Since BYD hit 3 million sales mark in 2023, many people are already making projections about its sales in 2024. I will try to do my own estimation now.
First of all, let’s talk about some of BYD’s advantages over rest of the market
Full lineup of NEV products from 70k Seagull to 1.06m U8, so will not see overall sales affected too much by over competition in any given segment
Product Offerings in segments without much competitively priced NEV alternatives like off-road vehicles, light trucks & UTEs (coming up)
Industry leading vertical integration & scaling leading to huge cost advantage over rest of the automakers
Brand recognition as the national NEV champion + largest NEV dealership network → large # of store visits (Customers shopping <250k market will always visit BYD store for comparison)
Ability to scale up production and deliver cars to store quickly → enough capacity to meet demand surge in any mass market segment
In general, BYD just has a lot of advantage due to its name and brand recognition. From this, I think it can keep its margins & NEV market share even as more legacy brands (JV & domestic ones) bring more NEV models on the market.
First, let’s talk about the domestic market size. In 2023, the whole Passenger Vehicle sector in China was at least 21.2 million with 7.29 million NEVs (34.4%). Let’s say this grows to 22 million with 45% NEV penetration in 2024, the full NEV market size would reach around 10 million. If we just assume BYD will keep NEV market share of about 33% in domestic PV market, then it would sell 3.3 million PVs domestically.
A good question at this point is whether that’s a high or low estimation. I would like to do a deeper dive breaking down Chinese market by price segment, but I don’t have that data around right now. I will say that there are both reasons it could end up higher or lower. Let’s just first talk about the challenges in various segment.
First, I think it’s quite clear that BYD advantage is the largest in sub-150k market. Its various DM-i models + Seagull & Dolphin are quickly pushing ICE cars out of the market. If certain legacy JVs are forced out of the market (like Nissan & Honda) next year, BYD will gain the most from that. Seagull will have full year of sales. That alone could be an additional 200k units. BYD will add Yuan Up entry level SUV that will likely lead to higher Yuan family sales. Qin will likely see a refresh product that could lead to higher Qin family sales. This is clearly the most competitive segment for BYD. The major headwind here are increased efforts by Geely, Chery, GAC Aion and Wuling in putting out new affordable NEV models. I do think Geely and Chery will increase their market share here. The question is whether that comes mostly from BYD or other EV makers or legacy? Regardless, I see this as the segment likely to see most increased sales from BYD. But I don’t see their NEV market share in this segment changing significantly.
Next is the 150-229k market. This is a market that does not require Lidar, but will over time require increased L2+ ADAS features like APA, RPA, LCC+ and maybe Highway NOA. This is basically the segment that Tesla, Li Auto and Huawei don’t play in. BYD’s dominance here through Song family is quite clear. Increasingly, Han, Seal and even Tang have been pushed toward this segment due to price pressure from above. BYD still have quite the advantage here. This is also another segment where BYD is likely to be a big winner if one or more of the legacies ICE automakers pull out of China. Leapmotor is likely a major competitor here next year. Geely, Deepal and Chery will also be more competitive. This is another segment we are likely to see more BYD models next year with different Seal and Sea Lion models as well as Han and Tang refresh. Overall, it’s going to very competitive segment. I will not be surprised to see BYD’s NEV market share here drop. I don’t know if Song family can maintain its huge sales number. Any growth here will come from higher NEV penetration.
Next segment is 230k-600k. I classify this all in 1 segment, because it is the market where BYD has to face Huawei, Li Auto, Tesla and NIO. Li Auto and Huawei have both announced huge growth in 2024 over 2023. While good chunk of that will come from BBA, their presence limits BYD’s growth here. BYD’s success in this segment really depends on how well their L2++ ADAS deployment is received. Will BYD be regarded in the 1st tier of smart cars? I think Tesla will be hard pressed to even keep its current sales level let alone its market share. They key here are Denza’s development. Will N7 sales pick up. Will the rumored new motor systems for Denza models impress the market and revive Denza’s fortunes. That along with improved AI technology and interior will determine whether Denza sells 10k per month vs 25k per month. The latter will be a huge success. I think they can get there by the end of the year with N9, new sedans and D9 refresh. Beyond that, I think BYD will pick up a lot of additional sales from its new pickup truck and its off road FangchengBao family. I could see them selling 20k per month of Leopard-3/5/8 by end of the year. There is just no competition here. So, if BYD does well in AI, I can see huge pickup here in Denza and FCB family. I would imagine 350k between the two brands vs about 130k this year. We will see less sales here from Han/Tang (due to price reductions), but new Sea Lion model with Highway NOA and Pickup trucks likely will lead to increased sales from the mass market brands too. I’m generally optimistic for BYD, so I think they will actually see higher NEV market share and higher sales in this segment.
Finally, 600k+ is basically the YangWang segment. This won’t be a large volume market by volume, but I could see 5000 per month between U6, U8 and U9 by end of the year. That is huge for revenue and profits. BYD could be one of the largest players in the 1 million+ RMB market.
Beyond domestic PV market, I think there are lots of growth left in export market. If we include both the official exports and exports through third parties, we could see BYD easily average 50k per month over 2024. That works out to 600k for the full year. We will also see probably a huge growth in commercial vehicles. T5DM is start of BYD’s effort to really impact the commercial vehicle market. I think they end up with 50000 truck type of sales for the full year. Overall, they will end the year with around 4 million sales. That to me is a reasonable target for 2024.
Thanks a lot, I like your assumptions. Could you please share your thoughts behind the 600k international target?
Really interesting! I was trying to do my own calculations/estimates and I thought overseas sales could almost triple. Seal, Dolphin and Seagull are much more attractive models than Atto. Also production in Thailand and Uzbekistan coming online.
Still I couldn't really see where all these cars would be able to sell in that amount especially if tariffs start in Europe during the year.
How do you see the geographical distribution of the 600k sales?