Elon Musk Once Laughed at BYD. Now BYD Is the World's Largest Automaker.
In a 2011 interview, a journalist asked Elon Musk about BYD—the Chinese automaker backed by Warren Buffett. Musk laughed. Not a polite chuckle, but a full, dismissive laugh, followed by the question: "Have you seen their cars?" It was a moment that aged about as poorly as any in modern business history.
From Punchline to Powerhouse
BYD, which stands for "Build Your Dreams," was founded in 1995 as a battery manufacturer before pivoting to automobiles. For years, it operated in the background of global auto news—solid but unremarkable to Western eyes. That changed fast.
- In 2022, BYD overtook Tesla as the world's top-selling EV brand by volume
- By 2024, BYD reported over 1.76 million fully electric vehicles sold, with total new energy vehicle (NEV) sales exceeding 4.27 million units globally
- BYD now sells vehicles in more than 70 countries, including Europe, Southeast Asia, and Latin America
- The company controls its entire supply chain—from lithium mining to battery production to final assembly—giving it a cost structure Tesla and legacy automakers struggle to match
Musk's Tesla, by comparison, delivered approximately 1.79 million vehicles in 2024, marking its first annual sales decline since 2011.
Why BYD Won Where Others Struggled
BYD's rise isn't just a story of cheap manufacturing. The company made a series of strategic bets that paid off:
Vertical integration. BYD makes its own batteries through its blade battery technology, which is considered one of the safest and most energy-dense lithium iron phosphate (LFP) designs on the market. Controlling the battery means controlling the margin.
Aggressive pricing. Models like the BYD Seagull start at roughly $10,000 USD in China—a price point no Western automaker can touch. This has made EV adoption accessible to middle-income consumers across Asia and beyond.
Speed of iteration. BYD releases new models and updates at a pace that mirrors tech companies more than traditional automakers, keeping its lineup fresh and competitive.
Government alignment. China's subsidies and infrastructure investment in EVs gave BYD a head start, but the company has since proven it can compete without a home-field advantage.
What This Means for Tesla and the Global EV Race
Tesla still leads in brand prestige, software sophistication, and the U.S. market specifically. Its Supercharger network remains a genuine competitive moat. But the narrative of Tesla as the uncontested EV leader is no longer accurate.
Legacy automakers—GM, Ford, Volkswagen, Toyota—are caught in the middle: too slow to match BYD's cost structure, too invested in combustion-era infrastructure to pivot cleanly. BYD's expansion into Europe has already triggered EU tariff investigations, a sign that Western governments view it as a serious threat to domestic industry.
Musk has since acknowledged BYD's competitiveness, calling them "the most competitive" car company in the world in a 2024 statement—a striking reversal from that 2011 laugh.
The lesson isn't just about one company beating another. It's about how quickly industrial leadership can shift when a competitor controls costs, moves fast, and operates in a market the size of China. BYD didn't ask for respect. It built a case that couldn't be ignored.