In the global electric mobility landscape, a scenario of strong opposition is emerging between Tesla and BYD, two players that embody different approaches to technological development and penetration of international markets. The backdrop is the issue of customs duties, which risk becoming both a protective lever and an obstacle to competitiveness.
Tesla in trouble, BYD on the rise
Elon Musk recently reduced his media exposure on cryptocurrencies such as Dogecoin to refocus on Tesla. The company, however, is at a critical juncture. Data from the last few quarters show a decline in sales, particularly in Europe, where it is estimated to have dropped by 70 percent during the initial months of the Trump administration, also complicit in an aggressive and disincentivizing trade policy for European consumers.
In this context, BYD (Build Your Dreams), a Chinese multinational company that is among the world’s leading manufacturers of electric vehicles and plug-in hybrids, emerges strongly, with a strong vertical integration that enables it to control the entire supply chain: from battery cell production to final vehicle assembly.
Who is BYD?
BYD operates on a global scale and is the market leader in China—the world’s largest electric car market—but is rapidly expanding its presence in Europe, Latin America, the Middle East, and Southeast Asia. Through a combination of competitive costs, advanced technology and an autonomous supply chain, BYD has surpassed Tesla in terms of global EV volumes sold by 2023.
Chinese innovation vs. Western dependence
One of BYD’s major competitive advantages is its direct control over battery production. The recent introduction of Blade batteries represents a technological breakthrough in safety, durability, and charging speed. We are talking about ranges of up to 800 km and charging times reduced to minutes using next-generation infrastructure. Added to this is the development of innovative solutions such as automated battery replacement, which has already been tested in some Chinese metropolises.
Tesla, while still boasting a strong brand and competitive offerings in software and autonomous driving, is heavily dependent on Chinese components, particularly for batteries and semiconductors. This limits its strategic autonomy and makes it vulnerable to supply chain disruptions or unfavorable geopolitical dynamics.
The node of tariffs and the energy transition
Elon Musk’s initial support for the tariff policy in the United States, thought to be a brake on Chinese expansion, has had a boomerang effect. Trade barriers helped curb Tesla’s exports and strengthen BYD’s local positioning, which now stands as a credible alternative not only at home but also in Europe.
Europe and the United States also face significant infrastructure challenges. Insufficient charging networks and the high cost of batteries are slowing the deployment of electric vehicles. Although many countries are investing in renewable energy and clean power plants, these take a long time to implement and are not yet sufficient to meet the potential demand generated by all-electric mobility.
Conclusion: who will drive the future of electric?
The growing success of BYD and other Asian manufacturers marks a turning point in the global transition to Battery Electric Vehicles (BEVs). Western economies are lagging both technologically and strategically, facing a double dependence: on infrastructure and Chinese manufacturing.
Musk’s return to Tesla’s operational helm does not seem sufficient, by itself, to reverse a trend that appears structural. Chinese innovation, competitive pricing, and speed of execution make it increasingly complex for Western brands to maintain leadership in a market that has already changed face in just a few years.
Disclaimer
This article reflects the personal opinion of the employees of Custody Wealth Management who wrote it. It does not constitute financial advice or an invitation to trade in financial instruments.
