The Impact of Differentiation Competitive Strategy on Market Share of New Energy Vehicle Enterprises: A Comparative Analysis of BYD and Tesla
This paper examines the heterogeneity of market share impacts of product breadth, brand salience, and channel depth between BYD and Tesla, and whether China's subsidy phase-out moderates these effects. Based on quarterly panel data covering 2018Q1-2023Q4, separate OLS regressions are applied to each firm. Product breadth significantly influences BYD's market share (β = 0.527, p < 0.001) but not Tesla's; brand salience presents similar heterogeneity; channel depth positively affects BYD (β = 0.196, p < 0.001). The Tesla percentage reached its maximum value of 18.00% in Q1 2020 before falling to 9.81% in Q4 2023; none of the differentiation variables offer meaningful explanatory power. Sensitivity to moderation model specification is illustrated by the fact that the interaction between SKU×Subsidy is–15.00 (marginally significant, p = 0.065) in the absence of control for a time trend, but becomes nonsignificant (p = 0.290) when time trend is controlled for. Using an Effective Subsidy variable for the firm (subsidy in China weighted by firm's share in China) changes the sign (p = 0.747). Differentiation strategy effectiveness varies between firms depending on resource endowments.
References
- Tian, J., Wang, P., & Zhu, D. (2024). Overview of Chinese new energy vehicle industry and policy development. Green Energy and Resources, 2(2), 100075.
- Yan, J. (2022). BYD and Tesla's competitive advantages and future development prospects. BCP Business & Management, 18, 442–450.
- Liu, C., Boothman, S. G., & Graham, J. D. (2025). The rise and recent decline of Tesla's share of the US electric vehicle market. World Electric Vehicle Journal, 16(2), 90.
- He, W., & Hao, X. (2023). Competition and welfare effects of introducing new products into the new energy vehicle market: Empirical evidence from Tesla's entry into the Chinese market. Transportation Research Part A: Policy and Practice, 174, 103730.
- Ali, B. J., & Anwar, G. (2021). Porter's generic competitive strategies and its influence on the competitive advantage. International Journal of Advanced Engineering, Management and Science, 7(6), 42–51.
- Pereira, V., & Bamel, U. (2021). Extending the resource and knowledge based view: A critical analysis into its theoretical evolution and future research directions. Journal of Business Research, 132, 557–570.
- Cho, M. J., Bae, K., Byun, J., & Shin, J. (2025). Expanding the identification of key resource combinations for mid- to long-term growth in electric vehicle market entry. PLOS ONE, 20(8), e0328563.
- Zheng, C., Sun, D., Khamarudin, M., Ahmad, A., Wei, H., & Xu, J. (2025). Integrating customer-based brand equity and the theory of planned behavior to predict electric vehicle adoption in China: The moderating role of perceived price. PLOS ONE, 20(7), e0329224.
- Hu, Z. (2022). Research on the consumer behavior characteristics and marketing strategy of new energy vehicles: Taking BYD and Tesla as examples. BCP Business & Management, 31, 168–175.
- Rubio-Andrés, M., Linuesa-Langreo, J., Gutiérrez-Broncano, S., & Sastre-Castillo, M. Á. (2024). How to improve market performance through competitive strategy and innovation in entrepreneurial SMEs. International Entrepreneurship and Management Journal, 20(3), 1677–1706.
- Peng, R., Tang, J. H. C. G., Yang, X., Meng, M., Zhang, J., & Zhuge, C. (2024). Investigating the factors influencing the electric vehicle market share: A comparative study of the European Union and United States. Applied Energy, 355, 122327.
- Yang, Z., Li, Q., Yan, Y., Shang, W. L., & Ochieng, W. (2022). Examining influence factors of Chinese electric vehicle market demand based on online reviews under moderating effect of subsidy policy. Applied Energy, 326, 120019.
- Wang, N., Li, X., & Yang, X. (2025). The efficacy of the new energy vehicle mandate policy on passenger vehicle market in China. World Electric Vehicle Journal, 16(3), 151.
- Xie, Y., Wu, J., Zhou, X., & Sheng, Y. (2024). The impact of consumer preferences on the evolution of competition in China's automobile market under the Dual Credit Policy: A density game based perspective. PLOS ONE, 19(3), e0295947.
- Guo, J., Xu, B., Cao, Q., Liu, S., Gu, F., & Zhang, X. (2024). Unveiling the bidirectional link between electric vehicle sales and charging infrastructure: Evidence from 95 cities in China. iScience, 27(12), 111245.