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.