Batteries, Storage and Electric Vehicles

In the first days of January 2024 Tesla reported that it had delivered 484,507 vehicles in the fourth quarter of 2023, and BYD, of Shenzhen, reported sales of 526,409 battery-electric cars in the same quarter (company figures, reported). For the first time, the company that had led the world in battery-electric cars since about 2018 had been outsold in a quarter. Tesla still led for the full year, about 1.81 million deliveries against about 1.57 million BYD battery-electric cars, and it was narrowly ahead again for 2024. But in 2025 BYD sold 2,256,714 battery-electric cars against Tesla's 1,636,129, part of 4,602,436 new-energy vehicles including plug-in hybrids (company), and Tesla's deliveries fell for a second straight year.

The two companies had reached the same market by opposite routes. BYD began in 1995 as a maker of batteries for mobile phones, bought a small state carmaker in 2003, and built its cars around its own cells, motors and chips. Its Blade battery of 2020 made lithium iron phosphate (LFP), a cheaper, safer and less energy-dense chemistry than the nickel-based cells most Western carmakers used, acceptable for passenger cars at scale. It ended production of combustion-only cars in March 2022 and, when lithium carbonate fell from about CNY 600,000 a tonne in November 2022 to about CNY 60,000–75,000 by mid-2025, it passed the savings into prices faster than rivals who bought their cells. Tesla designed its cars and software in California and bought most of its cells, first from Panasonic and later also from CATL, the Ningde company that supplied LFP cells for Tesla's Shanghai-built Model 3 from 2020 (reported). CATL sold cells to almost every carmaker in the world. BYD sold most of its cells to itself.

Meanwhile the same cells were changing the electricity grid. Tesla deployed a record 46.7 GWh of grid storage in 2025, and its energy generation and storage business earned about $12.8 billion of revenue (company). The US installed a record ~18.9 GW / ~51 GWh of batteries in 2025 (Wood Mackenzie and ACP), and in California and Texas batteries now supply a large share of the evening peak. This chapter explains the economics of the battery, the chemistry and scale race that China won, and the two markets the battery created: electric vehicles and grid storage.