Tesla is facing major competition in China. Here are its biggest rivals

BYD — or Build Your Dreams — is probably Tesla’s best-known competitor in China.

The Shenzhen-based automaker kicked off a new price war by unveiling a smorgasbord of new and updated models. That includes both the dirt-cheap e2 and Seagull electric hatchbacks and the pricey Yangwang U9 electric supercar. BYD has also teased an electric pickup that will compete with U.S.-made electric trucks, such as Ford Motor Co.’s F-150 Lightning and Tesla’s Cybertruck.

BYD briefly beat out Tesla last year to become the world’s largest EV maker by quarterly sales, boosted by rapid expansion abroad and cheap offerings. After sales dropped in the first quarter of 2024, Tesla regained its title. However, BYD’s sales of new-energy vehicles grew sharply between January and March, while Tesla’s sagged.

Xiaomi is basically the opposite of BYD. It’s both the newest member of China’s EV club and one with a significant lack of automotive street cred and experience. But it makes up for that with high-tech specifications, consumer enthusiasm, and cheap models.

The Chinese tech giant is best known for its smartphones — and perhaps now for the SU7, a tech-heavy electric sedan it launched on March 26. Not only is the SU7 cheaper than Tesla’s Model 3, Xiaomi claims it outperforms the electric compact.

On Monday, Xiaomi CEO and founder Lei Jun announced that Xiaomi had produced 10,000 units of the SU7 after just 32 days of production. He’s previously said that Xiaomi’s factory in Beijing can build 40 cars every hour, which comes out to one new SU7 every 76 seconds. And, as of April 30, Xiaomi has delivered 7,058 units of the SU7, a fraction of the 88,063 “locked-in” orders the company has accumulated.

Xiaomi has pledged to invest $10 billion over a decade to produce cars. Last year, it became one of the few new players in China’s EV market to win government approval. Lei said in December that the company aims to become a top global carmaker in 15 to 20 years.

Nio has been described as the embodiment of the threat Chinese automakers pose against their Western counterparts.

The Shanghai-based firm employs thousands of workers in research and development even as it takes a major loss on every car it sells. Nio, like BYD and other carmakers, is a major beneficiary of generous investments from local government bodies. Its factories are reportedly heavily automated, allowing for faster construction of its cars, which generally land in the premium market.

In recent months, Nio has licensed its technology to at least one startup and expanded its battery swap services to drive up its stature in the market. The latter will also help sooth consumers’ worries about range anxiety, or the fear that their EV will run out of energy before reaching a charging station.

Nio has reported strong sales this year, notching a 21.2% increase year-over-year in units sold during the January to April period. The company delivered 15,620 vehicles in April, a 134.6% year-over-year increase.

Beijing-based Li Auto is one of China’s biggest EV makers after a strong 2023.

Unlike most new-energy vehicle makers, Li doesn’t sell plug-in hybrid cars and only recently launched a battery-electric car. Instead, Li makes “range-extended” EVs that have a gasoline-powered generator to recharge the battery if it gets too low. Unlike plug-in hybrids, Li’s cars lack both a gas engine and traditional transmissions, relying only on an electric motor.

In March, the company launched the Li Mega Multi-Purpose Vehicle and updated versions of three range-extended models. In order to deter range anxiety — something its long-range cars are designed for — Li is building charging stations. By the end of 2024, it aims to have 2,000 stations across China.

Geely got into the EV market in September 2020, when it launched its first electric platform. Since then, the Hangzhou-based automaker has invested heavily in new-energy vehicles, creating the premium-EV brand Zeekr in 2021 to compete with Tesla and BYD. In 2023, Geely said it would launch a new line of EVs and new models of the Geely Galaxy.

Geely also owns major stakes in Swedish EV brand Polestar, British sports and luxury carmaker Lotus, and the London Electric Vehicle Company. Volvo is also majority owned by Geely.

Zeekr told CNBC in April that it has “already outsold Tesla in some areas” of China, citing its internal sales data. Zeekr also plans to start selling right-hand drive cars in Hong Kong and Macao this year, with the models entering Singapore later.

In October, the Jiyue 01 — the first EV from a joint venture between Geely and tech giant Baidu — was launched. The Jiyue comes with a driver assistance software that employs both a high-precision map and cameras to analyze the environment.

Xpeng is probably best-known for its rapid advancements in EVs — and copying Tesla. The company was founded not long after Tesla launched in China; CEO He Xiaopeng told Quartz in 2018 that “one of the reasons Xpeng was founded was because Elon Musk made Tesla’s patents available.”

“It was so exciting,” he said.

Xpeng’s models are mainly targeted in one of the most crowded areas of the market, in the $30,000 to $42,000 range. Although that’s largely worked for the company so far, Xpeng is moving to sell less pricy cars to capture more of the market.

Earlier this year, Xpeng announced plans to launch a new cheap EV brand with models priced between $14,000 and $21,000 and focused on “AI-enabled smart driving” technology. The Mona — Made of New AI — brand is set to launch in June, according to the automaker.

And, in 2023, Xpeng agreed to acquire the self-driving vehicle unit of Bejing-based Didi — a ride-hailing company often compared to Uber — for $744 million in stock. That deal followed a July partnership between Xpeng and Volkswagen to develop new EVs for China under the VW brand.

GAC Aion, a subsidiary of the state-owned GAC Group, is one of four EV brands that sold more than 400,000 cars in China last year.

The six-year-old company’s first success was with the Aion Y, a $17,000 to $22,000 compact hatchback launched in April 2021; the company sold 34,108 units that year. In December, Aion claimed made its one-millionth in the form of the Hyper HT, an electric SUV under its premium luxury brand. Three models have been launched under the Hyper brand, including the Hyper SSR all-electric supercar.

Wuling — along with BYD, Aion, and Tesla — was one of the few EV brands that sold more than 400,000 cars in China last year. The brand’s cars are made by both Wuling Motors and SAIC-GM-Wuling, a joint venture between General Motors and two Chinese automakers.

The company has become known for its smaller EVs like the Wuling Hongguang Mini, a two-door vehicle described as a “pod” that has been one of the best-selling EVs in China. The car’s popularity comes both from its compact design and its dirt-cheap price that’s lower than BYD’s Seagull.

Wuling plans to sell around 700,000 new-energy vehicles in 2024 and has launched a series of new vehicles in recent months, including the Bingo Plus hatchback and Starlight sedan.