all-electric vehicles, BYD produces many plug-in hybrids, which pair a sizable battery with a traditional engine to enable longer distances between recharges. China categorizes plug-in hybrids as zero-emission vehicles for its sales rules.

In addition to overtaking Tesla for the title of the world’s largest EV maker, BYD has also dethroned South Korea’s LG as the second-largest EV battery producer in the world. Only China-based Contemporary Amperex Technology, better known as CATL, produces more EV batteries.

Seoul-based SNE Research found that BYD’s monthly market share of EV batteries has exceeded that of LG Energy since April. Part of the reason for this stems from the disruptions at Tesla’s factory in Shanghai following the implementation of the zero COVID policy. The policy forced China’s most populous city into a lockdown that lasted two months.

Tesla Misses Delivery Estimates

Tesla recently released its delivery numbers for the second quarter, coming in a little short of what analysts had been expecting. The automaker delivered 254,695 vehicles during the second quarter, a 17.9% decline from the first quarter that compares to the consensus estimate of 295,078 deliveries.

The second quarter marked the end of a two-year streak of quarterly delivery increases. Despite the disappointing delivery numbers, Tesla produced more vehicles than ever last month.

However, Reuters reported that several analysts had slashed their estimates to around 250,000 vehicles due to the prolonged lockdown in China. More than half of the vehicles Tesla produced last year came from its Gigafactory in Shanghai.

Following the release, Deutsche Bank analysts called for Tesla stock to soar back above $1,100 following a recovery in the second half of the year. Meanwhile, JPMorgan analysts trimmed their price target for the EV maker, warning that its stock could fall by more than 40%.