BYD, the Chinese electric vehicle (EV) manufacturer, is on track to surpass Tesla in sales, putting Tesla CEO Elon Musk’s decision to delay the production of a low-priced vehicle at risk.
While there are some positives for Tesla within the numbers attributed to BYD, such as catering to different market segments, losing the top spot is a tough pill to swallow.
On Wednesday, BYD reported its October sales volumes, revealing impressive figures. The company sold a total of 301,095 passenger vehicles, consisting of 165,505 battery electric vehicles (BEVs) and 135,590 plug-in hybrids. The BEV sales alone witnessed a significant growth of 60% year over year, while hybrid sales increased by 19%.
BYD’s steady expansion is giving Tesla a run for its money. Currently, BYD is virtually on par with Tesla as a producer of all-battery electric vehicles. In Q3 alone, BYD shipped around 432,000 BEVs, while Tesla shipped approximately 435,000 units.
This marks the closest the competition has ever been between the two companies. In Q3 2022, BYD shipped 258,610 units compared to Tesla’s 365,923 units. Moving further back in time, in Q3 2021, BYD shipped 91,684 units compared to Tesla’s 237,823 units.
Looking ahead to the fourth quarter, Wall Street estimates predict that BYD will have an edge over Tesla, with estimated shipments of about 490,000 BEVs compared to Tesla’s expected 475,000 units. This would be the first time in the modern EV era that Tesla loses its quarterly crown.
However, it’s worth noting that for the full year, Tesla is expected to retain its top position by shipping around 1.8 million units compared to BYD’s projected 1.5 million BEV shipments in 2023.
Ultimately, investors should prioritize growth over market leadership positions. Additionally, it’s important to acknowledge that the majority of BYD’s sales come from China, while Tesla operates in various international markets. Furthermore, Tesla vehicles tend to have higher price points than BYD’s offerings.
On average, each unit sold by Tesla amounts to approximately $54,000, whereas BYD vehicles have an average price of around $28,000.
The Market for Lower-Priced EVs: BYD’s Success and Tesla’s Strategy
BYD, a major player in the electric vehicle (EV) industry, has showcased its success in capturing a market for lower-priced EVs. While Tesla is also venturing into this space, their focus so far has been on bigger vehicles, notably the Cybertruck set to be delivered soon.
The Debate on Timing: BYD’s Growth vs. Tesla’s Smaller Vehicle
As BYD continues to expand its presence, investors are increasingly pondering the timing of Tesla’s entry into the lower-priced EV segment. The company certainly needs new models to maintain sales growth, a sentiment echoed by Wall Street analysts. Although the Cybertruck is on the horizon, the specifics of Tesla’s smaller vehicle remain uncertain.
The Strength of the Chinese EV Market
Both BYD and Tesla investors can take solace in the robustness of the Chinese EV market. BYD experienced a remarkable 60% year-over-year increase in sales. Moreover, the combined October sales volumes of NIO, XPeng, and Li Auto surged by approximately 200% compared to the previous year. These four EV makers collectively account for a significant share of the Chinese battery electric vehicle (BEV) market, ranging from 30% to 40%.
Sales Figures and Performance
Tesla’s sales volumes are reported quarterly, while industry associations provide additional insights into their deliveries. As of September, Tesla sold around 433,000 BEVs in China, marking a solid 36% year-over-year growth. Despite BYD’s recent decline in U.S.-listed American depositary receipts during late trading on Wednesday, analysts still consider their results a “beat” relative to expectations. It is worth noting that BYD shares have performed remarkably well over the past 12 months, witnessing a notable increase of approximately 29%. On the other hand, Tesla’s stock exhibited a slight increase in late trading.