BYD, the Chinese electric vehicle firm partly owned by Warren Buffett’s Berkshire Hathaway, became the world’s largest electric vehicle maker in the first half of 2022, wrestling the title from Elon Musk’s EV giant Tesla in another sign of the Chinese automaker’s resilience in the face of COVID-inflicted disruptions that plagued its rivals this year.
BYD sold 641,350 new electric vehicles in the first half of this year, compared to Tesla’s 564,743, company filings show. Sales at BYD are also growing at a faster pace than at its American counterpart. In the first six months of 2022, BYD sold 486,771 more cars than it did in the first half of 2021, representing an increase of 315%. Tesla, meanwhile, sold 178,693 more vehicles in the first half of this year compared to last, a 46% year-on-year bump.
However, the companies’ sales don’t represent an apples-to-apples comparison. Many of BYD’s car sales are plug-in hybrids and use gasoline engines to supplement battery power. Tesla, on the other hand, exclusively sells fully electric cars. China counts both types of vehicles as “zero-emission.”
BYD’s stock price in Hong Kong has barely budged since the firm released the sales figures earlier this week. But investors have been high on BYD since the start of this year despite the bear market in the U.S. and a challenging environment in China. BYD’s stock price has risen nearly 25% since the start of this year. In that same timeframe, Tesla’s stock price in New York has dropped 42%.
Buffett’s Berkshire Hathaway was an early backer of BYD, pouring $232 million into the company in 2008. Now worth $7.7 billion, the investment is one of Berkshire’s most lucrative bets.
Musk, meanwhile, was an early doubter of BYD. “Have you seen their car?” the Tesla CEO told Bloomberg News in 2011. “I don’t think they have a great product.”
Tesla has attributed its sluggish growth early this year to COVID-19 lockdowns in Shanghai that disrupted production at its gigafactory near the city. “We [lost] a lot of important days of production. And there are sort of upstream supplier challenges where a lot of suppliers also lost many days of production,” Musk said in a quarterly earnings call in May.
Dan Ives, analyst at Wedbush, recently estimated that Tesla produced 70,000 fewer cars this year due to the lockdown in Shanghai. On the earnings call, Musk also promised that Tesla’s Shanghai plant would “come back with a vengeance.” After two months of being closed or operating at reduced capacity, Telsa’s gigafactory returned to full capacity in early June.
But Tesla’s comeback has not arrived fast enough to catch up with BYD’s spring surge.
Unlike Tesla, BYD was “totally resilient from the Shanghai City lockdown and [the] sector’s supply-chain disruption,” Citi analysts wrote in May. BYD’s main production base is in China’s southern province of Guangdong, a region that did not face lockdowns as severe as the one in Shanghai.
The Citi analysts also said that BYD’s supply chain is “vertically integrated,” meaning it produces more parts in-house and is less dependent on outside suppliers than its rivals, helping shield the company from supply-chain disruptions. BYD’s supply-chain success may be helping turn its competitors into potential customers. BYD plans to sell batteries to Tesla “very soon,” Lian Yubo, BYD’s executive vice president, told Chinese media last month. Tesla has not confirmed the statement.
BYD’s insulation from the Shanghai lockdown helped it leapfrog rivals to become the second largest automaker of any kind this June. It now ranks behind only FAW-Volkswagen in terms of monthly car sales. In January, BYD was China’s seventh largest automaker by sales.
BYD’s recent tear has also defied a government probe into alleged pollution at its factories in Changsha, China that threatens to tarnish the company’s environmental accolades.
“The story of BYD’s resilience throughout lockdowns and the chip shortage outweighed [the probe],” Bridget McCarthy, market research analyst and head of China operations at Boston-based hedge fund Snow Bull Capital recently told Fortune.
This story was originally featured on Fortune.com