BRICS expands membership, adding Indonesia, Malaysia, and Thailand

By bno - Taipei Office December 30, 2024

The BRICS bloc, a coalition formed by Brazil, Russia, India, China, and South Africa, is broadening its reach as it seeks to challenge the dominance of the US dollar and reshape global financial and economic systems.

The group announced it will add three new Asian partner countries – Indonesia, Malaysia, and Thailand – from January 1. The expansion underscores BRICS' growing ambition to deepen ties across the Global South.

Indonesia's inclusion is particularly significant. As the world’s fourth most populous country, following BRICS members India and China as well as the United States, Jakarta’s participation bolsters the bloc’s demographic and economic clout.

The addition of Malaysia and Thailand further reflects BRICS' strategic pivot toward Southeast Asia.

With Bangkok, Kuala Lumpur, and Jakarta accounting for three of the region’s top six economies, their partnership positions BRICS to gain greater influence in one of the world’s fastest-growing economic corridors.

Vietnam, another major Southeast Asian economy, had expressed interest in joining BRICS as a partner country in November. However, its failure to respond to an official invitation leaves its potential membership uncertain for now.

Russia seeks to expand its nuclear energy dominance with new international projects
/ Pexels - Johannes Plenio

By bne IntelliNews December 31, 2024

Russia is constructing over 10 nuclear power units on foreign soil to help capitalise on burgeoning energy demands driven by artificial intelligence and developing markets, a senior Kremlin envoy has revealed.

As bne IntelliNews reported uranium is the new gas and Russia remains one of the main sources of enriched nuclear fuel. At the same time Russia’s nuclear exports are booming as it seeks to tie more countries to itself using 60-year fuel supply and service contracts that come with Russian-built nuclear power plants (NPPs).

The country’s intensified nuclear efforts reflect a broader strategy to solidify its global influence, with projects underway in nations such as Bangladesh, China, Egypt, India, Iran, and Turkey. Despite heavy sanctions targeting its oil and gas industries following the invasion of Ukraine, Moscow has bolstered its role as a major provider of nuclear energy.

Boris Titov, President Vladimir Putin’s special representative for international co-operation in sustainability, highlighted Russia’s ambitions in an interview with the Financial Times. “We are building more than 10 different units around the world,” Titov said. “We need a lot of energy. We will not be able to provide this energy without using . . . nuclear. We know that it’s safe . . . it’s not emitting [greenhouse gas emissions], so it is very clean.”

Growing demand for nuclear energy

The International Atomic Energy Agency forecasts a 155% increase in global nuclear generating capacity by 2050, reaching 950 GW. Russia’s expanding portfolio includes reactor construction, fuel supply, and related services across 54 countries, according to research by the Norwegian Institute of International Affairs.

Titov underscored projects such as Hungary’s Paks 2 plant and developments in Turkey and Bangladesh. Russia is also advancing plans for small modular reactors in Uzbekistan and has signed agreements with Burkina Faso’s ruling junta. The Financial Times previously reported that Russia is involved in over a third of all new reactors under construction globally.

Western governments are seeking to counter Russia’s dominance in the nuclear sector. The US banned imports of Russian-enriched uranium in May, while most eastern European countries have switched to alternative suppliers for fuel compatible with Soviet-era reactors. However, Hungary has resisted such measures, with Prime Minister Viktor Orbán supporting Russian partnerships.

EU energy policy divides

Efforts to decouple Europe from Russian nuclear supplies have encountered resistance. EU energy commissioner Dan Jørgensen aims to scrutinise the entire nuclear supply chain as part of broader sanctions. Nonetheless, Hungary and Slovakia remain critical of such initiatives, with Slovak Prime Minister Robert Fico declaring after a meeting with Putin that sanctions threatening electricity production would be “unacceptable”.

Russia’s state nuclear agency, Rosatom, continues to prioritise reliability, an EU official acknowledged. However, sanctions on Gazprombank, a key conduit for Russian energy payments, pose immediate challenges. The measures exempt civil nuclear projects, except for Hungary’s Paks 2 plant—a move Hungary’s foreign minister, Péter Szijjártó, labelled an “entirely political decision”.

Expanding global opportunities

Russia is eyeing emerging markets for nuclear expansion as many developing countries look to nuclear energy for clean power. Malaysia, for example, is exploring its potential, according to Nik Nazmi Nik Ahmad, Malaysia’s minister of natural resources and environmental sustainability.

At the UN COP29 summit in Azerbaijan, US National Security Council senior energy director Jake Levine expressed concern over the growing role of Russia and China in global nuclear energy, calling the competition a “huge issue”.

With its aggressive push into international markets, Russia aims to reinforce its position as a leading nuclear power player, even as geopolitical tensions escalate.

The Budapest Memo holds keys to ending the Ukraine war

Decades of broken promises have raised hard questions about whether new security guarantees can be upheld

Analysis 
Zachary Paikin

Mark Episkopos
Jan 02, 2025

As the incoming Trump administration prepares to launch negotiations aimed at ending the current phase of hostilities between Russia and Ukraine, the question of security guarantees is certain to feature prominently in talks.

Talk of security guarantees is nothing new — indeed, it has underscored much of the drama that has unfolded since Russia’s initial military buildup in 2021. Moscow insisted that the United States and NATO undertake legally binding obligations in its two “draft treaties,” published on the eve of its full-scale invasion of Ukraine, aimed at guaranteeing Ukraine’s neutrality and rolling back NATO forces in Central and Eastern Europe to where they were prior to the 1997 NATO-Russia Founding Act. Kyiv, for its part, naturally wants ironclad measures that can ensure it will not fall victim to another war of aggression in the years ahead.

To some extent, however, this is all déjà vu. Thirty years ago last month, the Budapest Memorandum was signed.

Aimed at providing security assurances to Ukraine, Belarus and Kazakhstan in exchange for their entry into the Nuclear Non-Proliferation Treaty, the Budapest Memorandum committed Russia, the United States and the United Kingdom to abstain from military and economic coercion against these three newly independent post-Soviet states. Its lessons offer important clues for how to bring peace to what has tragically become a war-torn region.

The memorandum has become the source of considerable mythmaking following Russia’s brazen violation of Ukrainian sovereignty on February 24, 2022 (though some have asserted that the United States was the first to violate the memorandum with its sanctions against Belarus). Most notably, Atlanticists and pro-Ukrainian advocates often insist that Kyiv gave up its nuclear weapons — the ultimate deterrent and guarantee of one’s own security — in exchange for promises that its borders would be respected.

Of course, these missiles were Soviet — they were never functionally Ukrainian and were beyond Kyiv’s ability to maintain. Lost even more often in this discussion is the fact that the newly minted Ukrainian state prohibited itself from accepting, producing or acquiring nuclear weapons in its 1990 Declaration of State Sovereignty, the same declaration in which Kyiv announced its “intention of becoming a permanently neutral state.”

Famously, the memorandum offered Ukraine security assurances rather than legally binding security guarantees, a distinction explicitly stressed by American diplomats during the talks. Indeed, the memorandum was never approved by the U.S. Senate, as treaties must be, because it did not proffer any security guarantees to Ukraine. Nor did it commit the U.S. — or any other signatory — to any specific punitive action in the event of aggression against Ukraine, affirming instead a “commitment to seek immediate United Nations Security Council action to provide assistance” to Kyiv in case of an armed attack.

Given the history of the drafting process, Washington cannot be accused of pulling a fast one on Ukraine with ambiguous language or by using terms that may have been lost in translation. Simply put, the United States has never promised to fight for Ukraine — a position held in 1994 and reaffirmed by the Biden administration since Russia’s full-scale invasion. Any security guarantees offered to Ukraine aimed at bringing current hostilities to a close will be novel ones, not compensation for the West having supposedly failed to uphold its existing obligations.

In this context, Western states will need to weigh carefully just how far they are prepared to go, since Russia has demonstrated its willingness to fight for Ukraine while the West — initial suggestions of European peacekeepers aside — has not. French President Emmanuel Macron’s discussion earlier this year of sending European troops to Ukraine to prevent a Russian victory was promptly shut down by Western allies. One could argue that Ukraine’s status as a security “gray area” is what prompted Russia’s invasion, but permanent neutrality is just as plausible a resolution to this dilemma as NATO membership.

But perhaps the greatest lesson to derive from the history of the Budapest Memorandum is that context matters. The memorandum was agreed at a time when relations between Russia and the West were much more favorable (although by the end of 1994, Boris Yeltsin was already warning of the risk of a “cold peace”). The conclusion is that diplomacy — an evolving mixture of deterrence and reassurance — is consistently needed to tend to international relationships to ensure that agreements are upheld. The same will be true when it comes to “guaranteeing” that Russia will never invade Ukraine again.

By contrast, the Western approach to relations with Russia in the post-Cold War era has often been more legalistic than diplomatic — “throwing the book” at Moscow by pointing out the alleged ways in which it has failed to live up to its international commitments. Yet Kyiv was all too happy not to implement the Minsk agreements, which brought the initial rounds of fighting in the Donbas conflict to a halt, using the intervening years between 2015 and 2022 to strengthen its hand. Similarly, Moscow believed that the post-Cold War status quo was imposed upon it at a time of national weakness — something it sought to rectify by way of its “draft treaties.”

It is easy to say pacta sunt servanda, that agreements must be kept. But this requires building and maintaining trust. Doing so will require all sides to stop airing their tired narratives in public — such as when Moscow dismisses the perspectives of Central and Eastern European states as Russophobic or when Western countries pointlessly insist that NATO expansion is directed against no one — and recognize one another’s security concerns as legitimate.

Zachary Paikin
Dr. Zachary Paikin is Deputy Director of the Better Order Project and Research Fellow in the Grand Strategy Program at the Quincy Institute for Responsible Statecraft. He is also Senior Fellow at the Institute for Peace & Diplomacy (IPD). Previously, Dr. Paikin was Researcher in EU Foreign Policy at the Centre for European Policy Studies in Brussels and Senior Researcher in the International Security Dialogue Department at the Geneva Centre for Security Policy.

Mark Episkopos is a Eurasia Research Fellow at the Quincy Institute for Responsible Statecraft. He is also an Adjunct Professor of History at Marymount University. Episkopos holds a PhD in history from American University and a masters degree in international affairs from Boston University.

quincyinst.org

The views expressed by authors on Responsible Statecraft do not necessarily reflect those of the Quincy Institute or its associates.

 

In Russia’s war economy, civilians chase butter and potatoes

Mark O'NeillJanuary 01, 2025 
EUROPEAN JOURNAL

The white carpet of a snow-covered field in western Russia is pockmarked by corpses of Russian and North Korean soldiers killed during ‘meat assaults’ on foot. The family of each dead Russian is promised US$54,000 by the state.

At a supermarket in Moscow, the price of a pack of high-grade butter has risen 34 per cent in one year to 240 roubles (US$2.47). Over the same period, potatoes have risen 95 per cent, cabbage 38 per cent, beetroot 34 per cent and olive oil 31 per cent, according to Rosstat, the official statistics bureau.

Welcome to Russia’s “total-war economy”. Defence and security account for eight per cent of GDP and 40 per cent of total federal spending, the highest level since the Cold War. Short of new recruits, Russia has raised the average enlistment bonus to US$11,000, compared to an average annual salary of US$13,300.

The defence sector is booming, the rest of the economy is suffering. Interest rates are at a record 21 per cent, inflation this month is 9.5 per cent. Non-military companies are struggling to pay debts and raise money. Ralf Ringer, the country’s shoe manufacturer, was declared bankrupt this month. Since August, the rouble has fallen about 20 per cent to the U.S. dollar.

On December 18, the Russian Council of Shopping Centres said that 25 per cent of the country’s shopping centres risk closure in 2025, due to the sharply higher interest rates, higher taxes and the loss of foreign goods.

The defence sector has hired thousands of workers to work three shifts a day, with some salaries rising by 45 per cent in the first half of the year. As a result, unemployment has fallen to 2.3 per cent. There is a shortage of 1.5 million highly skilled workers, especially in construction, transport and utilities, deputy Prime Minister Alexander Novak said this month.

The war is not economically productive. According to the General Staff of the Ukrainian Army, since it launched its full-scale invasion in February 2022, Russia has lost 772,280 killed, wounded and missing, including 1,860 in the single day of last Saturday. Payments to families of the dead and care of the wounded and handicapped will cost the state billions of roubles over decades.

Russia says it has “liberated” about 20 per cent of Ukraine, in the east. To do this, it has reduced cities and towns to ruins and destroyed their factories and infrastructure. If it retains these territories in a post-war settlement, reconstruction of them will require colossal investment, with no help from the western world.

Butter is a good example of the price the civilian economy is paying. It is a staple food of the Russian diet. One quarter of its supply comes from abroad. Since the invasion, New Zealand, Australia and Latin America have banned butter exports to Russia. Belarus, India, Iran and Turkey stepped in to replace them.

Russian banks are cut off from the global Swift financial system. This forces importers and middlemen to find new, and more expensive, ways to finance the imports.

Butter has become a treasured commodity, sought by criminal gangs. In October, a CCTV video from a Moscow supermarket posted online showed a man stealing 25 packets of butter. When confronted by a shop assistant, he tries to escape, and a fight breaks out. Many shops have put their butter in locked cages; those wanting to buy it must ask staff to open them.

Meanwhile, images from the frontline becomes increasingly apocalyptic. They show Russians in their 50s and 60s practising, clumsily, to load machine guns as they prepare for the front. Another, in his 60s, is lured out of his trench by Ukrainians pretending to be Russian soldiers. They arrest him.

One who is captured explains to an interview: “there were 100 soldiers for breakfast and seven for dinner. To try to prevent us surrendering, our commanders use drones to follow us everywhere, with the threat to fire if we attempt it.”

Drones, used by both sides, provide astonishing battlefield coverage. A Ukrainian drone follows North Korean soldiers through a wheat field. Unprepared for this kind of warfare, they run terrified, trying to escape.

The Ukrainian army has dropped leaflets in Korean, urging them to surrender and go to South Korea the next day. “You have been sold”, one leaflet says. According to South Korean intelligence, Putin is paying US$2,000 per month to each North Korean soldier – but most of this goes to their government, not the individual.

In a single line, Russian tanks and armed personnel carriers cross a snow-covered field with no tree cover, making them sitting ducks for Ukrainian drones and artillery.

As the world prepares to celebrate the birth of the son of God, we look at the bloodshed in Ukraine and the poverty in Russia and wonder how we humans have come to this.

Mark O'Neill

A Hong Kong-based writer, teacher and speaker.

Slovakia faces cut-off of Russian gas pipeline supplies 

From January the Ukrainian pipeline will only accept supplies coming westwards. / bne IntelliNews

By Albin Sybera in Bratislava December 31, 2024

Russian gas flows via the Brotherhood pipeline across Ukraine will end at midnight on December 31, cutting the last operating direct pipeline link from Russia to the West. From next year the Ukrainian pipeline will only accept supplies coming westwards.

For Slovakia – the entry point of the pipeline into the EU – Ukraine’s move to end the gas transit is likely to raise gas prices and cut transit income but it will be manageable, analysts argue, yet it will worsen already bad relations between Bratislava and Kyiv.

To try to avert the gas cut-off, Slovakia’s populist Prime Minister Robert Fico – who, like Hungary’s Viktor Orban increasingly parrots Russian narratives of its bloody invasion of Ukraine – flew to Moscow to meet Russian dictator Vladimir Putin before Christmas. Fico also flew to Brussels in an unsuccessful attempt to try to persuade the European Commission of the country’s urgent need for pipeline gas supplies.

Fico  – only the third EU premier to visit Moscow since its invasion of Ukraine – offered to hold supposed “peace talks” between Ukrainian President Volodymyr Zelinskiy and Putin to end the fighting, an offer that Zelinskiy spurned. 

“The billions of euros from Russian gas are being used to kill civilians in Ukraine,” Zelenskiy said in response to Fico’s mission, adding that “when Slovakia says they can lose money or that it will be expensive to buy non-Russian gas, Ukraine has lost much more – we’re losing people”.

Zelenskiy also accused Fico of being instructed by Putin to "open a second energy front against Ukraine at the expense of the interests of the Slovak population".

Fico retaliated by even threatening to cut off Slovak power exports to electricity-hungry Ukraine if the gas cut-off goes ahead (it supplies 19% of the country’s power), prompting Poland to offer alternative supplies.

Ukraine sees the end of Russian gas transit as a way of putting further pressure on the struggling Russian economy and  refused to budge on ending pipeline transit with the contract extension set to expire at the end of December.

Russian provided some 35-40% of EU gas imports before its invasion of Ukraine, a proportion that has now halved, with some 15 bcm being exported to the EU in 2023. Think-tank Bruegel estimated that Russia would lose $6.5bn from the end of the flow, while Ukraine would lose $1bn in fees.

Russian supplies to the bloc continue via LNG purchases and the Turkish Stream pipeline via Bulgaria. The Brotherhood pipeline is estimated to have supplied around 5% of the EU's gas imports.

In 2024 some 18% of EU gas imports came from Russia, half the pre-war levels but slightly up from 15% in 2023, with Slovakia, Hungary, Austria and Bulgaria the countries that are still the most dependent on Russian gas. They are also among the countries that have made the least effort to find alternative supplies.

Slovakia can secure non-Russian supplies

But Slovak analysts argue that the country can adapt to the end of Russian pipeline supplies and that Fico’s stance has more to do with his close political ties with Orban and Putin, the cosy private business links that both countries continue to have with Russia, and his domestic political problems, rather than energy security.

Slovakia has already demonstrated the ability to get through the winter without Russian gas, Slovakia’s energy analysts point out. Slovak gas reserves are currently three quarters full.

Slovakia’s continued imports of Russian energy is “not a question of energy security”, Alexander Duleba, senior research fellow at the Slovak Foreign Policy Association (SFPA), told bne IntelliNews, explaining that Slovakia will have a sufficient amount of gas.  Duleba highlights that Slovakia survived the last winter practically without Russian imports.

“The consumption of Russian gas fell from 100% in the winter of 2021-22  to 8% in the winter of 2022-23”, he says, pointing out that the country imported 35% of gas from Norway via Czechia and Germany, while securing another 30% from LNG imports. 

Additionally, this was accomplished without the capacities provided by the Polish Świnoujście LNG terminal, which completed its expansion in 2023, opening another route for imports to Slovakia. 

Slovakia and its energy companies – including the state gas group SPP and gas transporter Eustream, where EPH of Czech energy and media oligarch Daniel Křetínský has a 49% stake and managerial control – “managed to secure a sufficient amount of gas” without Russia, Duleba says, adding that now Slovakia has a contract with Norway is extended, “so at least 35% can be imported from Norway”.  

Radovan Potočár, editor-in-chief of the Slovak energy-focused outlet Energie Portal,  says that Fico’s stance is mainly for political reasons. He told bne Intellinews in Bratislava last month that ultimately the government has the tools to intervene in energy price policy.

“Fico does not have to point a finger at Ukraine, he wants to do that,” Potočár observes.  

In mid-December, Fico’s cabinet confirmed it will continue subsidising energy prices, and Saková’s ministry estimated the additional costs of subsidising energy prices will amount to €291.5mn.    

Local businesses eye the return of transit profits

SPP – which secures some 3 bcm  for the Slovak market, or about 65% of market gas consumption – is still backing Fico’s left-right government in pushing for the prolongation of gas transit, because Russian gas is cheaper. 

“If SPP […] were to lose the gas imports from the east and the whole needed volume was purchased from another source and physically imported to Slovakia, it would cost us an additional €150mn,” Vojtech Ferencz, CEO of SPP, told the country’s media ahead of Fico’s talks in Brussels and Moscow. Ferencz joined Minister of Economy Denisa Saková in negotiations with Gazprom boss Alexei Miller.   

Ferencz argued that the additional costs will be reflected in gas prices on the market, and “if a cold winter comes, the situation can cause a lack of gas and difficulties with its supplies in all of Europe”.  

According to Zelenskiy, Fico claimed during the talks in Brussels that the costs Slovakia will incur with the ending of gas transit through Ukraine are €500mn, in which he probably included loss of the income from gas transit fees through Slovakia, Euractiv.sk noted – a significant source of income for Eustream. 

Duleba says that “the contract with SPP is advantageous mainly because Russians pay for the gas transit to the Ukrainian Slovak border in Uzhhorod themselves,” adding that “this is an absolutely ideal contract,” and that it is unlikely to see a contract where “a gas supplier would pay for its transit” ever again. 

“SPP is fighting for the continued gas transit because it is clear it will never again reach a contract like this” when a supplier brings the commodity at his cost all the way to the border. 

“That is why this gas is the cheapest one because Russians themselves pay for the transit,” Duleba reiterated, adding that at the same time, Eustream “is fighting for the return of the great scheme of gas transit through Ukraine to Slovakia”.

In the years before the full-scale Russian invasion of Ukraine some 50-55 bcm of gas was transported through Slovakia annually on average, which yielded €400mn in profit after tax for each of Eustream’s shareholders – the Slovak state and EPH – Duleba estimated.     

“The problem is that following the war, Germans, Italians and French, which were the three largest clients before the war, stopped purchasing it,” changing the energy landscape in Europe dramatically and rendering the return of the pre-war order a “chimera”. 

Smer party relies on anti-establishment electorate

Duleba argues that for Fico there is an important political dimension to his effort to maintain Russian supplies. Fico’s supposedly leftist Smer party won the September 2023 elections on an anti-Ukrainian ticket, campaigning with the slogan “not a single bullet more” for Ukraine.

Although Fico and Smer once again demonstrated their close ties with private businesses by leaving room for commercial military supplies to Ukraine, Fico still needs to use radical rightwing and anti-Ukraine rhetoric to appeal to his anti-establishment electorate, which is  also targeted by the neo-fascist Republika and far-right SNS.   Like his mentor Orban – with whom he is more and more closely aligned – he has regularly criticised EU sanctions on Russia and aid to Ukraine, and has said he would veto any move to grant the country Nato membership, though he has yet to vote against the EU line on Ukraine in Brussels. 

“Fico has very skilfully developed this brand of politics which combines neo-Stalinism with the tradition of Andrej Hlinka [founder of the Slovak People’s Party, which ruled the World War II puppet state in Slovakia],” says Boris Zala, a former Smer MP and MEP who left the party in 2016 over its corruption scandals and shift rightwards. 

“Smer has not been a left-wing party for some time,”  Zala continued, adding that today, “Smer is a nationalist-conservative party mixing the nostalgia after [the pre-1989 communist] old regime with Slovak People’s Party rhetoric, thanks to which it can attract neo-Stalinists and Hlinka supporters alike”.   

Duleba added that today, Fico’s domestic preferences rely on a political polarisation, which mobilises the anti-establishment segment of the country’s electorate and which leans towards anti-Western rhetoric and nationalist sentiment. “The myth of Russia’s strategic importance” has remained powerful in modern Slovak nationalism since the 19th century when the country was part of the Austro-Hungarian empire and nationalists looked to the big brother Slav empire for support.   

“This mythology works for a significant part of the Slovak society,” Duleba agrees, adding that the rhetoric of gas as a strategic commodity from Russia fits into that. 

Fico has said he intends to “standardise relations between the Slovak Republic and Russian Federation” for which “activities related to the 80th anniversary of the end of World War II and victory over fascism” next May will help.   Fico has already said that he intends to go to Moscow for the anniversary.

Fico's hardening stance reflects the fact that the government is starting to come under serious political pressure amid serious cabinet divisions, falling poll figures and budget cuts. Duleba points to the protests against the government policies in the police, judiciary, media and culture, which are only likely to increase as a result of approving a package of measures to consolidate public finances, which has already triggered a crisis in the health system.   

Although the government approved an agreement with Health Labour Unions (LOZ) on December 20 that  averted a threatened  mass exodus of doctors in January, the internal frictions in the coalition reduced it to the slimmest possible majority of 76 in the parliament of 150 legislators. Additionally, four of the Hlas legislators have been critical of the far-right radical elements in the cabinet, including Minister of Culture Martina Šimkovičová. 

“The more unpopular measures to consolidate public finances, Fico will have to make, the more pro-Russian positions he will take up,” Duleba says.  

 TAKE THAT EV SKEPTICS

BYD sales soar signalling a shift in global EV market dynamics

A BYD car / Pexels - Michael Förtsch

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By bno - Taipei Office January 2, 2025

Chinese electric vehicle (EV) maker BYD Co Ltd is tightening its grip on the global EV market. In the process it is closing in on Tesla Inc as sales surged in 2024.

In December alone, BYD reported EV sales of 207,734 units, bringing its annual total to 1.76mn according to the BBC. Much of this success can be attributed to aggressive pricing and Chinese government subsidies.

The Shenzhen-based automaker's total vehicle sales rose over 41% year-on-year (y/y), driven primarily by strong demand for its plug-in hybrid models.

With such figures, BYD's growing momentum suggests the global EV race is intensifying although Elon Musk’s Tesla did maintain a narrow lead in global EV sales during the third quarter of 2024. BYD has, however, been steadily closing the gap as many in the motoring industry await Tesla quarterly sales data later in the week.

China’s domestic market drives sales

BYD's dominance in China, which accounts for 90% of its sales, has been a cornerstone of its growth. Price wars and government incentives for EV purchases have spurred Chinese consumers to transition from traditional combustion vehicles to greener alternatives. As a result BYD has widened its lead over international brands which have struggled to compete in the Chinese market.

In part because of this, BYD's revenues for the third quarter of 2024 exceeded Tesla’s for the first time, reaching CNY200bn ($28.2bn), a 24% increase y/y. Tesla's revenues for the same period stood at $25.2bn according to a BBC report even as Tesla retained its position as the largest EV seller globally in terms of units sold.

Challenges in international markets

While BYD has seen success domestically, expanding overseas has proven more challenging though. Tariffs imposed by the European Union—up to 45.3% on Chinese-made EVs—and a 100% duty by the United States have hindered growth in these regions. Elsewhere in Asia too, Japanese and Korean cars dominate and across the Taiwan Strait in Taiwan there is a general distrust of ‘made-in-China’ labels.

Meanwhile, President-elect Donald Trump's incoming administration is expected to implement additional tariffs on Chinese imports potentially blocking BYD access to one of the world's most lucrative motoring markets altogether.