China’s BYD shows off new sports car amid tight competition with Tesla as Elon prepares to return

China’s BYD launched a new high-end sports car called the Denza Z on Wednesday at Auto Shanghai, going after the same luxury segment owned by Porsche and Mercedes.

The car sat under a black cover on the show floor before being unveiled. Wang Chuanfu, the company’s founder, stood nearby with his team, beaming as they watched the awed crowd.

The announcement happened at China’s largest auto show in Shanghai, where dozens of carmakers, both local and foreign, are fighting for space in a brutally competitive market.

The 10-day show is where the strongest players in China’s EV scene come to prove they’re not just fast but dominant. BYD is already the top EV brand in China, with most of its cars sold domestically. It also overtook Tesla in global sales last year.

BYD expands luxury reach as Tesla struggles with trade war

Tesla released its latest financial results on Tuesday, reporting a 9% drop in revenue, a 20% fall in vehicle sales, and a 71% crash in net income from the same time last year. The drop came as Trump’s new tariffs made things worse for carmakers importing into the U.S.

While Elon was dealing with that, BYD was stacking wins. The Denza Z had already been leaked online earlier this year. On Wednesday, it was finally shown in full.

A BYD rep said the car would be loaded with high-end features and advanced tech. The Denza brand started as a joint effort with Mercedes-Benz, but it’s now 100% controlled by BYD. Earlier this month, they launched it in Europe.

The company’s core line focuses on cheaper EVs and hybrids. But Denza pushes them into the luxury category. Analysts say that shows how deep their pockets go.

In its 2024 annual report, Porsche said sales in China dropped 28% compared to 2023, blaming China’s economy. Denza came for that exact market. The company hasn’t announced pricing for the Z, but its other luxury SUV, the N9, starts at 389,800 yuan ($53,453). Their basic Song Plus SUV sells for around $18,500.

BYD also launched the U8L, a 1-million-yuan ($137,000) SUV under its Yangwang brand, on the same day as the Z. Earlier this month, that line passed 10,000 vehicles sold.

BYD accelerates sales as trade war shapes global strategy

BYD is also thinking beyond China. It wants to sell more than 800,000 cars overseas in 2025. Its chairman said last month the company plans to keep its cost edge by making cars inside the countries it sells to. That way, tariffs won’t touch them. The U.S. imposed a 100% import duty last year under the Biden administration. That move kept BYD out of America before Trump even got back in office.

Last year, BYD sold 4.27 million vehicles and made $107 billion—29% more than the year before. Tesla, in comparison, made $97.7 billion and sold 1.79 million battery-only cars. That was Tesla’s first drop in annual deliveries, down 1.1%. This year, BYD already sold over a million new-energy vehicles—a 60% jump from Q1 2024. That includes battery EVs, hybrids, and commercial models.

In February, BYD dropped “God’s Eye,” a driver-assistance system meant to compete with Tesla’s Full Self-Driving. It came standard for most cars in China. Then last month, they launched a battery charger that adds 250 miles in five minutes. Tesla’s Supercharger adds 200 miles in 15 minutes. That’s a big difference in a market moving this fast.

Still, battery wars are heating up. This week, CATL—the largest EV battery maker in the world—announced a new cell with a longer range than anything BYD offers. It claims 320 miles on one charge.

The China Passenger Car Association said Tesla had just 6.1% of the domestic market. BYD sells both hybrids and battery EVs, while Tesla sticks to just battery-powered ones. In a country where charging isn’t always reliable, that matters. BYD also came close to Tesla’s full-electric shipments last year—1.76 million versus 1.79 million. It was a close gap, but with how things are going, that gap might not last.

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