Chinese electric-car maker BYD poses a major threat for Elon Musk’s Tesla and Detroit’s Big 3 automakers – and President Trump’s trade war with China could accelerate the crisis, experts told The Post.
The fast-growing firm surged past Tesla with $100 billion in global sales last month while unveiling innovations like five-minute charging for 250 miles of range and an assisted driving system called “God’s Eye.” That’s despite the fact that BYD’s cars aren’t sold in the US due to punitive 100% tariffs on Chinese-made electric vehicles.
Tesla investors, meanwhile, face an aging car lineup, tough competition in key markets like China and protests against Musk’s work with the Department of Government Efficiency (DOGE), which has sparked a wave of vandalism attacks. Last week, Musk’s firm reported a 13% sales drop in the first quarter.
Rising tensions between the US and China escalated last week after President Trump’s bombshell round of reciprocal tariffs, which included 25% levies on all imported cars and car parts and 54% tariffs on all Chinese goods. China retaliated by slapping a 34% tariff on all goods imported from the US.
The seismic trade taxes are poised to boost BYD’s business at the expense of Tesla, according to Wedbush analyst Dan Ives. BYD will gain room to expand in Europe, Mexico and South America while the tariffs force higher costs on US auto brands – as much as $100 billion per year, according to Ives.
“As the words came out of Trump’s mouth, they were probably drinking champagne in BYD headquarters,” Ives told The Post. “It accelerates BYD’s success.”
“Tesla is operating in an environment, despite Musk having a front-row seat, that’s actually huge headwinds for the company both domestically and abroad,” Ives added.
Unlike its competitors, Shenzhen-based BYD manufactures its own electric vehicle batteries and is known for its vertically-integrated production – with up to 80% of its car components built in-house.
BYD also benefits from China’s near-total dominance over the supply of critical minerals needed to build batteries and engines, as The Post has reported. China controls up to 70% of the supply of rare earth elements and 90% of the processing capacity, giving its government-backed tech firms a major advantage over Western rivals.
The ability to push costs ever lower is BYD’s “superpower” and key advantage in the age of steep tariffs, according to Michael Dunne, the CEO and founder of Dunne Insights. BYD sells a mix of fully-electric vehicles and hybrid plug-ins – the cheapest of which, the Seagull EV, is available for less than $10,000.
“’Imagine tomorrow that the doors [to the US] are open,” said Dunne. “BYD comes in and says, ‘hey America, how would you like to have a $30,000 compact or a midsize SUV or pickup truck that’s 20% lower than what the guys in Detroit are offering?’ That’s where the real vulnerability is.”
BYD’s low prices are particularly concerning to the Big 3 – Ford, GM and Stellantis – because they have increasingly leaned on high-margin vehicles like gas-powered SUVs and pickup trucks to drive profits while veering away from smaller cars that were seen as unprofitable.
“They’re able to manufacture comparable vehicles at 25% to 30% lower cost,” Dunne said. “That’s just like devastating in an industry where margins are already pretty thin. A 25% advantage on cost is like, OK — nobody, no other country, could match that.”
In a recent call with analysts, BYD Chairman Wang Chuanfu said car buyers in Britain are “very open” to vehicles sold by his firm and cited “great opportunities” in certain countries in Latin America and Southeast Asia – but noted he had no plans to sell in the US.
Musk personally acknowledged the strength of BYD and other Chinese automakers last year, confirming they would “pretty much demolish most other companies in the world” if not for trade barriers.
Elsewhere, Ford CEO Jim Farley – who caught flak last year for admitting he drives China-based Xiaomi’s $30,000 electric sedan – has reportedly called Chinese electric vehicle upstarts like BYD an “existential threat” for US automakers.
In Mexico, Chinese-made plugins and electric vehicles already account for about 20% of sales and growing. BYD is reportedly plotting a new manufacturing plant in Mexico that could produce 150,000 cars per year – a move some see as sign of future ambitions to expand to the US.
BYD and other Chinese firms are also gaining ground in other markets, like Australia, Brazil and Thailand, at the expense of entrenched automakers.
For Tesla, experts said long-term success likely hinges on Musk’s ability to deliver on long-promised features like AI-enabled “Full Self-Driving,” which are considered a key part of Tesla’s value proposition to investors.
Musk’s close ties to Trump could enable Tesla to gain the proper federal approvals much faster than previously expected.
“The Tesla story over the last several years has been driven by electric vehicle volume growth,” said Garrett Nelson, an auto industry analyst at CFRA Research. “But going forward, in our view, it’s going to be driven more by autonomous vehicles and how quickly they can get fully autonomous vehicles on the road and approved.”
Meanwhile, BYD’s headline-grabbing announcement of five-minute charging isn’t necessarily a game changer, according to Dunne.
Cars that come equipped with the technology will be much more expensive than BYD’s budget options, eliminating some of its price advantage. Most countries lack the charging grid infrastructure that would allow the chargers to work as advertised and it’s unclear how fast-charging on that level will affect long-term battery life and safety.
About half of what BYD sells is priced under $25,000, according to Dunne. Tesla’s vehicles are priced higher and remain the aspirational choice for car buyers – including those in China.
“The ones to be worried wouldn’t be Tesla – it would be the Fords, the GMs, the Stellantis,” Dunne said. “Those are the ones who would be vulnerable. Tesla is still innovating.”
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