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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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Both have reported record deliveries and have huge expansion plans. Tesla Berlin and now Tesla Austin are starting deliveries, while the Shanghai plant is finally back at full speed. BYD is opening multiple plants this year, launching several new models and expanding into new export markets.
BYD should easily seize Tesla’s EV crown in Q2.
Tesla will report second-quarter production and deliveries in early July, with Saturday, July 2 the likeliest date. BYD will release June sales figures around the same time, perhaps July 2 or 3. Nio, Xpeng and Li Auto reported strong June deliveries on July 1.
While they are the two largest EV makers, their models haven’t competed much head-to-head. But the BYD Seal is set to take on the Tesla Model 3.
Yet even as their EV competition ramps, BYD will supply batteries to Tesla, a senior BYD executive said on June 8.
Meanwhile, Tesla faces growing regulatory scrutiny of its self-driving systems, with multiple probes by the National Highway Traffic Safety Administration. On June 15, the NHTSA released accident data involving driver-assist systems, with Autopilot dominating the list.
Full-on Covid lockdowns in major Chinese cities and provinces have ended, but significant restrictions and testing requirements remain in much of the country.
In late June, China’s government offered the strongest signals yet that it will extend some EV subsidies past 2022. Several local governments, including top Tesla market Shanghai, have already boosted EV subsidies. Beijing on June 26 announced new subsidies for EVs and plug-in hybrids.
Tesla stock has avoided undercutting May lows in recent weeks, but is retreating again. BYD stock is up solidly for the year, in a buy zone.
Which is a better bet? Let’s take a look at Tesla vs. BYD — and Tesla stock vs. BYD stock.
Tesla Vs. BYD Sales
Tesla on April 2 reported Q1 worldwide deliveries of 310,048. That just topped Q4’s record of 308,600, but was up sharply from 241,300 in Q3, 201,250 in Q2 and 184,800 in Q1 2021.
Tesla sold 32,165 made-in-China vehicles in May, well below normal, but up from just 1,512 in April. Tesla Shanghai produced 33,544 vehicles vs. typical production of 60,000 vehicles or more. Still, that’s up from 10,757 in April, when the Shanghai plant was shut down for most of the month as part of citywide Covid lockdowns.
Tesla Shanghai is back to full production. Still, Tesla’s global Q2 production and deliveries will fall substantially vs. the first quarter, with revised estimates around 260,000.
Tesla will release Q2 output and deliveries data in early July, possibly on July 2.
China EV and battery giant BYD (BYDDF) reported May sales of 114,943 EVs and plug-in hybrids. Sales surged 250% vs. a year earlier and rose 8% vs. April’s 106,042. The EV giant largely avoided lockdown-related woes, helped by its in-house battery and chip operations.
BYD’s passenger vehicle sales totaled 114,183 in May. That included 53,349 EVs, a slight decline vs. April, and 60,834 PHEVs.
BYD’s PHEV sales have skyrocketed thanks to the DM-i system that provides substantial battery range.
BYD will likely set a new monthly record in June, releasing results on July 2 or 3.
In Q2, BYD is set to easily top Q1 sales of 286,329 EV and hybrid vehicles.
The EV giant will likely release June sales figures on July 2 or 3.
Even as Tesla output rebounds, BYD is likely to maintain its sales lead in Q3 and beyond, given its slew of new models, factories and markets.
BYD’s sales are far above the combined sales of Nio, Li Auto, Xpeng, Lucid and Rivian Automotive.
BYD ended production of traditional gas-burning vehicles at the end of March.
Tesla Vs. BYD Expansion
Tesla recently began Model Y deliveries from its plants near Berlin, Germany, and Austin, Texas. But production and deliveries will ramp up slowly over time.
Ongoing capacity increases to the Tesla Shanghai facility will boost production as well.
Tesla Shanghai reportedly will shut down its production lines for the Model Y and then the Model 3 for a few weeks to start the third quarter, with the goal of substantially boosting production capacity.
Analysts had expected Tesla to deliver 1.5 million EVs in 2022, though Shanghai’s Covid shutdown and lengthy limited production will likely reduce sales by more than 50,000.
Despite big expansion plans, Tesla is slashing hundreds if not thousands of jobs. Elon Musk, fearing a recession, had warned in early June that he wanted to cut 10% of jobs. He later clarified that he meant salaried positions, though some hourly production workers also have been affected.
BYD also is adding significant EV capacity, along with a number of new or expanded battery plants. A sixth auto plant began rolling vehicles off the line on June 30.
The auto giant expects to sell at least 1.5 million new energy vehicles in 2022, or up to 2 million if supply issues ease. That’s up from 2021’s NEV sales of 593,745.
Tesla, targeting the luxury and affordable luxury markets, has far higher selling prices than BYD. It recently announced big price hikes in the U.S. and China.
BYD’s average selling prices are much lower, with the majority of its EVs and hybrids selling for $15,000-$34,000, though some vehicles top $40,000.
The China EV giant does plan to move upscale significantly. It will unveil a high-end brand in the third quarter and show off its first model before year-end. The brand will target the luxury market of 800,000 ($119,520) to 1.5 million yuan vehicles, a BYD exec said in May, who added that the first model will be an off-road SUV. A second model could be large sedan.
BYD’s Danza unit, 10% owned by Mercedes-Benz, will begin deliveries in August of a minivan in EV and PHEV variants. It starts at just under $50,000, with some variants going up to $69,000. A Danza SUV will be unveiled later this year.
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.
Tesla has long touted the Roadster, Semi and Cybertruck as future vehicles. But those have been pushed back multiple times. Musk says he hopes Cybertruck production will begin in 2023.
That suggests Tesla will go three years — or more — before launching a new vehicle since the Model Y in spring 2020. Also, the Cybertruck likely will largely serve the U.S. market. So Tesla may not have a new vehicle for most of the world until 2024 or later.
Musk said on the Q1 earnings call that he hopes to begin production of a robotaxi with no steering wheel or pedals by 2024, but that timeline seems unlikely for many reasons.
Musk also said Tesla is not working on a $25,000 vehicle, a goal he had touted for years. That would be key to reaching much of the global auto market. Even now, such a model would run into dozens of existing rivals, mostly from Chinese EV makers such as BYD.
The Cybertruck, Semi and Roadster vehicles may require big improvements in batteries or battery technology to be viable.
Tesla is struggling with technical issues for mass producing the 4680 battery. Some Austin-made Model Ys have 4680 battery packs from a pilot line, but cost savings are likely elusive.
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, along with notable revamps or longer ranges for key models.
BYD began sales of the Yuan Plus in February. The compact SUV is BYD’s second EV using its e-platform 3.0, following the smaller Dolphin. The Yuan Plus also will soon hit export markets, notably Australia.
BYD on April 10 officially launched more-advanced hybrid versions of its BYD Han, with an electric-only range of up to 150 miles on a China standard. The all-electric Han also got a substantial upgrade in battery range.
The Seal sedan will be BYD’s first clear head-to-head competition vs. Tesla. The BYD Seal is a Model 3 rival, with roughly equal range and faster acceleration — and $10,000 cheaper. The Seal starts at 212,800 RMB ($31,893) vs. 279,900 RMB ($41,950) for a base made-in-China Model 3.
BYD began Seal preorders on May 20, with mass production starting in June in Changzhou, according to the city government. Unlike many Tesla rivals, when BYD launches a new model, it quickly produces in volume. Deliveries should begin over the next several weeks.
The BYD Seal reportedly has received more than 110,000 pre-orders since they opened on May 20.
A successful Seal launch would not only further boost rapid sales growth, but could burnish BYD’s brand as it expands into new markets.
On the low end, a BYD Seagull hatchback will soon launch with a price tag around $9,000.
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.
The Denza D9 minivan will begin deliveries.
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. Also at Lancaster, BYD will assemble the next generation of Nuro self-driving delivery vehicles, using Blade batteries.
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Tesla Stock Vs. BYD Stock: EV Markets
Tesla is a truly 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 the Shanghai plant.
As the Berlin plant ramps up over time, the Shanghai plant will export far fewer Model Ys to Europe, though Model 3 shipments will likely continue.
Elon Musk, in a May 31 interview released in late June, said the Berlin and Austin factories are losing billions of dollars due to low production.
While Tesla capacity is set to soar, it has no major new markets to enter or any new vehicles in the near future.
BYD’s auto plants are in China, with virtually all its sales there. BYD easily tops Tesla in local China sales, even just in EVs.
That means BYD has a lot of markets to expand into. In late 2021 it began selling the Tang SUV in Norway, giving it a foothold for a much-larger expansion across Europe.
It is shipping various EVs and hybrids to much of Latin America, with plans to be in 45 Brazilian markets by year-end.
BYD will begin selling the Yuan Plus in Australia, branded locally as the Atto 3, in July or August. The Dolphin and Seal will later enter the Australian market, perhaps with the Atto 2 and Atto 4 names.
America isn’t 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.
EV ‘Freak-Out’ Moment Looms Over Lithium, Rare Earths
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 battery chemistry. The larger form factor offers the potential for cost savings, but a number of 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 will supply batteries to Tesla, a senior BYD executive recently told state-owned TV, though that interview was later deleted. Other reports said BYD Blade batteries would be used in some made-in-China Model Y vehicles. So far Tesla has not confirmed any deal, which has been rumored for months. A Tesla deal would be a major validation for BYD as a battery supplier to third-party automakers.
The made-in-China Ford Mustang Mach-E uses BYD batteries. GM will use BYD batteries in a made-in-China Cadillac. Toyota (TM) is expected to use BYD Blade batteries in an upcoming small EV for the Chinese market. 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.
BYD is involved in lithium mining projects already. It’s reportedly struck a deal to buy six lithium mines in Africa, according to local media. That reportedly would provide enough lithium to satisfy its battery needs for a decade.
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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.
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 everywhere and anywhere, the payoff will be enormous. But for now, even FSD Beta is a Level 2 driver-assist system.
The National Highway Traffic Safety Administration on June 15 reported accidents involving driver-assist systems. Tesla vehicles using Autopilot were involved in 273 crashes from July 20, 2021, to May 21, 2022, out of 392 total. A main reason is that there are so many Tesla EVs on the road using Autopilot. Tesla has long claimed that Autopilot improves safety, but does not use apples-to-apples comparisons in terms of road type, weather conditions and more.
On June 9, the NHTSA expanded an Autopilot probe, which began with investigations of crashes into stationary emergency vehicles, to cover 830,000 vehicles. The NHTSA is asking Tesla for information regarding “phantom braking” issues, when its vehicles suddenly brake while on Autopilot.
Musk has said Tesla is putting a lot of effort on developing the Tesla Bot, or Optimus. On June 2, Musk tweeted that “we may have an Optimus prototype working” by the next Tesla AI Day on Sept. 30. Most experts say general purpose humanoid robots are decades away.
BYD Semiconductor, Solar And More
In addition to making its own batteries, BYD makes its own chips, which has helped it rapidly expand over the past year while the industry had to idle production. In late January, the automaker won approval to list its BYD Semiconductor spinoff on the Shenzhen ChiNext market. The company also has solar and energy storage businesses.
BYD has several partnerships related to autonomous driving. BYD has said it will adopt Nvidia’s Drive system for autonomous driving. The follows a self-driving partnership with Baidu (BIDU), a leader in autonomous-driving technology. Nvidia (NVDA) and Baidu have long been autonomous-driving partners.
But BYD also says it will use chips from local Horizon Robotics in some 2023 models. That follows a driver-assist joint venture with Momenta, a Chinese autonomous-driving startup. BYD also has taken a stake in Lidar supplier RoboSense.
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Tesla Stock Vs. BYD Fundamentals
Tesla earnings more than tripled to $6.78 a share in 2021, vs. $2.24 a share in 2020 and just 3 cents in 2019.
Tesla earnings shot up 246% in Q1 and revenue rose 81%, both accelerating for a second straight quarter.
BYD earnings declined in 2021. Capital spending in 2021 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 as more factories come on line. That will spur massive revenue gains this year and beyond, driving future profits. BYD capex also goes for new models and battery technology.
BYD reported first-quarter net income jumped 241% in local currency terms vs. a year earlier. Revenue rose 63% in local currency terms.
Tesla Stock Vs. BYD Stock Technicals
Tesla stock is down 35.5% so far this year as of July 1, according to MarketSmith analysis. BYD stock is up 17.6%, rebounding sharply since mid-March and especially early May.
Since the end of 2019, Tesla is up a massive 669.5%. But BYD has surged 695%.
Tesla has a price-to-earnings ratio of 77, still high but down sharply in the past year due to strong earnings and, recently, a declining share price. BYD’s P-E is well into the triple digits. High P-E stocks generally have struggled as interest rates have risen over the last several months.
TSLA stock hit a record 1,243.49 in November. Shares approached those levels in April, but then sold off hard. On May 24, shares tumbled to an 11-month intraday low of 620.57, down just over 50% from its record high.
After a brief bounce, shares tumbled in mid-June. But, unlike most megacaps, Tesla did not undercut its May 24 low. Shares have bounced back above their 21-day line, but the TSLA chart has a lot of repair work to do.
On June 27, Tesla stock hit resistance at its falling 10-week line.
BYD stock hit a nine-month low on March 15, but rebounded back above its 50-day and 10-week lines in early April. Shares surged above its 200-day line in late May. On May 26, BYD stock cleared a not-quite handle, offering an early entry within a 48%-deep cup base.
Shares broke out past a 39.81 buy point in late June and are just above that entry.
The EV giant’s relative strength line has been hitting record highs.
Tesla Stock Market Cap
In terms of market cap, Tesla stock vs. BYD stock is no contest. Tesla no longer has a trillion-dollar valuation, but it’s still worth $706.6 billion. That’s leagues above BYD’s $109 billion.
BYD’s market cap exceeds that of Rivian stock and Lucid stock combined. It’s also comfortably above the valuations of GM stock and Ford stock.
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 the No. 1 holding across Ark Invest’s ETFs.
BYD stock has far-less big sponsorship, though Warren Buffett’s Berkshire Hathaway (BRKB) has been a notable investor for years. Cathie Wood’s Ark Invest 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 are now passing Tesla’s unit sales, and the automakers is moving toward more-upscale offerings. But for now Tesla sells more far more pure electrics than BYD, and at much-higher price points. Both are reporting booming earnings.
BYD has many big markets in which to expand, including several this year.
Both EV giants are delivering far more vehicles than rivals, while growth prospects are still strong.
Tesla stock and BYD stock were among the biggest EV winners in 2021. BYD has rebounded to near record highs. TSLA stock has sold off hard in 2022, but many other EV and traditional automakers have struggled as badly or worse.
So, Tesla stock vs. BYD stock? Both are EV leaders with booming sales growth and strong prospects.
Tesla stock needs a lot of repair. BYD stock is just clearing a buy point. But investors should keep their eyes on both.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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