The Impact of Differentiation Competitive Strategy on Market Share of New Energy Vehicle Enterprises: A Comparative Analysis of BYD and Tesla

Wenxing Wang

doi:10.54691/pjyq6328

Authors

Wenxing Wang Stevens Institute of Technology, School of business, Shenzhen, China

DOI:

https://doi.org/10.54691/pjyq6328

Keywords:

Differentiation strategy, market share heterogeneity, new energy vehicles, resource-based view, subsidy phase-out.

Abstract

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.

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