An EV Odyssey

December 28, 2023

Analysts expect BYD to pass Tesla for fully electric vehicle sales this quarter, to become the most popular EV maker. Although Tesla is expected to (narrowly) beat BYD in terms of revenue, income, and market capitalisation; the gap between the two is shrinking. Bear in mind Tesla only sold 3,456 more EVs than BYD in Q3 23, thus BYD overtaking Tesla (in fully electric sales) should not come as a surprise. However, BYD surpassing Tesla is far more symbolic than we realise, as it represents a shift in the global automotive leaderboard. Although the Toyota Group is still the biggest automaker in the world, with 10.65m sales in 2023, BYD has cracked into the top 10 and sits in 9th place. This is a significant achievement and although many critics will argue that (Chinese) state subsidies have been a major factor, others will point to the fact that BYD has emerged from the most competitive (and innovative) EV market in the world. Looking forward, 2 key geo-political factors may slow BYD in 2024, one being the EU investigation into Chinese subsidies and the other being the (escalating) tension between the US and China.

The International Finance Corporation has announced it will be providing a €35m loan to Karsan, a Turkish automotive manufacturer, to help bolster its EV production. €25m of the loan will be deployed to fund its working capital, whilst the remaining €10m will be used to support its acquisition of IP rights and technological know-how around electric buses. It is important to remember that electric buses have a longer order-to-delivery period, than passenger EVs, hence the high amount portioned out for working capital.

Tesla is poised to fall short of its (ambitious) target of delivering 2 million EVs this year, even though the company is on course to deliver a record c473,000 EVs in Q4 23. This should not take any shine off Tesla’s great 2023, as it is on track to deliver c1.82m EVs globally, which represents a 37% increase from 2022. Tesla has aggressively cut prices throughout 2023 to help boost sales, as Mr Musk made it abundantly clear (in Q3 23) that he favours volume over margin(s). 2024 signals the start of a new era of intermediate low-growth period for Tesla, as the company has been growing at a hyper rate for the best part of a decade. Early analyst consensus for EV deliveries for 2024, ranges from 2.04-2.2m depending on their stance on how quickly interest rates and battery material costs fall.

The EU and the UK have agreed to delay the rule of origin from January 2024 to January 2027. Originally, starting from the 1st of January 2024, the EU intended to enforce a 10% tariff on EVs being imported, where less than 45% of the EV parts by overall value, or less than 60% of the components of the battery, had been sourced in the UK or EU. This rule of origin came into existence due to Brexit. This would have resulted in higher costs for British EV firms and materially impacted the UK and European EV market. However, both sides have recognised the disruption that COVID-19 (and other macroeconomic & geo-political events) has had on (EV) supply chains. Thus, maintaining tariff-free trade for EVs will guarantee consumers have a greater choice of affordable EVs, at a time when we need all drivers to make the switch. Extending this rule to 2027 gives both sides time to play catchup by fleshing out their supply chains.

The California Energy Commission has announced that through its Clean Transportation Program, it has awarded The Mobility House, $2.9m in grants for a project that allows school buses with bidirectional charging. This is an innovative project as it essentially turns these buses to act as mobile energy storage units, whilst also boosting grid resilience and stability. This project will install 12 bidirectional chargers at 4 California schools and leverages vehicle-to-grid (V2G) technology. This allows (participating) school districts to generate revenue, via V2G, alongside benefitting the environment.

Daimler has announced that 5 customers (Amazon, Air Products, INEOS, Holcim and Wiedmann & Winz) will trial its liquid hydrogen-powered fuel cell trucks, from H2 2024 onwards. The 5 semi-trailer tractors will be deployed in different long-haul applications, on specific routes in Germany, such as the transport of building materials, sea containers or cylinder gases. Daimler, and the 5 aforementioned customers, are using this trial to help create a lighthouse project (a small-scale but big-picture project) to illustrate that decarbonized transport with hydrogen-powered trucks is (already) possible. We champion and believe this trial will help investors and companies gain confidence in this technology. One of the main challenges that has hindered hydrogen adoption in trucks is evidence; how many miles/kilometres can(/has) it achieve(d), and how feasible is it? Essentially investors need to see evidence of the theory being applied in real life. This trial will help quell some of these reservations, as Germany has the best hydrogen refuelling network in Europe and arguably in the world.

BYD has announced it has selected Szeged, in Hungary, to build its first European car factory, which will produce EVs and plug-in hybrids. This is also a strategic play by the BYD management team, as opening a factory in Hungary, might help the automaker avoid any import tariffs that may result from the EU’s anti-subsidy investigation. Furthermore, the Hungarian government has stated it will provide subsidies for the BYD plant, although it will only publish the amount after receiving the EU’s approval. Bear in mind, that BYD already has one plant in Hungary, in Komarom, however, that solely focuses on producing electric buses. This new factory will have a capacity of producing c200,000 cars annually, as the company aims to obtain a 10% European market share by 2030.

Starbucks (UK) and Osprey Charging have unveiled the first 3 rapid charging points for a Starbucks drive-through in Aberdeen (Scotland). At this location, the three 75kW charge points are compatible with every EV and typically add c100 miles of range in c30 minutes. This is the first of many new rapid charging facilities the 2 companies will work on, with St Johns Retail Park in Bedford, expected to be the next location.

First West has announced it has had c53m passengers use its buses, which is a c15% YoY increase in patronage across its network for 2023. This is great news as patronage was a key metric being monitored in 2023 by all bus operators. Although society, in the UK, has moved on from the COVID lockdowns, COVID-era behaviours persist. Behaviours such as working from home and the seasonal rise of COVID cases leading to less public transport use, continue to this day resulting in lower bus patronage. First West operates routes in Bristol, Bath, Weston-Super-Mare, Wells and the surrounding towns and villages. The bus sector has also had to battle challenges such as driver shortages and (ongoing) increases in (operating) costs. However, it seems the bus sector has seen the worst of it, as the majority of bus operators have an optimistic outlook for patronage, revenues and punctuality in 2024.


RevFin, an Indian EV financing digital platform, has raised c$14m in a Series B round, led by Omidyar Network. Investors such as Asian Development Bank, Companion Capital, Green Frontiers Capital and LC Nueva also participated. This startup focuses on loans for electric 2-3 wheelers, EV batteries and EV conversion kits. The capital will be used to scale up its loan book and marketing push.