One Finite Planet

EVs 2023: Is Tesla losing its cool as BYD ascends?

First Published:

Table of Contents

The world of EVs is changing, as is the leadership. Tesla lost 50% of its valuation in 2022. Some are predicting it will lose half of the remaining value in 2023, and although others predict the stock price will rebound, both outcomes are possible, and which becomes reality could depend very much on whether Tesla can remain 'cool', or through Musk and twitter becomes linked to far right.

Although entire EV future is not dependant solely on Tesla, a decline could have wide implications, for the market, competitors and the global transition to EVs. Not only are the 'legacy' automotive companies GM, Ford, VW and Toyota competition for the hearts and dollars from consumers, but also BYD, who is already taking the EV lead from Tesla.

Keys factor in EV trends during 2023 could turn out to be who is 'cool', shifting perceptions of a climate threat and the need for rapid response, and the impact of conflicts such as Ukraine. Rapid radical change for the industry, but it will take longer to impact consumers.

Synopsis: 2023 will highlight the real EV market leaders.

While Tesla stock has fallen 49%, Lucid, Rivian, and Nio have fallen more than 60% year to date. Each of those stocks fell precipitously from its all-time high price. Tesla stock dropped more than 55% from its peak, and the others are down more than 80% from theirs.

Yes, EV stocks have stalled here at the end of 2022 — and Barron’s forecasts ominously that “many won’t get started again.” Is the doom-and-gloom likely to hold and dim the bright new possibilities of 2023?

EV Market Experiences Growing Pains As It Meets The Masses

For Tesla, and many other EV companies, the stock price has only ever been justified on basis of potential future sales, not current sales, as discussed in “Did the Tesla story ever make sense?”. The company value is a guess on the future. A lowering of guess can happen even without any reduction in sales, and in 2023, Tesla sales will almost certainly still rise, although the rate of growth could wane. Although their star may shine far less brightly, Tesla is not about to fail.

2023 could be a tough year for the stock price of EV companies, and this more is a reflection of the reality that the window to enter the EV market is getting smaller, than it is a threat to the growth of sales of EVs, and even some companies, but those threatened are still selling at very low volumes and would have little impact on overall EV sales.

Those under greater threat are smaller EV specific players, and traditional automakers who fail to get their EV strategy right. A maturing industry means sale volumes and scale of production of EVs become essential to profitability, and more than ever the market will be shaped by those who are already big players in the EV space.

2023 is the year when the largest EV markers will first become ranked amongst the largest automakers. Prior to 2023, Tesla and BYD were 2 of the top 3 in market capitalisation, but in terms of sales EVs had no impact on who made the 10 manufacturers. For 2023, not only will be EVs companies in the top 10 automakers by volume, but with the biggest selling vehicles EVs, it will also become far clearer that only path to remaining as a high-volume automaker is by becoming predominantly an EV brand.

The transition to EVs happens at two very different speeds:

While it is great fun to follow what is happening with the sparkling new EVs, the goal for the environment is all about a reduction in the rate at which fossil-fuelled vehicles are purchased, not an increase in the rate people by new EVs, as even if that is a side-effect, it is not the end goal.

All this means is that what happens with manufacturers and the industry happens, far faster than any transition to EVs on the roads.

So, while massive change is happening to industry in 2023, it will impact companies and shares an interesting news far more than it impacts what people drive… at least what they drive in 2023. It will impact what they drive some years in the future.

Well-funded in-depth research into the future of the EV industry concluded the transition to EVs will result in a world where the top 5 brands hold 80% market share, which is even domination by the top few manufacturers than in the automotive industry today.

Who they will be will start to become clearer in 2023. The Musk sideshow will have an impact on Tesla’s place in the picture.

EV marketplace 2022: A world dominated by Tesla and BYD.

The global perspective.

EV sales are unlikely to stop growing, and which just two Tesla models representing almost half of EV sales outside China.

In 2022, in the world outside China, Tesla had so dominated EVs that many people thought of EVs as ‘Teslas’, with just two Tesla vehicle models dominating Electric Vehicle sales around in much of the world.

The truth is that at a global level, two companies together, Tesla and BYD dominate EVs sales. Together, these two have almost as many sales as the next 18 companies combined.

How to count EV sales is not universally agreed. Most sources count vehicles technically ‘quadracycles’ as EVs, and others even count motorcycles as they are vehicles. Then what is an ‘electric’ vehicle? Some count only ‘pure’ battery electric BEVs, others count PHEVs, and others even count any hybrid. The end result many statistics vary between sources, so while anyone source can be useful reading trends, it is a trap to try to read trends across different sources.

The figures used in the table here are from ‘Clean Technica‘ and include PHEVs. Note that when PHEVs are not included, Telsa is the global leader for now, although being reined in by BYD on that measure as well.

From multiple sources, it is clear that these two dominant players are on the global level maintaining their position, as the global EV market grew around 70% in 2022, and the combined volume of BYD and Tesla grew by from 1.5 million vehicles in 2021 to 3.2 million in 2022, which means the pair together increased their dominance in 2022 by growing faster than the overall EV market.

follow the with the sourceome sources count Some sources count motorcycles as vehicles, other count quad

almost have the world market for these two companies, and the next 18 companies of the top are very much a duopoly with Tesla and BYD representing almost half the world market for EVs, and the next . Despite the US perspective that , and in combination, that dominance at the global level is being maintained.

when people thought of

EV sales by region.

The 4 world markets: China, Europe, US and the ‘the rest’.

Source: EV Volumes

For total EV sales numbers, the home market for Tesla, North America, is not that significant. In both H1 2021 and 2022 (h2 figures to be added), North American sales total was less than half of those from Europe and for 2022, less than 1/5th of those from China. A portion of US investors may be more disproportionately swayed by US sales, but so far, the US market is only a small slice of the global EV market.

In 2022, the Europe reduced its share of global EV sales, while China surged. North America and the rest of the world overall largely maintained their percentage of the world EV market. The two big changes were that European EV adoption stalled, with the war in Ukraine most likely having significant impact, while EVs in China surged.

The percentages for EV sales in North America, Europe and China have become closely aligned with their total populations, despite car ownership historically having been higher in North America, a little lower in Europe and dramatically lower in China.

The world is changing. China is rising to living standards closer to those of the west, and EVs are playing a role in the change.

Ignoring ‘other’, EVs are now selling in the main three EV markets, North America, China and Europe, in proportion to the size of the population in each of these three markets, but the distortion in the pie population chart to the left is that the population of Japan and Korea in the population of place ‘Other’, as this allows comparing the relative proportion of those 3 main EV markets to the graphs for sales numbers. But ‘other’ is where the connection between market size and EV sales ends.

The entire continents of South America, Africa and Oceania are not represented in the graph with ‘Japan and Korea’ in place of ‘other’, nor is the population of the rest of Asia including India, Indonesia and Thailand etc.

‘Other’ by population is 68% of the globe, not 5% or 6%, and although economic differences are significant, even the ICE vehicle market is less distorted than the EV market at this time, and as China has shown, EVs can reach lower income segments far more effectively than ever happened with ICE vehicles. It is likely that over the next few years ‘other’ will provide significant growth opportunities for EVs.

China: The most significant EV market in terms of sales.

Over half the world market for EVs in one country. Historically, China had very low car ownership levels, but already EV ownership per capita exceeds that of North America. Another big change is that historically the Chinese car market was dominated by Western brands, but EVs have seen a shift with brand tradition no longer playing a major role.

Western automotive ICE vehicle brands that sell ICE are seeing a rapid decline in their Chinese sales that have such a significant contribution to their global volumes. Tesla has been the only Western brand succeeding in the EV market in China, but Tesla may also be fragile in China, as its lustre is fading, and this could hurt the growth of Tesla globally.

In China, it is not Tesla who dominates, but BYD, who are so far ahead of Tesla in China that Tesla sales globally cannot catch BYD sales in China.

It is not clear what will happen in the EV market in China in 2023, but most predict the growth of 2022 will not be repeated. With challenging economic times, it could be more like Europe in 2022 and have significantly slower growth of EV sales.

BYD, with almost half of 2021 sales being PHEVs, may be significantly affected by the removal of ‘EV status’ from PHEV in Shanghai and Beijing for 2023. Almost all BYD PHEV models are also available as pure EVs, and all have batteries and motors to allow EV only operation, but whether any fall in PHEV will translate into a rise in EV purchases is not yet clear.

What is not clear, is if the image of Tesla in China will be tarnished as a result of questionable steps taken by Elon Musk in the twitter adventure. Whether or not there is any link, Tesla sales in China have already been slowing.

Europe: The European ‘No new fossil-fueled vehicles by 2035‘ target has been approved.

The war in Ukraine and economic challenges have seen the pace of growth of EVs in Europe slow in 2022, with Europe falling from 40% of EV sales in 2021 to 27% in 2022.

Although the chart to the right is for October only, the data is representative of 2022 EV sales in Europe. All those percentages tally to 321.4%, which means Tesla was 32% of EV sales in Europe with just two models: The model 3 and Model Y. Note however, this is only BEVs and not including PHEVs.

Even if the EV market in Europe is again stagnant in 2023, there are many factors that could accelerate a shift from ICE vehicles to EVs in an otherwise quite flat market.

There is the arrival of more alternative EV products from several Chinese companies, including BYD. There are also innovations such as the Sono Sion and the Squad Mobility or the less innovative but still refreshing Microlino.

With the 2035 deadline for fossil fuelled cars less than 12 years away, the impact is already being felt. Remembering that most cars need to remain on the market for at least 7 years, that means the last date for a new ICE vehicle to be introduced in Europe would be 2028. Mercedes is introducing their last ICE vehicle, the new E-Class in 2023, and all other new models will be EVs only. Volvo is introducing no new ICE vehicles. This means for both Mercedes and Volvo, there will be no ‘all new’ ICE vehicle model of any of their vehicles. Others will follow.

North America: Mostly the USA.

While the region is North America, the USA dominates the region, despite Canada having significantly greater EV sales per capita.

Data for the USA is also more common than for all of North America. The table to the right, makes it clear that with 4 of the top 6 selling EVs, Tesla have over 60% of the market in the USA, make the home country one of the strongest for Tesla, with around 40% of their global sales.

With no Chinese EVs yet for sale in the USA due to a 25% import tax on cars from China imposed by Donald Trump in 2018, the main competition for Tesla in the US is from Ford and GM, who have to compete with Tesla without having access to the additions sales volume from sales in China that Tesla does achieves.

In 2023 the Inflation Reduction Act (IRA) should boost the EV market in the US in 2023, but there is the looming threat of ultra conservatives in congress who have been known to be anti-EV and prefer to support oil and gas. In summary, there are variables.

Tesla in 2023: Products and the Elon Musk factor.

The Tesla stock price is built on a growth story, not on the company as it is. If growth slows, the stock price falls further, and together with a slightly tarnished reputation of Elon Musk, the image of the company, particularly if the stock price is falling further. The Tesla customer based is somewhat dependent on fans, particularly in the US, but perhaps also in China, and fans are attracted to a ‘hero’.

Tesla said on Monday that the company has sold a record 1.31 million vehicles in 2022 with production increasing 47 per cent compared to last year, however, the numbers fall short of chief Elon Musk’s pledge to grow sales by 50 per cent nearly every year.

Tesla’s 2022 sales fall short of Elon Musk’s pledge to grow by 50 per cent

While 47% seeing growth in 2022 could be seen as close enough, the challenge will be to repeat ‘close enough’ in 2023.

The growth for 2022 came almost entirely from growth in sales of the Model Y, as did the growth in sales in 2021. In 2018, 2019 and 2020, it was all about the Model 3. Is there another years’ worth of growth in the Model Y, or is a new product essential?

Tesla has already started deliveries of the Tesla Semi and is expected to start deliveries of the Cybertruck. Beyond those new products it is possible that Tesla with commence shipments of their lower priced ‘model 2’ or whatever it will be called, but this seems less likely reach the scale of having an impact than updates to the Model 3 and/or Model Y which further reduce production costs and introduce new batteries.

Considering the significance of sales volumes on production costs, the fact that Tesla ended 2022 with price cuts, while most the industry had price rises, is ‘interesting’.

Is this bad news with Tesla fighting to avoid a drop in the level of sales, or good news showing Tesla is ready to increase production? The first few months of 2023 will reveal the answer. No one decreases the price just because they can, or because profits would otherwise be too good. If Tesla does not get a boost in sales in markets where prices were lowered, or at least market share, then it is clear Tesla is losing its lustre.

More growth from Model 3/Y?

Speaking at Tesla’s annual shareholder’s meeting, CEO Elon Musk claimed the Model Y will be the world’s best-selling vehicle from a revenue perspective this year. Furthermore, Musk stated that the Y will be the world’s number one vehicle when it comes to overall sales volume in 2023.

Currently, the Toyota Corolla is the world’s highest-selling vehicle. Approximately 1,150,000 were sold last year. For comparison, Tesla as a whole sold 936,222 vehicles in 2021. … The Model Y’s continued sales success is even more remarkable when you consider how expensive it is. Never before has a $70,000 car sold roughly 150,000 units per quarter.

Tesla Model Y Expected To Become World’s Best-Selling Car

The suggestion is there is more growth, but that does not mean sufficient additional growth to sustain that 50% per year annual growth for another year. Even Elon Musk only predicted sales of up to 1 million per year, and it has been suggested that sometimes predictions made by Elon Musk can be optimistic.

The outlook for the Model Y varies in each of the regions.

In China the threat to the Model 3 and Model Y is mostly about the perception of Tesla as a premium brand, in line with previous perceptions of all Western brand vehicles as superior to Chinese bands. EVs have changed Chinese perception of vehicles, and the mood of the market towards Tesla, with Musk showing his fallibility though twitter, has increased the risk of that ‘Western brands are not so premium anymore’ becoming extend to Tesla. There are already sufficient alternative products to all current Tesla products in China, and it would seem unlikely Tesla can match their prices. If Tesla sales contract in China, some of the Tesla volume price advantages aslo contract, as they are only advantages when volumes are sufficiently high.

In the USA, the Model Y has already reached the top ten bestselling vehicles list at number 6 and was the only EV on the list and the only vehicle on the list to increase its year-on-year sales. Given the much smaller market penetration of EVs in the USA, the potential for further growth in the US market is stronger than in China, or even than it is in Europe. No doubt the Model Y would need will most up the list where every other entrant has declining sales, but whether it can even repeat the 32.4% sales growth is uncertain with some concerned has Tesla will deal with competition, but in the USA, the only new competition will be from GM and will be ramping up in 2023, not already established.

In Europe, EV demand growth has been flat, and the big change is that BYD and other Chinese with highly competitive EV offerings are entering the market. It is not that BYD, SAIC and Geely will steel sales from the Tesla model Y, but more they will steel growth from the Model Y.

As ‘other’ is currently only 5% of the world EV market despite being 68% of the world population, there is still scope for growth. Most countries having lower EV incentives than Europe has meant EVs from legacy automakers have been either absent or uncompetitive, with where Tesla has distribution it tends to have very solid market share, but growth from 5% of the world market takes time.

The Tesla Semi?

While the Tesla Semi is extremely interesting, it seems unlikely to completely revolutionise the trucking industry in 2023.

Despite claims that the Semi will completely revolutionise the trucking industry, and other claims that it is completely useless, although some key details are yet to be clarified, the truth lies someone in between.

The Semi most likely when configured for 500-mile range will have a reduced weight carrying capacity, but as a significant percentage of trips by semi-trucks are limited by volume of what they carry, not weight, this weight limit will be a problem in some applications, but not all.

The Tesla Semi benefit from US regulations that allow a higher total weight for an electric semi, which would likely make the Semi more relevant in the US that elsewhere. So, the Semi will be very expensive, means cost little to run, and when configured for 500-mile range will have reduced weight carrying capacity. The revolution is likely to be real, but this vehicle is a first step, not the end game. A reason to have faith a future market segment for Tesla, but not something that will have a significant impact in 2023.

The Cybertruck.

Cybertruck and Tesla Roadster vs BYD U8 and U9?

Yes, I am ignoring the Tesla Roadster as too niche to trouble the overall statistics, but Cybertruck is like an ‘exotic’ for the mass market.

This is a vehicle will have a limited market potential in China or Europe. There are locations in the ‘other’ region, but for the next few years, this is a North America only vehicle, and in 2023 would only be expected to be ramping up production. Pricing is set to be aggressive, which means high volume production techniques are required, and those techniques require significant capital investment, and will likely be innovative and required ‘bedding down’.

In 2023 the Cybertruck could be critical to keeping consumers excited about Tesla, but perhaps little else, which be me important, as to be financially viable it may need LFP batteries that Teslas does not currently ship in the USA, or even Sodium-LFP batteries that neither Tesla nor anyone else has yet shipped in EVs anywhere in volume.

The Model ‘2’ (or A, or B or whatever is gets called).

The future lower priced Tesla that will sell in even far higher volume than the Model 3/Y could be a challenge for brand image. So far, the Tesla brand is somewhat premium, and low-price products can erode a brands premium association. Perhaps a separate, entry-level brand name could help? It is important not to cannibalise sales of the Model 3/Y.

Could this Model be launched while the Cybertruck is ramping up? For Tesla to “walk and chew gum” and launch both the Cybertruck and low-cost Tesla in the same year, the Cybertruck could be a US initiative and the low-cost model could be a China or even Berlin initiative.

The volume sales for this low-cost model would be less the USA and more Europe and ‘other’. Although there is a market in China, it is a very hotly contested and competitive market, and tesla would find itself in a role reversal: being the company without the high volume in EVs taking on the might and larger scale of BYD on BYDs home turf. To succeed in China, the low-cost Tesla would have to break new ground in ways that Tesla has not previously managed.

Even in Europe it would not be easy for this new lost cost Tesla, as Tesla would come up against the BYD, SAIC and perhaps Geely head-to-head. Tesla possibly still has brand credibility in EVs that could be an advantaged, although Geely has Volvo and Polestar brands, and SAIC has MG. BYD are the ones with a serious lack of brand image.

In the ‘other’ region, where many countries having an appetite for lower cost EVs but few available products, there are opportunities for low cost EVs, but BYD is expanding fast and will be a likely competitor in many markets by the time Tesla arrives.

Tesla Robots, powerwalls etc.

Tesla is not just an EV company. While robots seem unlikely to ship in 2023, there could become an even bigger part of the company than vehicles at some time in the future. Tesla also already has non-vehicle products that can be significant in terms of revenue.

Telsa overall in 2023: Growth will continue, but ‘faith’ may decline.

Elon Musk may never again become the world’s richest person, and Tesla may never achieve the 20 million vehicles per year that Elon has suggested, but there is still more growth possible.

The Model Y will likely become, as predicted, the largest selling vehicle in 2023. In might take several price cuts to achieve this position, but the Model Y can survive that, and Model Y sales will drive further Tesla growth.

When you look at the Model Y, it is a very simple, minimalist vehicle, that has every reason to low cost to produce.

Everything physical part that can be eliminated and where possible the function performed by software. While rivals have a powered sunroof that opens, with powered sunshade, the model Y has a fixed glass roof with no sunshade. While rivals have a central display and drivers display, the model Y has no drivers display.

Rivals have cameras, radars and ultrasonic sensors and some are now adding lidars, but while Tesla do still have cameras, they are not as high resolution as some others, and Tesla has dropped radars, and dropped ultrasonic sensors and vowed never to use lidars. If nothing else, this saves on costs.

Combine the volume, the simplicity and a company more vertically integrated than anyone but BYD, and it is hard to compete with the Model 3 or Y on cost.

The full potential of the Model Y has not yet been realised. Realising that potential may lower the brand image, but for 2023, sales are sales.

BYD: The Other EV Giant Goes Global in 2023.

BYD and Exports.

Prior to 2022, while BYD sold electric busses and other vehicles globally, around 99% over BYD consumer vehicle sales were all in one country: China.

In 2022, BYD began to get serious about exports. As is also the case with many things Tesla may do in 2023, ramping up takes about a year, so 2023 will be when the real export volumes begin for BYD.

The main export model so far is the BYD Atto 3, which sold 229,020 units in the first 10 months, but should reach at least 60,000 units per months in the first half of 2023 and could even exceed Tesla Model Y monthly sales by December, although BYD is unlikely to sell more Attos 3s than Model Ys over the who year until at least 2024, despite BYD targeting sales of 4 million vehicles for 2023.

Although the BYD is already selling the Han and Tang models in some countries, the volume models to follow the Atto 3 are expected to be highly acclaimed BYD Seal, and the potentially highly affordable BYD Dolphin. In 2023, BYD will have the Atto 3 selling in many ‘other’ and EU markets, but still be introducing their other products.

This means 2023 will provide a glimpse of what EVs look like with a ‘global’ BYD, but with mostly still only one high-volume product,

Who is bigger, Tesla or BYD, and who is growing faster?

Who is bigger at the end of 2022 depends on how you measure, but unquestionably BYD has been growing faster, and if that continues, will also be unquestionably bigger.

There are many articles proclaiming that BYD took the lead in EVs from Tesla during 2022. But then there are also many other articles declaring that no, BYD is not yet the real leader in EVs. The ambiguity arising because there are two main ways of counting ‘EVs’: with PHEVs and without PHEVs, and BYD is only the leader when counting with PHEVs. Without PHEVs, the figures for 2022 were 1.3 million for Tesla, and only 0.9 million for BYD. Even in the 4th quarter of 2022, Tesla shipped December 2022, Tesla was 20% ahead of BYD when PHEVs are not included. However, in Q4 2021 Tesla was 230% ahead, and on the current trend will fall behind BYD even when PHEVs are not counted during 2023.

While Tesla is targeting 50% growth per year and was close to achieving in in 2022, BYD did achieve over 200% growth, and is targeting over 100% growth in 2023.

Can BYD meet the growth target of 4 million vehicles in 2023?

Given Tesla is not considered certain to achieve 50% growth in 2023, how can BYD achieve over 100% growth in 2023?

While this sounds challenging, there are reasons why this growth may be realistic for BYD:

  • Annualising December 2022 sales for BYD even without further growth would already result in 2.8 million sales in 2023.
  • BYD repeating the growth of 2022 again in 2023 would result in 5.8 million sales in 2023.
    • If Tesla repeated its growth of 2022 again in 2023 it would result in only 1.8 million sales in 2023.
  • BYD has just added a significant number of export markets and can expect a rise in export sales.
  • BYD has key new models both still in early growth, and to soon be released.

However, BYD also has two key threats:

  • Sales are still too heavily reliant on China so there is vulnerability to a downturn.
  • Production is almost entirely reliant on China, which creates vulnerability to the effects of Covid-19 in China in 2023.

BYD Products in 2023.

BYD Yangwang U8 and BYD Yangwang U9.

GM has the Hummer EV, and it is an amazingly capable off-roader with astonishing acceleration and can crab-walk.

Mercedes potentially takes it up a notch with the upcoming EQG which an even do tank turns.

Now BYD introduces the Yangwang U8. Like the Hummer, it is an amazingly capable off-roader with even faster (0-100 in 3 sec) astonishing acceleration and can crab-walk. But it is more similar to the Mercedes EQG, and it can also do tank turns, and not just on a loose dirt surface, but also in a car park.

If even that is not enough, and the BYD adds being waterproof IP rated, and it is also amphibious, being shown here crossing a deep lake.

Arriving in Q2 2023 for US$145,000, the U8 is not quite as fast as a Model X Plaid, but for a similar price also offers ground-breaking off-road capabilities.

That is not all, and for those wanting even faster, BYD has also announced the U9 supercar, which can accelerate to 100km/h in just 2 seconds. Not just a one-off special, but a production vehicle price of just under US$150,000, yet able to compete on performance Lamborghini and even with the Rimac Nevara.

Neither Yangwang is likely to challenge a base Model Y in the sales race, but it could sell in far, far higher numbers than any previous similar vehicle.

Think your NIO EP9s, Lotus Evijas, Rimac Neveras and Pininfarina Battistas of the world, and the U9 is likely another one to add to the list.

YangWang U9 is the world’s newest electric hypercar

To understand why this is revolutionary, consider that all the other vehicles from the quote above are limited production vehicles with million-dollar price tags.

Even just one U8 and U9 touring each country where BYD is present, touring showrooms and featuring at drive days for journalists, could radically advance the brand image of BYD. These vehicles could have an impact beyond 100s of millions in advertising.

Even if the Yangwang vehicles are not a direct financial success, and even if the naming of the Yangwang sub-brand as bad as I think it is, these vehicles could turn out to be a masterstroke. The impact on the brand image could be revolutionary.

BYD Seagull, Dolphin, Seal and Sea Lion.

In 2023, first the Atto 3 ramps in sales in international markets, and then it is ‘bookended’ by the lower cost Toyota Corolla competitor the ‘Dolphin’ and the Tesla Model 3 competitor the ‘Seal’. Then that 3-model lineup will be again bookended by 2 new models: the Toyota Yaris competitor ‘Seagull’, and the Tesla Model Y competitor ‘Sea Lion’.

While I will expand this section later, the summary is there is a line u of 5 volume models of arriving on international markets, and that is before the BYD pickup/Ute arrives to select markets in 2024.

The BYD Difference: How can they lead in EVs?

Telsa has their elimination of all parts possible, high volumes and vertical integration that others will have difficulty matching as logic for why they can continue to emerge as dominant as vehicles evolve to become EVs, but what about BYD?

The total production volume of vehicles with battery, charger, plug and electric motors is already higher for BYD than for anyone else, so they have volume. They also even more vertically integrated than Tesla, making their own integrated circuits and most importantly, batteries, including the battery cells. Even Tesla now buys batteries from BYD, and while Tesla does make battery packs, these are made using battery cells from others. Both BYD and Tesla have advantages over all others, which for now means others will have advantegs in niches, but it will be hard to catch the volume of EV sales by Tesla and BYD.

Other EV producers in 2023: Hyundai/Kia, Geely, SAIC, GM, VW and Toyota?

Yes, there is a whole host new EV companies, from the Chinese NIO, XPeng, Li Auto, the US based Aptera, Canoo, Lucid, Rivian, Indie and Faraday Future as well as Fisker, Lightyear, Sono Motors, Togg and Vinfast etc, and while some of these will have a big long-term impact, none will have the scale in 2023 to make them particularly relevant to this page.

Similarly, BMW and Mercedes continue their progression to EVs, but it is not that exciting in 2023. Both continue to release EVs but seem to be transitioning to electrifying their line-up without changing who they are as a company or where they fit with the industry. Neither looks like to be headered towards going out of business-like Japanese brands appear to be, but neither appears to be able to use the transition to become one of the giants either.

Again, Stellantis (Fiat, Chrysler, Jeep, Peugeot, Citroen etc.) so far, is ‘also there’ but brings nothing really new.

Hyundai/Kia.

These ‘partner’ companies who most often each launch their own version of a vehicle with common underpinnings, as with the Hyundai Ioniq 5 and Kia EV6, as seem to share a common strategy:

  • Design and promote desirable award winning EVs while delivery very few to customers.

At the time of writing, the Australian Open tennis tournament sponsored by Kia is being held. The media is overloaded with promotion of the Kia EV6, despite the fact very few EV6 vehicles are being supplied to customers, and the waiting list is several years long.

Why advertise a car that is already sold out? Why is Hyundai launching the Ioniq 6 and Ioniq 9 when is seemingly cannot build more than a trickle of Ioniq 5s despite very strong demand?

The only explanation I can see, is that Hyundai/Kia do not yet have the EV production volumes to introduce new manufacturing techniques that will make these cars highly profitable. They may also be readying new battery technology which will also lower product cost.

The plan then becomes:

  • Design and promote a family of desirable award winning EVs while delivery very few to customers.
  • Build both consumer demand and a product portfolio, while readying large scale low-per-unit mafuacturing facilites
  • When ready, then deliver products in real volumes.

This is the only scheme I can see that makes sense. The current Kona EV and Kia Niro EV that are built on ICE vehicle platforms are already overpriced in comparison with the ‘pure’ platform-based siblings. The only missing step is readying EV platform version of these products, which will being their prices in line with

Geely: Volvo, Polestar, Lotus, Zeekr ….

Geely is a conglomerate with a complex strategy. Volvo will be EV only by 2030, with given each model once launched remains in production for at least 7 years, means they have launched their last ICE vehicle, in a transition running in parallel to Mercedes who will launch their one last ICE vehicle in 2023.

The Polestar 2 is an EV on an ICE vehicle platform, and that considred, is its amazingly competitve in the market.

All the Geely subsidiaries are likely are on a full EV path and likely to grow their market shares to become far larger entities than we are familiar with and will be on the rise in 2023.

SAIC: MG, Maxus, LDV, SAIC-GM-Wuling (SGMW).

Chinese state owned SAIC is another company to watch, with their MG4 set to make a significant impact in 2023.

GM: USA Only, but all-in one EVs.

While the rest of the world has BYD, the USA has GM and Ford. Since the specifics of the US are so well covered in many web sites and YouTube channels, this is only a quick summary of US specifics for completeness, and a quick overview for those unfamiliar with EVs in the US.

Ford has the F150 Lightning and the Mustang Mach-E EV, plus an interesting strategy to divide into:

  • an EV company that is not yet profitable and required contributions from ICE V sales in order to survive
  • an ICE vehicle company that depends on GM being wrong and Toyota being right.

The only ‘car’ now sold by Ford in the US is the Mustang, but the eclectic Mach-E is an SUV. Nothing else from the Ford range of SUVs and pickups has been announced as far as I am aware, which would mean no new EV in 2023, and the Ford Ranger Lightning EV to be launched in 2024 as a 2025 model.

Things are very different at GM, the company behind the EV-1, who, despite very good efforts, had a disaster with the Bolt-EV that was due to not GM, but their battery supplier.

The GM website reveal with the home page now declaring “We are committed to EVs for all”. a company that is all in with EVs.

The Bolt-EV and Bolt-EUV are back on the market, as are the expensive low volume Hummer pickup and Cadillac Lyric, which is a start, but not that impressive a line up. However, in 2023, they plan to launch the Blazer medium SUV, US$30,000 Equinox which is like an Atto 3 for the USA, the Silverado EV as an EV version of the 2nd top selling vehicle in the USA, and an SUV version of the Hummer and more volume for the Lyric.

There is still a question mark over battery strategy, but if GM can gain the volume base they desire in the US, they have a real change of emerging as a winner with EVs.

VW plus Toyota and the other Japanese Automakers.

The giants of traditional auto are VW and Toyota.

VW in 2021 looked like it was on a roll with EVs, but has since stalled, sacking the CEO who led the initial EV surge while he was on holiday, and is rethinking EV strategy. Toyota made a false start with the BZ4x and has since declared it needs to reboot its EV strategy.

Despite their might, 2023 is a year for both companies of defining EV strategy, not execution of EV strategy.

The main news about Toyota and other Japanese car companies will be likely be their declining sales and relevance. Sandy Munro, regards by many as an automotive industry guru, has predicted a decline in Toyota sales of 30% in 2023.

The Environment and the Two Speed EV Transition.

A transition to EVs takes around 30 years, which creates enormous pressure to start that transition if the threat of climate change is seen as real, and EVs are a key part of the solution.

There are still holdouts on whether climate change is real, and EVs are a key part of the solution.

Will belief that climate change is real threat again increase in 2023?

In 2022 there were many weather events that convinced more people that ‘climate change’, which should perhaps be relabeled ‘extreme weather’, is very real.

There were several new commitments and strengthened commitments to a timeline for zero emission vehicles during 2022. If the trend continues, there will be new commitments in 2023, but it does depend on both the weather, and politics.

The impact on consumers will come later, but on industry the impact is now.

In any one year, only 5% of vehicles are replaced with newly manufactured vehicles, and the percentage of those newly manufactured vehicles that are EVs varies from almost 0% to 80% depending on country, with and average that is still below 20%.

As 20% of 5% is just 1%, on average only 1% of vehicles are replaced by EVs per year at this time.

Even to be heading over a 20-year timeframe towards a goal of all zero pollution vehicles, that 20% new vehicles, has to rise to 100% of new vehicles, and that will take at least 7 years.

Some manufacturers are already locked in on a full speed transition, and they could gain an advantage if, as is very possible, deadlines move closer to 2030.

Every year, the percentage of people supporting action on climate increases, and so far, emissions keep rising. While a transition to EVs will also take decades to reduce emissions, the pressure to start increases.

The Environment and ‘who is cool’.

The Elon Musk and twitter story changes the link between Tesla and environmental causes and could deter some of the very people most motivated to buy EVs, but every market increasingly has non-Tesla options, and it seems unlikely to reduce EV sales which are largely supply constrained.

Conclusion: A lot of news, but cars largely ‘as usual’ in 2023.

The twitter saga will have some toll, the share price may fall further, and some lustre will come off the brand, but Telsa will continue to grow in 2023, despite becoming increasingly recognised as 2nd, and no longer 1st in EVs.

So, what other than Tesla?

In Europe and ‘Other’, the Atto 3 and MG4 will have the biggest impact, with the BYD Dolphin and Seal also likely to play some role. In the US it will really depend on how much GM can scale up production, and how many F150 Lightnings Ford produces. In all markets Hyundai/Kia could have real impact when they are ready to produce volumes, but so far that looks like being late in 2023 if at all in 2023.

In the biggest EV region of them all, it is hard to predict as there are so many more products. With the scale advantage BYD now has, they should grow even stronger, but much depends on batteries.

BYD is only the second biggest EV battery maker in the world, now trailing far behind the global leader who is also from China: CATL.

The most exciting innovations in 2023 are likely to be in batteries rather than the vehicles themselves. LFP batteries with manganese and sodium batteries could have an impact inside China, but outside China it will most just be interesting news to follow, not a change it what people can buy.

Overall, even if EVs sales double, which they just could, it will still be less than 2% of people globally who move to an EV. Most people will be affected more by reading the news, following stories and knowing people who now have an EV.

Comment?