BYD is the new leader in electric vehicles BYD is the new leader in electric vehicles BYD is the new leader in electric vehicles

BYD is the new leader in electric vehicles

Equities 5 minutes to read
Peter Garnry

Head of Saxo Strats

Summary:  Tesla lost its leading position in the EV market to BYD in Q4 2023 and the overall EV market is expected to grow significantly in 2024. Lithium carbonate prices have also fallen significantly, which will allow EV makers to lower prices and accelerate adoption. The US government has pushed ASML to block Chinese deliveries of its advanced chip-making machines impacting the company's revenue in China. However, long-term underlying growth drivers in datacenters, EVs, and general digitalization of the economy will still support growth over the next decade.

Tesla loses EV throne to BYD

What has been the obvious trajectory for over a year became a reality in Q4 2023 with Tesla losing its leading position in the fast expanding EV market. BYD delivered 526,409 battery electric vehicles (BEVs) compared to Tesla at 484,507 which exceeded estimates by a small margin. Given the strong ending to 2023 from Tesla and BYD, the 15 largest EV makers that we are tracking will likely have delivered more than 2mn BEVs in Q4 20233 for the first time in Q4 2023. This means that in 2024 those 15 EV makers will likely deliver more than 10mn BEVs which would equate to roughly 10% of all new passenger vehicles globally.

If this becomes reality 12 months from now then those 15 EV makers will have cumulatively delivered around 25mn BEVs since Q1 2020 which roughly is 0.65Mb/d reduction in oil demand that would otherwise have in the oil market.

The highest penetrated EV market is the world is Norway with around 22% of the outstanding passenger cars being EVs. This has so far led to an oil demand reduction of 5%. In 10 years from now and if batteries become cheaper and more powerful so they can be used for trucking then oil demand will begin to be drastically reduced.

In the meantime, we could have a situation where demand for gasoline drops way faster than diesel which in the future could force oil refineries to increase the price of diesel to make up for the losses in gasoline thereby increasing the cost of heavy transportation.

With a new year in front of us, it also worth looking at the key input factor for BEVs which is lithium carbonate used in the lithium-ion batteries. After a significant rally in lithium carbonate prices in 2021 and 2022, peaking out at prices up 1,400% higher than the lowest prices in 2020, lithium carbonate prices are down 83% from their peak. This will allow EV makers to lower prices without eating too much into gross margins and accelerate the adoption of BEVs.

ASML is caught in the technology fight between the US and China

ASML, a Dutch semiconductor equipment maker of lithography machines used for advanced chip manufacturing, has started the year down 4.4% over the first two trading sessions on news that the US government has pushed ASML to block Chinese deliveries before the January deadline for the export ban. ASML has said that the blocking has only impacted a few Chinese customers and revenue to mainland China is around 14% of total revenue. Chinese import data suggest that Chinese companies were busy taking delivery of ASML’s machines in the second half of 2023 before the new stricter export rules would go into effect.

How should investors think about ASML and the risks related to revenue in China given the ongoing technology fight between the US and China? For long-term investors it is really about their long-term expectations for growth. ASML is returning roughly 2.9% in dividends and buybacks which is a bit below the MSCI World Index at 3.2%. The long-term expected real rate return is 2.2% which means that global equities have a long-term expected real rate return of 5.5% annualised at current valuation. As ASML is returning less capital to shareholders than MSCI World any performance above global equities must come from higher real rate growth. Given the underlying drivers of growth for semiconductors in datacenters, EVs and general digitalization of the economy it is not unreasonable to think ASML will continue to deliver significantly higher growth rates than the overall economy over the next decade.

ASML share price | Source: Saxo

Shipping stocks are soaring on Red Sea escalation and rerouting

Maersk, one of the world’s largest shipping companies, has seen its shares rally 11.2% in the first two trading days of 2024 as the escalating situation in the Red Sea has rerouted almost all container ships from Asia to Europe south of Africa instead of through the Suez canal. The extra time spent on the seas and longer travel routes means higher freight rates and higher profit margins for shipping companies such as Maersk.

While in the short-term the events in the Red Sea is positive for Maersk and other shipping companies the longer term dynamics in the global shipping industry are negative. There are overcapacity and freight rates are back to normal levels. “Slowbalization” as IMF has recently coined the current period in terms of global trade volume will continue in the years ahead meaning that Maersk will experience low normal freight rates with low volume growth. Sell-side analysts remain sceptical of Maersk shares with a consensus price target 15% below the current price.

Maersk share price | Source: Saxo

The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
- Notification on Non-Independent Investment Research (
- Full disclaimer (
- Full disclaimer (

Boulevard Plaza, Tower 1, 30th floor, office 3002
Downtown, P.O. Box 33641 Dubai, UAE

Contact Saxo

Select region


Trade responsibly
All trading carries risk. Read more. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more

Saxo Bank A/S is licensed by the Danish Financial Supervisory Authority and operates in the UAE under a representative office license issued by the Central bank of the UAE.

The content and material made available on this website and the linked sites are provided by Saxo Bank A/S. It is the sole responsibility of the recipient to ascertain the terms of and comply with any local laws or regulation to which they are subject.

The UAE Representative Office of Saxo Bank A/S markets the Saxo Bank A/S trading platform and the products offered by Saxo Bank A/S.