Tesla (TSLA) and BYD Co. (BYDDF) are both fast-growing EV giants. While a lot of attention falls on startups such as Rivian Automotive (RIVN), Lucid (LCID), Nio (NIO), Xpeng (XPEV) and Li Auto (LI), as well as traditional automakers pushing into EVs, such as General Motors (GM) and Ford Motor (F), Tesla and BYD are setting the pace.
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Tesla reported record deliveries in the third quarter on Oct. 2, but they came in well below views, as China demand concerns grow. Tesla earnings for Q3 are due Wednesday night, but investors will be focusing on future growth.
While concerns about overall China EV demand are growing, BYD reported booming September sales, topping 200,000 for the first time. The EV and battery giant has added several new EVs, including a Tesla Model 3 rival. In the past week, BYD has entered India, Thailand and Laos, with deliveries beginning in several European countries this month. The number and pace of BYD’s expansion may be unprecedented in the auto industry.
BYD reported mammoth preliminary third-quarter earnings. Official results will likely come in a couple weeks.
Tesla stock has plunged over the last four weeks to a 15-month low. BYD stock is at seven-month lows.
Let’s take a look at Tesla vs. BYD — and Tesla stock vs. BYD stock.
Tesla Vs. BYD Sales
Tesla reported Q3 deliveries of 343,830, up 42% vs. a year earlier and above Q1’s record 310,048. But that was well below analysts’ estimates of above 360,000. Tesla produced 365,923 vehicles in the latest quarter, more than 22,000 above deliveries.
Tesla cited logistical challenges and vehicles in transit. But that appeared to reflect a last-minute shift to exporting Shanghai-made vehicles early as China demand slowed.
Tesla delivered 325,158 Model 3 and Model Y vehicles in Q3, along with 18,672 Model S and Model X luxury EVs.
Meanwhile, BYD sold a record 201,259 new energy vehicles in September, after 174,915 in August and 162,530 in July. That was up 183% vs. a year earlier. Of the 200,793 personal vehicles, BYD sold 94,941 pure electric vehicles, or BEVs, and 106,032 plug-in hybrids.
For Q3, BYD sold 538,704 NEVs, up 194% vs. a year earlier and surging from 355,021 in Q2.
The Chinese giant nearly doubled its overall vehicle lead over Tesla in Q3 vs. Q2. The U.S. EV maker still leads in BEV deliveries, but BYD sold 258,610 pure electrics in Q3, rapidly closing that gap.
On. Oct. 4, BYD announced a deal to sell more than 100,000 EVs to German car rental giant SIXT over six years. That follows Tesla and GM EV deals with Hertz (HTZ). SIXT says it will order several thousand BYD EVs to start, with the Atto 3 available for customers in the fourth quarter.
Tesla Vs. BYD Expansion
Tesla opened its plants near Berlin, Germany, and Austin, Texas in March and April, respectively. Model Y production remains sluggish for those sites, but is slowing improving.
Just-finished upgrades to the Tesla Shanghai facility significantly boosted production capacity, though that impacted output in July and early August.
But Tesla China demand is struggling to keep up with increased output. Tesla China wait times fell to virtually nil in September. Tesla introduced an insurance subsidy in mid-September, and recently extended that through year-end. From Oct. 1, Tesla has offered 0% down payments and preferential loan rates. Those incentives serve as de facto price cuts. There speculation that Tesla will announce outright China price cuts, but hasn’t yet.
Tesla Shanghai delivered 83,135 vehicles in September, according to the China Passenger Car Association. Of that, Tesla sold 77,613 locally, exporting just 5,522. That might be a better local sales mix than some expected after the Q3 global deliveries miss.
Tesla production should be much higher in Q4 vs. Q3, especially at Shanghai, so global demand will also need to ramp up.
Tesla will export even more Shanghai production to ease local demand concerns. However, European backlogs also have started coming down. In August, Tesla began selling a new low-end Model Y in Europe that’s much cheaper to the prior base Y.
BYD also is adding significant EV and battery capacity.
The auto giant said earlier this year it plans to sell at least 1.5 million NEVs in 2022, possibly 2 million. Deliveries seem likely to easily top 1.8 million, with 1.9 million or more quite likely.
BYD is targeting 280,000 vehicle deliveries a month by year-end, Chairman Wang Chuanfu said on Sept. 2. He set a 2023 delivery goal of four million. He also said BYD had a backlog of 700,000 vehicles.
Tesla, targeting the luxury and affordable luxury markets, has far higher selling prices than BYD.
The majority of BYD’s EVs and hybrids sell for $15,000-$34,000, though a growing number top $40,000. Overall selling prices are on the rise.
The China EV giant does plan to move upscale significantly.
BYD says a high-end brand, targeting the 800,000 yuan ($115,960) to 2 million yuan market, will launch in June 2023, with plans for an off-road vehicle, a luxury sedan, a high-end SUV and a super car.
BYD’s Denza unit, 10% owned by Mercedes-Benz, will begin D9 minivan deliveries in the coming days. The company predicts 3,000 deliveries in October and 10,000 by December. Coming in EV and PHEV variants, it starts at just under $50,000.
A Denza SUV should launch in early 2023.
BYD Vs. Tesla: Tesla Electric Vehicles
Tesla produces four electric vehicles: the luxury Model S sedan and Model X SUV as well as the Model 3 sedan and Model Y crossover. The vast majority are the Model 3 and Model Y, with the Model S and X largely limited to North America now.
The Roadster, Semi and Cybertruck have been pushed back multiple times. Musk says the Cybertruck is on track for mid-2023. But prices and specs — ambitious even compared to other Tesla vehicles — will likely be different than the initial Cybertruck claims back in 2019, he says.
Musk tweeted on Oct. 6 that the Tesla Semi, first unveiled in 2017, has begun production and will start deliveries to PepsiCo (PEP) on Dec. 1. He said the Semi will have a 500-mile range. But many key specs, such as effective range with cargo, the price tag, what type of batteries are used and more, are still unclear.
It’s also unclear if the Semi will be produced in volume or in token amounts.
Meanwhile, the Cybertruck likely will largely serve the U.S. market. So Tesla may not have a new passenger EV for most of the world until 2024 or later.
An aging model lineup could be a factor going forward, especially in China.
Musk recently said Tesla is not working on a $25,000 vehicle, a goal he had touted for years. Even now, such a model would run into dozens of existing rivals, mostly from Chinese EV makers such as BYD.
BYD Vs. Tesla: BYD EVs Big And Small
BYD has a slew of models, some with electric and hybrid versions. The automaker is rolling out several new EV-only and hybrid-only models in the next several months.
The Seal sedan is BYD’s first clear head-to-head competition vs. Tesla. The BYD Seal has roughly equal dimensions and range to a Model 3 — and $10,000 cheaper. The Seal starts at 212,800 RMB ($31,130) vs. 279,900 RMB ($41,950) for a made-in-China Model 3.
BYD started Seal deliveries in late August, with deliveries reaching 7,473 in September. Production is set to keep ramping up and will reach many overseas markets in 2023.
On the low end, a BYD Seagull hatchback will soon launch with a price tag around $12,000.
In a few months, BYD will unveil the Seal Lion, an all-electric SUV that could take on the Tesla Model Y with a much-cheaper price.
BYD recently unveiled the Frigate 07, a mid-sized SUV that’s the second model in the Warship line of plug-in hybrids. The Destroyer PHEV sedan launched this spring and continues to increase sales.
BYD also is one of the biggest makers of electric buses, with plants in the U.S. and many other countries besides China. BYD also makes EV delivery trucks, big rigs, garbage trucks and more.
BYD makes buses, big rigs and other heavy vehicles for the U.S. market at its Lancaster, Calif., plant.
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Tesla Stock Vs. BYD Stock: EV Markets
Tesla is a global EV giant, with major sales in North America, Europe and China. It has notable business in Korea and some other Asian markets. It has four plants, starting with Fremont, Calif., and Shanghai, joined by the Austin, Texas, and Berlin-area plants. Tesla already exports to Europe, mostly from Shanghai.
As the Berlin plant ramps up, the Shanghai plant will export fewer Model Ys to Europe, though Model 3 shipments will likely continue.
While Tesla capacity is soaring, it has no major new markets to enter or new passenger EVs in the near future.
The U.S. just approved new EV tax credits. Tesla, no longer eligible under the old program, should be a winner. Income and vehicle price caps could limit Tesla vehicles’ and buyers’ eligibility, however. A requirement for a high and rising share of battery materials and components from North America also could complicate matters.
But, if nothing else, the new rules — which mandate assembly in North America — cut off tax credits to many Tesla rivals.
BYD’s auto plants are in China, with virtually all its sales there, but those are both about to change.
BYD will build a manufacturing plant in Thailand. The export-focused plant should be running in 2024 with annual production capacity of 150,000 vehicles.
BYD’s exports rose to a fresh high of 7,736 in September vs. 5,092 in August and 4,026 in July. That figure should surge in the next few months.
BYD has started Atto 3 deliveries in New Zealand, Australia and Singapore. The Atto 3 is the Yuan Plus’ name for most overseas markets. Several other Asian countries will follow in the next few weeks and months.
On Sept. 28, BYD held a launch event for Europe, and its three initial models, the Tang SUV, the Han sedan and the Atto 3. Deliveries will begin across much of Europe in October or by year-end. BYD has been selling the Tang SUV in Norway since late 2021. BYD set European pricing well above the sticker price for those vehicles in China, suggesting the automaker is looking to establish itself as premium or near-premium brand on the Continent.
BYD begins deliveries in Germany and some other countries in October, with more to follow by year-end. The BYD Seal will hit Europe at some point next year, the automaker said at the Paris Air Show on Oct. 17.
BYD entered the Thailand market officially on Oct. 10, with deliveries starting later this year. BYD unveiled the Atto 3 for India on Oct. 11, while also entering Laos in the past week.
The EV giant will enter Japan with the Atto 3 in early 2023, the Dolphin/Atto 2 mid-year and Seal/Atto 4 in late 2023.
BYD is increasing its sales in Latin America, ramping up in Brazil in particular.
America isn’t officially in BYD’s sights in terms of personal EVs. Tariffs on China-made autos make exports to the U.S. cost prohibitive. BYD does make some EV buses here, with a lot of extra space at its Lancaster, Calif., site outside Los Angeles.
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Tesla Vs. BYD Batteries
Tesla doesn’t mass produce battery cells. The Sparks, Nevada, gigafactory is a joint venture with Panasonic, which makes the cells. In China and increasingly in the U.S., Tesla buys off-the-shelf batteries from CATL.
It’s increasingly shifting to lithium iron phosphate batteries. LFPs have some cost advantages, which have grown because they don’t require any cobalt or nickel, unlike lithium-ion batteries.
Tesla has long led in getting more out of its batteries, though the high-end Lucid Air has higher battery efficiency than Tesla.
Tesla is developing its own 4680 battery cells in a pilot program. The 4680 batteries don’t involve new chemistry. The larger form factor offers the potential for cost savings, but technical challenges remain.
BYD batteries, by contrast, are truly in house. The BYD Blade batteries, a specialized LFP battery, are seen as among the safest available for EVs.
BYD passed LG to be the world’s No. 2 EV battery maker in July, but is well behind China’s CATL. Growth has mostly come from BYD batteries in its own vehicles, but that is changing.
BYD is now supplying Blade batteries to Tesla Berlin. It’s a major validation, as BYD aims to be a major battery supplier to third-party automakers.
The made-in-China Ford Mustang Mach-E uses BYD batteries.
Toyota (TM) will use BYD batteries and motors in an upcoming small EV for the Chinese market, the bZ3. BYD may be actively involved in Toyota’s wider EV push in the coming years.
BYD and Tesla are on the forefront of automakers trying to lock up supplies of lithium and other key battery raw materials.
Musk has discussed Tesla getting involved in lithium mining, but hasn’t done so. Tesla recently proposed a lithium processing plant in Texas.
BYD is involved in several lithium mining projects already.
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Tesla Beyond EVs
Tesla and BYD are more than just EV makers.
Tesla has solar and battery storage businesses, but both are just a small part of total revenue.
Tesla also generates revenue via its Supercharger network. It’s starting to open its Supercharger network to non-Tesla vehicles in parts of Europe, where third-party charging stations are common. In the U.S., the Supercharger network is still a big moat for Tesla, but the automaker seems poised to open at least some stations to attract new subsidies.
Tesla’s self-driving efforts have been a key revenue driver and brand builder. If Tesla is able to create a cheap, vision-only system that is fully autonomous, the payoff will be huge. But Full Self-Driving is not full self-driving. Even FSD Beta is a Level 2 driver-assist system, while many U.S. and China rivals starting to roll out Level 4 robotaxi services in select urban areas.
The National Highway Traffic Safety Administration has expanded an Autopilot probe multiple times, looking into crashes into stationary emergency vehicles, “phantom braking,” in-cabin cameras and even how Tesla assembles reports that claim to show Autopilot’s safety benefits.
The California DMV in July accused the EV giant of misleading customers about Autopilot and FSD.
Despite all that, Tesla raised the price of FSD in North America to $15,000 from $12,000 in early September.
An Optimus robot prototype was unveiled at Tesla AI Day on Sept. 30, with limited mobility. Musk said Optimus should go on sale in 3-5 years for less than $20,000. Most experts say general purpose humanoid robots are decades away.
BYD Semiconductor, Solar And More
BYD makes its own chips, which has helped it rapidly expand over the past year while the industry had to idle production.
The company also has solar and energy storage businesses, as well as a variety of other operations.
BYD’s chairman said Sept. 2 that the automaker will add driver-assist systems in 2023.
It has several autonomous driving partnerships. BYD has said it will adopt Nvidia’s Drive system for autonomous driving. That follows a self-driving partnership with Baidu (BIDU). Baidu and Nvidia (NVDA) have long been autonomous-driving partners.
BYD also says it will use chips from Horizon Robotics in some 2023 models. That follows a driver-assist venture with China’s Momenta. BYD also has taken a stake in Lidar supplier RoboSense.
BYD is starting work on its own in-house chip for smart driving, local media reported in mid-July.
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Tesla Stock Vs. BYD Fundamentals
Tesla earnings more than tripled to $2.26 a share in 2021, vs. 75 cents in 2020 and just 1 cent in 2019.
Tesla earnings rose 57% in Q2 while revenue grew 42%, both topping views. That came despite significant challenges, notably the lengthy Shanghai production shutdown and slow return. Earnings and revenue fell vs. Q1.
Tesla earnings are due late Wednesday, Oct. 19. Earnings and revenue growth should be robust, but investors will looking for assurances about future growth, including deliveries and future products.
BYD earnings declined in 2021. Capital spending last year exceeded capex from 2018-20 combined, with huge outlays for new auto, battery and chip plants. EV and PHEV production capacity has surged in recent months and continues to increase. That is spurring massive revenue and profit gains this year and beyond.
On Aug. 29, BYD reported Q2 net profit shot up 197% vs. a year earlier in local currency terms, with revenue up 68%. Net profit leapt 245% vs. Q1.
Analysts see profitability and margins improving further in the second half, as deliveries surge and prices increase.
Oct. 17, BYD gave preliminary third-quarter results. Net profit surged 334%-365%, with adjusted profit skyrocketing 879%-1,015%.
Tesla Stock Vs. BYD Stock Technicals
Tesla stock is down 41.8% this year as of Oct. 14, according to MarketSmith analysis. BYD stock is off 28.1% after wiping out solid 2022 gains from its late June record highs.
TSLA stock hit a record 414.46 in November. On May 24, shares tumbled to a low of 206.84.
On Sept. 21, TSLA stock nearly topped its Aug. 16 short-term highs, but reversed lower with the market following the Fed rate hike.
Tesla stock has sold off sharply over the past four weeks, diving in early October on Tesla deliveries. Musk planning to go ahead and buy Twitter raises fears of further TSLA stock sales.
TSLA stock finally undercut the May lows, hitting its worst levels since June 2021. Shares popped on Oct. 17, with the market.
BYD dived July 12 on rumors that Warren Buffett would sell or all of his longtime stake. Berkshire Hathaway on Aug. 24 sold 1.33 million H-shares, according to a Hong Kong exchange filing on Aug. 30. On Sept. 1, Berkshire sold 1.72 million shares.
Fears that Buffett will continue selling BYD stock spurred a rush to the exit. Berkshire owns less than 8% of BYD, based on all share classes.
BYD stock tumbled on Aug. 30, below its 200-day line. Shares have kept selling off. BYDDF rose modestly following deliveries and the SIXT deal, but fell back to the worst levels in nearly seven months.
Shares popped Oct. 17 on a market bounce and BYD’s strong preliminary profit.
Tesla Stock Market Cap
In terms of market cap, Tesla stock vs. BYD stock is no contest. Tesla is worth $642.33 billion. That’s leagues above BYD’s roughly $66.7 billion.
BYD’s market cap exceeds that of Rivian stock and Lucid stock combined. It’s also above the valuations of GM and Ford.
An S&P 500 giant, Tesla stock has an array of institutional sponsorship, including many IBD-style mutual funds and other A+ funds. TSLA stock remains a major holding across Ark Invest’s ETFs.
BYD stock has far-less big sponsorship, though Buffett’s Berkshire has been a notable investor for years. Cathie Wood’s Ark also owns a small stake. Very few stocks can boast both Buffett and Wood as investors.
BYD stock is listed in Hong Kong and Shenzhen, and only trades over the counter in the U.S. That also means the BYDDF stock chart shows a lot of minigaps.
Tesla Stock Vs. BYD Stock
In many ways BYD is what Tesla claims or aspires to be. BYD makes its own batteries and chips, as well as many other key parts. It’s selling its batteries to other automakers, including Tesla itself. Musk has long touted a goal of a $25,000 Tesla. BYD already sells many EVs at or below $25,000, and at a profit. Musk has mulled getting involved in lithium mining. BYD already is.
BYD’s EV and PHEV unit sales have raced past Tesla’s unit sales, with the automaker accelerating production and moving toward more-upscale offerings. For now, Tesla sells more far more pure electrics than BYD — though the gap is narrowing — and at much-higher price points. Both are reporting booming earnings.
BYD is expanding into several big markets, with several more in the next few weeks and months.
Both EV giants are delivering far more vehicles than rivals, though Tesla does face some demand concerns.
Tesla stock and BYD stock were among the biggest EV winners in 2021. Both are down sharply in 2022 and need serious repair.
So, Tesla stock vs. BYD stock? Investors should keep their eyes on them.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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