Tesla and BYD are the world's largest electric-vehicle makers.
In 2022, China EV and battery giant BYD's vehicle sales raced ahead of Tesla's. For all-battery electric vehicles (BEVs), BYD seized the crown in Q4 2023. Tesla regained that title in Q1 2024, but could soon lose that again.
Both EV giants reported big first-quarter delivery declines vs. the fourth quarter, partly due to seasonal weakness in China as well as stalling EV demand globally, though BYD sales rose vs. a year earlier.
BYD sales rebounded in March and April, fueled by big price cuts and a bevy of new or upgraded models. It's set to unveil a more-advanced hybrid system in May along with improved batteries later this year.
Tesla has slashed prices since late 2022, but demand is flagging as its lineup ages. The EV giant announced major layoffs starting in mid-April, with further cuts to key programs and jobs since then. Several top executives have left.
Tesla recently announced plans for "affordable" EVs, but those may be cheaper variants of the Model 3 or Y. The EV giant apparently has shelved plans for any all-new vehicles for years to come.
Elon Musk is placing a renewed emphasis on robotaxis, as well as robotics and artificial intelligence. It's unclear when such goals will be achieved, especially in the next few years.
Tesla stock surged despite grim first-quarter earnings as Musk touted robotaxis and cheaper EVs in the future, followed by Tesla clearing key hurdles for launching Full Self-Driving in China. Shares have since pulled back but have found key support. It's one of the worst performers on the S&P 500 in 2024.
BYD stock sold off to start the year but has rebounded and is setting up near a buy point. Q1 earnings rose slightly vs. a year earlier, while gross margins hit record highs.
Let's take a look at BYD vs. Tesla, as well as BYDDF stock vs. TSLA stock.
Tesla Vs. BYD Sales
Elon Musk said on the Q1 earnings call that he expects Tesla deliveries will rise in 2024. That may be optimistic given the trend so far.
Tesla delivered 386,810 vehicles in Q1, far below even the most bearish views. That was down sharply from Q4 2023's record 484,507 EVs and off 8.5% vs. a year earlier.
The majority of Tesla sales are for the crossover Model Y.
U.S. Model 3 production was low as the Fremont plant struggled with the upgraded version. The company produced 433,371 vehicles worldwide, even with Berlin and Fremont woes and with Tesla slashing Shanghai output.
Production is set to fall much further in Q2. Tesla deliveries appear to be sluggish so far in Q2 in all its major markets.
BYD announced first-quarter sales of 626,236 EVs, including 300,114 passenger BEVs. That was down sharply from Q4's 944,779 but up 13.4% vs. a year earlier. After a dismal start to 2024, BYD sold 302,459 in March alone, including 139,902 BEVs.
April sales picked up to 313,245, though BEV-only sales dipped to 134,485. Exports surged above 41,000.
BYD looks set to reclaim the BEV crown from Tesla in Q2, while overall sales could set a new quarterly record.
In late April, China announced a new subsidy for trading in older, gas-burning cars for lower-emission vehicles, with larger incentives for EVs. That helps all EV makers. But BYD may be a major beneficiary because the RMB 10,000 subsidy ($1,409) is a big share of its low-price models.
Tesla, BYD Cutting Prices
Tesla has slashed prices worldwide starting in late 2022. Initially, these price cuts were viewed at least somewhat as proactive moves to grab market share and undercut rivals. But the EV giant has had to keep cutting prices to prop sales, slashing once-mighty profit margins and earnings. In Q1 2024 deliveries and revenue fell vs. a year earlier, with that likely to continue in Q2.
While Tesla has at times nudged prices higher, the general trend has been lower. Wiping out inventory Model Y discounts in April meant effective U.S. prices are higher. But Tesla has introduced 0.99% financing for the Model Y in the U.S., a quiet but sizeable incentive.
In recent months, BYD has slashed prices on most of its largely refreshed models, helping to revive sales. But that hasn't been at the expense of margins.
Tesla Models
Tesla produces the Model 3, the Model Y, Model X and Model S, as well as the Semi and Cybertruck. The Model Y crossover accounts for the majority of sales.
A Model 3 revamp didn't provide much of a sales boost in China and Europe, with demand falling significantly in 2024. U.S. production of the "Highland" Model 3 has been low as Tesla's Fremont plant struggles with the changeover.
The first two variants of the Model 3 do not get the $7,500 IRA tax credits because their batteries don't comply with sourcing guidelines. The just-revamped Model 3 Performance does get the credit.
The Cybertruck has been produced in relatively low volume, in part due to quality issues. It already has had a recall for an accelerator pedal issue. The Cybertruck, which probably is not profitable yet, is likely to be largely a North American vehicle.
Tesla has delivered a few dozen Semi vehicles to PepsiCo. By May 2024, a few more customers, including Walmart, had taken possession of at least one Tesla Semi. But it's still unclear what the specs and price for the EV big rig are, or when it will begin mass production.
Tesla 'Affordable Vehicles' And Robotaxi
Tesla had long-touted plans for a "next-generation" EV with a design and "revolutionary" manufacturing that would slash costs. But on the Q1 earnings call, the EV giant now says plans "affordable vehicles" soon with only "aspects" of next-generation features, using existing production lines. Elon Musk said test production might happen in early 2025 or even before the end of 2024.
Given the timeline — which could slip — the speculation is that Tesla will produce a lower-cost variant of the Model 3 or Model Y, perhaps a hatchback. IRA-compliant batteries would be key for such a vehicle in the U.S. It's unclear how a low-end Model 3 would fare in China, where Model 3 sales are quickly waning.
In late April, Musk apparently fired the entire new vehicles team. That suggests that Tesla will have no truly new vehicles for many years to come.
Meanwhile, Elon Musk has made a stronger push for robotaxis. He plans a robotaxi event on Aug. 8, though it's unclear what that will entail. Tesla suggested a robotaxi app would be coming. But Tesla's Full Self-Driving, despite its name, remains a Level 2 system that requires a human driver.
BYD Expansion
BYD sells BEVs and PHEVs from around $10,000 to $150,000, with a wide range of models. It's refreshing much of its lineup, while adding several new models. That includes new models for its premium Denza, FangChengBao and Yangwang brands.
It's unveiling several new models with driver-assist systems, faster charging and improved hybrid systems.
On May 10, BYD launched the Sea Lion, a Model Y rival. On May 14, it formally unveiled the PHEV pickup Shark.
BYD also is expanding rapidly overseas. Exports are a small share of overall sales, but growing rapidly as logistics improve. They also carry better margins.
BYD will open a Thailand factory in the third quarter, with a Brazil plant set to open in early 2025. The EV giant also has plans to build a factory in Hungary and Indonesia and is mulling a Mexico site. A joint venture knock-down assembly plant in Uzbekistan should begin production in Q3.
BYD has no plans to enter the U.S. passenger EV market, amid import tariffs and political opposition. BYD does make EV buses in California.
Tesla Vs. BYD Batteries
Tesla traditionally has not mass produced its own batteries. For lithium-ion batteries, its joint venture partner Panasonic makes the cells and Tesla packages them. It also buys lithium-ion batteries from South Korea's LG. Tesla also buys a lot of lithium iron phosphate (LFP) batteries from China's CATL as well as some LFP batteries from BYD.
Tesla is working on 4680 batteries, first touted at the 2020 Battery Day. The 4680 batteries are standard lithium-ion chemistry, but the larger form factor offers the potential for various benefits and cost savings. Tesla's 4680 production has picked up output in recent months, but is still relatively low.
Tesla still hasn't solved key technical hurdles to allow for 4680 mass production and cost savings. It's also not clear if some of the battery benefits are coming to fruition.
If nothing else, the focus on the 4680 batteries meant that Tesla did not focus on expanding production or sourcing of traditional 2170 cells that would comply with IRA tax credit rules.
Tesla is a major battery storage provider, though it gets its batteries from CATL.
BYD, meanwhile, is one of the world's largest EV battery makers. Its Blade batteries are a specialized form of lithium ferrous phosphate (LFP) or lithium iron phosphate batteries. BYD is ramping up battery plants to supply third-party EV makers as well as storage, above and beyond its own EV needs. Those include battery sales to EV makers Xiaomi, Nio's Orvo brand, Toyota and even Tesla.
BYD, like CATL and some others, is working on sodium-ion batteries. Those could be useful in smaller EV vehicles as well as for energy storage.
BYD reportedly will unveil a next-generation Blade battery in the third quarter. It's expected to unveil a fifth-generation hybrid system, offering significantly longer range, at some point after May.
BYD is a major battery storage provider.
Tesla's Other Businesses
Tesla has its own Supercharger network in its markets. That's especially important in the U.S. and countries like Australia, where third-party charging facilities are limited.
Tesla in recent months struck deals with most automakers for access to Superchargers in the U.S. They'll also adopt the charger standard Tesla uses. Those deals, and some related charging subsidies, will boost revenue. But they will reduce Tesla's charging moat in the U.S., which encouraged people to buy its EVs.
But at the end of April, Musk fired the entire Supercharger team. That will significantly slow new Supercharger installations and other efforts.
Tesla also has a solar installation business, but it's been struggling.
Tesla's self-driving ambitions continue. Musk is doubling down on the FSD as the traditional EV business struggles. However, Tesla recently slashed the FSD prices to $8,000 from $12,000, shortly after halving the FSD subscription price to $99 a month from $199.
In late April, the National Highway Transportation Safety Administration opened a new probe of Tesla self-driving systems amid concerns that a 2023 "recall" to improve driver monitoring was falling short. The NHTSA also appeared to pin part of the blame for Autopilot and FSD accidents on Tesla, not just the driver. It's since requested further information from the EV giant.
Tesla has cleared key hurdles for offering FSD in China. But many automakers offer Level 2 systems there.
Tesla also is pursuing a humanoid robot, Optimus. On the Q1 earnings call, Musk said he expected Optimus to be doing "useful" work at Tesla factories by year-end.
"We should be thought of as an AI or robotics company," Musk told investors. "If somebody doesn't believe Tesla is going to solve autonomy, I think they should not be an investor."
BYD's Other Businesses
BYD, notably, makes its own chips. That, along with the in-house batteries and other vertical integrations, help make BYD a low-cost EV maker.
The EV and battery giant also has solar operations.
BYD is introducing Level 2 driver-assistance systems in its premium brand models as well as more mainstream BYD brand offerings..
BYD Co. is largely known for its BYD Auto operations. BYD Electronics, which accounts for an increasingly smaller share of overall revenue, is involved in mostly low-margin businesses such as smartphone components and assembly.
In December 2023, BYD Electronics closed its $2.2 billion deal for the mobility business of Jabil, increasing its exposure to Apple.
Tesla Earnings
Tesla earnings plunged 47% to 45 cents a share in the first quarter, the third straight big EPS decline. Revenue fell 9% to $21.3 billion, the first decline since early in the pandemic. Both missed lowered views.
Tesla burned $2.5 billion in cash during the quarter, even with the company delaying payments.
The EV giant is stepping up spending on Nvidia chips vs. new vehicles.
Gross margins fell to 17.4% vs. 17.6% in Q4 and 19.3% a year earlier.
Analysts, who have been slashing Tesla estimates since the end of 2022, now see 2024 EPS sliding 22% to $2.43 a share after skidding 23% to $3.12 in 2023.
BYD Earnings
BYD earnings had been booming, but have slowed amid heavier discounts.
Q1 net income grew 10% vs. a year earlier in local currency, while revenue grew 4%. Both were slightly below views.
Despite big price cuts and discounts, BYD offset that due to lower battery costs and other savings. R&D costs swelled 70% vs. a year earlier.
Gross margins rose to a record 21.9% from 21.2% in Q4 and 17.9% a year earlier. BYD Auto margins hit 28.1%.
With sales ramping up, gross margins are likely to rise in the coming quarters.
Tesla Stock Technicals
Tesla stock is down 30% so far in 2024 as of May 15, according to MarketSmith analysis. Shares surged from a 15-month low following earnings on investor optimism about "affordable" EVs, FSD and more.
Even though Tesla stock is down sharply in 2024, it's more expensive relative to earnings.
Musk's recent robotaxi comments and China FSD moves have satisfied or even thrilled many fans. But they've heightened concerns on Wall Street that Tesla's aging vehicles will become increasingly uncompetitive.
Tesla stock gapped above the 50-day line on April 29 with a 15% spike, but shares essentially wiped out that gain, dipping below that key level. Shares are just above that level.
BYD Stock Technicals
BYD stock is up 1.9% in 2024 through May 15, a rare EV stock that's up this year. Shares have rebounded from a 52-week low at the end of January. BYD blasted above the 200-day moving average in early May, clearing a short consolidation and offering an entry. It's been pausing for the past few days just above its 200-day.
Investors could view the recent action as a high handle to the short consolidation or a traditional handle to a base going back to last October or November. Either way, the buy point would be 29.52. Investors might see an early entry from breaking the downtrend of that handle.
Tesla Vs. BYD Market Cap
Tesla stock has a market cap of $554.9 billion as of May 15, well off its peak of about $1.2 trillion. That's still far above BYD's $76.9 billion.
Tesla Stock Vs. BYD Stock
BYD sells far more EVs than Tesla, and will likely reclaim the BEV crown in Q2. More broadly, BYD in many ways is the EV maker Tesla has claimed or aspired to be. BYD makes its own batteries and chips, and sells those batteries to third parties such as Tesla. Musk has talked about making a $25,000 Tesla; BYD makes EVs profitably at far below $25,000.
The Tesla Cybertruck is a new vehicle, but shipments are still low and problems high. Musk has said the vehicle will be a financial drain in 2024. It's unclear if yet-unseen upcoming "affordable" variants of aging vehicles will have a meaningful impact. Tesla's position in China looks especially precarious.
BYD has entered most of the world outside of the U.S. Its model lineup continues to expand dramatically, with big moves upscale and adding tech to its more-affordable offerings.
Tesla stock has been a big loser in 2024, though it's trying to find support. BYD stock is setting up near a buy point, edging higher in 2024.
So keep your eyes on BYD and Tesla, as well as Tesla stock vs. BYD stock.
Please follow Ed Carson on X/Twitter at @IBD_ECarson, Threads at @edcarson1971 and Bluesky at @edcarson.bsky.social for stock market updates and more.
