Home » China’s BYD Poses Major Threat to Auto Giants Despite Losing $35,000 Per EV Sold

China’s BYD Poses Major Threat to Auto Giants Despite Losing $35,000 Per EV Sold

by Lucas Finis
BYD EV losses

Chinese electric vehicle maker BYD represents an imposing competitive threat to legacy automakers, even while losing a staggering $35,000 on every car sold. This dichotomy highlights how China’s ambitions to dominate the global EV race could reshape the entire industry for decades to come.

BYD, which stands for “Build Your Dreams,” manufactures affordable, mainstream electric vehicles primarily for the Chinese auto market. The company sold a record 6.5 million EVs in 2022, making it the second largest EV maker globally next to Tesla.

Despite huge sales volumes, BYD loses $35,000 on each EV it sells due to competitive pricing, Citi analysts estimate. For a normal car company, losing this much per vehicle would be a fatal blow. But with the backing of the Chinese government, BYD and other Chinese automakers are playing by different rules.

For China, cornering the EV market is not about immediate profitability. It’s about establishing market share, technical expertise, and global supply chains that will pay major dividends down the road. Even with massive per-car losses, China has made EVs affordable for its massive population, cementing adoption and manufacturing capabilities.


This has allowed Chinese firms to evolve from copying European and US models just a decade ago to now leading the EV race. Options like BYD’s Han sedan offer features and performance rivaling Tesla at bargain prices. Critics complained that Chinese EVs were crude knockoffs, but that perception is fading fast.

BYD is emblematic of China’s state-backed blitzkrieg into EVs aimed at making the nation the world’s foremost electric and battery manufacturing hub. Success would give China major technological and economic advantages for the coming century. Even established automakers like Toyota and Volkswagen now trail behind Chinese rivals like BYD in EV sales and innovation.

The strategy does present risks if China’s demand slows and BYD and its peers are stuck with huge overcapacity and losses. But for now, analysts see no signs of China easing its EV growth trajectory, buoyed by government incentives and mandates. That leaves legacy automakers facing a harsh reality – emulate China’s all-in approach on EVs, or become relics of the gas-powered era.

With the planet increasingly turning to EVs to meet sustainability goals, China’s ambitions could give it leverage over carmakers everywhere. Companies like BYD have shown they can build millions of capable, affordable EVs with government support, even while losing money. As more nations try to nurture their auto industries, they may have little choice but to adopt similar state-driven approaches if they hope to compete with the likes of China’s BYD.

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