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The Price War Between Tesla and BYD is Just Getting Started

With Tesla's latest price cuts, BYD buyers in China are cancelling orders to buy a Tesla. The price war is on.


Tesla and BYD Prices

A price was was inevitable between Tesla and BYD. Customers are doing things that are making this appear as if it is going to have a huge effect on both companies. It all started when Tesla massively lowered its prices in China to come close to the cost of BYD's vehicles.

Tesla and BYD are two of the biggest EV car manufacturers in the world. By 2030, they will likely be the top two EV makers in the world. BYD is trying to move up in the EV world and Tesla has come down a little. The BYD seal was intended to be a Tesla Model 3 RWD competitor. The price between the two is about the same now. The seal is also coming to other countries.

BYD is going to have a battle on its hand when it comes to EV's and competing with Tesla. Tesla sells the base Model 3 at an almost identical price to the BYD seal in China. The BYD Seal is a little longer. BYD has a little more space. The Tesla Model 3 RWD has a little more boot space. They both have a battery pack size and chemistry that is nearly identical.

There is much less motor power in the BYD seal compared to the Model 3 RWD - or you can upgrade the BYD seal to have more power for a few thousand dollars. There is one big factor between them, however.

The Model 3 RWD charging speed is much faster. However, most people are going to charge at home. Tesla has a better charging network with its Supercharger network. The BYD has features that many Tesla buyers want - a heads up display and a potentially nicer interior.

Tesla has much better safety systems than the BYD seal. Tesla also has built in hardware and software for autonomy. There are pros and cons to each car.

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Who Will Win the Price War?

Now that Tesla has dropped prices and BYD has just raised prices, this is going to have to have an affect on both car makers. Tesla will sell more vehicles and possibly take some sales from BYD.

BYD sales people have said that customers are going into dealerships within the last 7 days just to cancel their orders - in particular, the BYD seal. Is this a good thing? It simply means that there is good competition. Both companies are going to have to improve their product.

BYD is going to have to be much more careful in how it prices its vehicles. Both cars are around $33,000 for each. This is a problem because it's so close to gas car equivalents like the Toyota Camry. These EV's are now attainable for middle class families.

Now that Tesla has brought down prices and BYD has increased prices, customers are being much more picky and considering a Tesla Model 3 instead of a BYD seal. Tesla got 30,000 additional orders within 3 days and this could have come from people who had a BYD seal reserved and instead decided to get a Tesla vehicle.

Tesla's VP in China, said that the Tesla Model 3 will probably stabilize at these current levels, making them VERY competitive.

Who will win the price war between BYD and Tesla? I think Tesla has an edge here, especially with autonomy.

For more information, see this video from The Electric Viking:

In Related News: Tesla Model Y to Lead European Car Market

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Jeremy Johnson is a Tesla investor and supporter. He first invested in Tesla in 2017 after years of following Elon Musk and admiring his work ethic and intelligence. Since then, he's become a Tesla bull, covering anything about Tesla he can find, while also dabbling in other electric vehicle companies. Jeremy covers Tesla developments at Torque News. You can follow him on Twitter or LinkedIn to stay in touch and follow his Tesla news coverage on Torque News.

Image Credit, Tesla, Screenshot