On Monday, BYD Company Limited (OTC: BYDDY) signed a deal to open a $1 billion electric-vehicle factory in Turkey, directly threatening the dominance of Tesla Inc (NASDAQ: TSLA) in several European markets.
BYD Is Boosting Its Presence In Europe
Although BYD has already been selling its EVs in Europe since 2021, most of its sales are still in China, but the Tesla killer is aggressively expanding its footrpint outside its home market. This will be its second facility in Europe, with the first currently undergoing construction in Hungary. Its facility in Turkey will be located in Manisa province, allowing BYD to avoid 40% tariffs in the country. In addition, Turkey has a customs trade deal with the European Union, which hit BYD with provisional tariffs for imported Chinese electric vehicles last week, adding a 17.4% charge to the existing 10% rate for vehicles that were not manufactured within the EU.
According to Investor’s Business Daily, the annual capacity of BYD’s facility in Turkey will be 150,000 EV, and it will also include a research and development division.
BYD Continues To Expand Its Global Footprint
Last Thursday, BYD opened its first EV plant in Southeast Asia or more precisely, in Thailand. Its first facility outside Asia will be in Brazil, as BYD took over old plant of Ford Motor (NYSE: F) and started revamping it into an EV facility earlier this year. In June, Bloomberg reported BYD is also finalizing talks for a plant in Mexico, which is expected to create about 10,000 jobs. In this aspect, BYD is following the footsteps of Tesla, taking a leaf from its Gigafactory book.
While Tesla reported a second consecutive fall in deliveries, BYD posted record June and second-quarter sales. Tesla did beat estimates as the global sales drop of 4% was lower than what Wall street analysts expected, but BYD posted record second quarter sales of 986,720 EVs, which translates to an increase of 57%. In June alone, BYD reported a 35% YoY growth as it sold 341,658 EVs. These robust figures are the result of affordable pricing as BYD led a price war during the first quarter with which it hurt its rivals, Tesla included.
Putting BYD’s agressive approach aside, challenges and competitive threats remain.
However, even BYD has challenges ahead with much smaller rivals and startups intensifying their efforts. One example is Nio Inc (NYSE: NIO) that also reproted record June and second quarter sales last week. Last month, Nio revealed its affordable EV brand, Onvo. Also, Nio will be bringing an affordable EV to Europe next year. With Nio, along with other startups, planning to launch more affordable EVs in the coming months, the competitive threat is intensifying both for Tesla and BYD, whose margins have been hurt by price wars which they both used to boost demand.
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This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.
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