China's BYD posts 21% jump in quarterly EV sales, closes gap with Tesla

FILE PHOTO: A person walks next to BYD Seal car in a BYD Auto company and Autotorino store in Milan, Italy, March 20, 2024. REUTERS/Claudia Greco/File Photo

BEIJING (Reuters) - China's BYD posted a 21% rise in second-quarter electric vehicle sales, closing the gap with Tesla after handing back the world's top EV vendor title to the U.S. rival in the first quarter.

BYD sold 426,039 EVs in the April-June quarter, according to Reuters' calculations based on its monthly sales reports. That's around 12,000 vehicles fewer than Tesla's vehicle deliveries estimated for the second quarter.

Tesla is expected to report a 6% drop in April-June quarter vehicle deliveries on Tuesday, the first time the U.S. firm is set to post two straight quarters of decline, as it deals with stiff competition in China and slow demand due to a lack of affordable new models.

The company may again cede its EV championship to BYD if the actual results turn out to be softer than estimated, with Barclays predicting an 11% drop in second-quarter deliveries, Tesla's biggest ever.

Tesla has hit a speed bump after years of rapid growth that helped make it the world's most valuable automaker. It warned in January that deliveries growth in 2024 would be "notably lower" as a boost from months-long price cuts wanes.

The EV maker has cut output of its best-selling Model Y electric car by a double-digit percentage number at its Shanghai plant since March to address weakening demand for its aged models in China, its second-largest market after the United States, Reuters reported in May.

By comparison, its top Chinese competitor BYD maintained steady growth in EV sales, while EV upstarts such as Nio reported stellar growth last quarter. NIO's vehicle deliveries in the second quarter more than doubled to 57,300 units.

Price cuts and a growing shift in consumer demand to EVs and hybrids from gasoline-powered vehicles are the main reasons behind Chinese EV makers' strong sales in recent months, said Cui Dongshu, secretary general, China Passenger Car Association (CPCA).

Sales of new energy vehicles including EVs and plug-in hybrids in China made up 46.7% of total car sales in May, a fresh monthly high, as per CPCA data.

(Reporting by Qiaoyi Li, Zhang Yan and Kevin Krolicki; Editing by Miyoung Kim and Sherry Jacob-Phillips)