Tesla Motors Inc (TSLA) Battery Competition: BYD CO LTD H SHS(BYDDF)

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Tesla Motors Inc (NASDAQ:TSLA) will soon have to battle China-based  BYD CO LTD H SHS(OTCMKTS:BYDDF), as the energy storage producer ramps up production of batteries by over three times. Shenzhen-located BYD, which is backed by Warren Buffett, has announced plans for the next three years. In the period, the battery maker will expand production to include 6 gigawatt hours of production, and if demand persists, continue the same expansion over time.

Tesla Motors Inc. has already proposed to produce $5 billion at its Nevada Gigafactory. BYD’s current plan would put the Chinese battery-maker in direct competition: 10 gigawatt hours to 34 gigawatt hours by early 2020.

BYD hopes to expand its production from its current China-based facilities to competitively priced locations, such as Brazil.  Currently, BYD is the sixth-largest manufacturer of batteries, says Lux Research studies, with the largest producer being Panasonic Corporation. The former already supplies cells and batteries to Tesla Motors Inc (NASDAQ:TSLA).

In recent times electricity storage sector has begun rapidly expanding. As solutions are being innovated to harness renewable energy sources, such as wind power or solar power, integrating them into storage technology for the non-production phase.

Therefore, the major players in this segment are now beginning to take pole positions, as others begin to enter the market. By 2019, the market size for electric batteries is expected to grow to $1.5 billion, says GTM Research. While these are numbers for only the U.S. markets, globally too the growth pace for electric batteries is expected to be as phenomenal. In terms of units consumed, GTM Research indicates that U.S. markets are expected to triple to 220 MW this year.

BYD began in 2003, surprising many by entering the automotive business, and is currently a top-ranking Chinese automaker. Overseas, in 2013, BYD opened two manufacturing units in Southern California, where buses and batteries are produced. BYD tripling its production will definitely place near Tesla Motors Inc (NASDAQ:TSLA).

Lisa Ray

Lisa Ray primarily covers Retail and Healthcare. Lisa Ray has completed her MBA (Finance) and an avid market tracker. She is a stock market analyst who closely tracks US markets along with other global markets like India. She has been expressing her views for years about markets and also advises various clients.

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