The electric vehicle (EV) industry is witnessing a dynamic shift as rising Chinese carmaker BYD publicly acknowledges its evolving relationship with American EV giant Tesla.
Almost always competitors in the burgeoning battery electric vehicle (BEV) market, these two companies may have more in common than most people think.
Changing tides
A mere decade ago, the relationship between Tesla and BYD was markedly different. While both were pioneers in electrified vehicles, their approaches diverged.
BYD initially concentrated on plug-in hybrids (PHEVs), whereas Tesla adopted a 'BEV only' policy.
This distinction led to a degree of scepticism from Tesla, with CEO Elon Musk once famously laughing off BYD as a competitor.
However, the tide has turned.
BYD has now overtaken Tesla as the world’s largest producer of fully electric vehicles. This remarkable growth has not gone unnoticed by Musk, who, without directly naming BYD, acknowledged Chinese EV automakers as Tesla's foremost competitors in the EV space.
Unified front?
The relationship between Tesla and BYD has evolved into a somewhat cooperative one, marked by Tesla's use of BYD's lithium iron phosphate (LFP) 'Blade' battery cells in some of its EVs, including the Model Y.
This partnership symbolises a significant shift in the industry, highlighting a joint effort to promote global EV adoption.
Yunfei Li, General Manager of Branding and Public Relations at BYD, reinforced this sentiment in a translated statement to American news outlet CNBC.
"Tesla is our very respected industry peer. It is also our client. I think this market is very large. It’s not that we must surpass them or they must surpass us," Li said.
"Instead, BYD and Tesla together, or more new energy vehicle brands together, we need to think about how to increase the new energy vehicle ‘cake’".
Expanding the EV market
Despite its rapid success in China, BYD is still in the process of establishing its presence in the global market.
The company's downplaying of its rivalry (and perhaps cooperation) with Tesla could play a pivotal role in this expansion, enhancing BYD's visibility and credibility outside China.
Their joint focus on innovation and sustainable technology is a positive sign for the future of EVs, both aiming to reduce global reliance on traditional combustion-powered vehicles.