Tesla is reportedly pushing to acquire a 20% stake in China’s third-largest electric vehicle BYD for $36 billion, according to Chosum.com. The deal includes buying 10% of BYD’s stake in cash and exchanging the remaining 10% for Tesla stock.

  • BYD was ranked third in the Chinese EV market last year, behind GM Wuling (165,609 units) and Tesla (138,069 units).
  • BYD also ranks fourth in the world’s battery market, making it the most competitive Chinese EV market that can make both batteries and finished cars.
  • Tesla’s attempt to capture a stake in BYD reflects its aim to dominate China’s EV market and secure battery supply stability.
  • Analysts also interpret Tesla’s move as an attempt to avoid risks with the Chinese government.
  • Tesla could also help BYD in autonomous and luxury electric vehicles.
  • Tesla is already expanding sales in China by producing a semi-mid-sized SUV Model Y after building its first overseas factory in Shanghai in 2019.
  • Last year, Tesla’s Model 3 mass-produced in Shanghai hit top sales of 138,069 units.

Tesla stock is currently gaining. TSLA: NASDAQ is up 0.41% on premarket.