BEIJING (Reuters) -China's BYD (SZ:002594) posted a 21% rise in second-quarter electric vehicle sales, closing the gap with Tesla (NASDAQ:TSLA) 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 is almost 18,000 vehicles fewer than Tesla's vehicle deliveries for the second quarter, but far closer than the more than 86,000 gap in the prior quarter.
Tesla's second-quarter deliveries fell by a smaller than expected 4.8% to 443,956 vehicles on Tuesday, but that still marked the first time the U.S. firm posted two straight quarters of decline as it deals with stiff competition in China and slow demand due to a lack of affordable new models. Price cuts and incentives helped Tesla beat expectations, however, pushing shares up about 5% in morning trading.
Tesla's China-made EV sales in June fell 24.2% from a year earlier to 71,007, according to data from China Passenger Car Association (CPCA), extending a year-on-year decline for a third month.
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 (NYSE: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 at 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.