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.
Both recently reported record deliveries and have huge expansion plans. Tesla Berlin and now Tesla Austin are starting deliveries. BYD is opening multiple plants this year, launching several new models and expanding into new export markets.
Tesla earnings surged 246% in the first quarter vs. a year earlier, the company reported April 20. BYD reported 241% earnings growth in Q1 on April 27.
But while they are the two largest EV makers, their models haven’t competed much head-to-head. That’s now changing, with the BYD Seal taking on the Tesla Model 3.
Barring major production shutdowns, BYD appears set to easily seize Tesla’s EV crown in Q2, with record sales in April and May.
Tesla stock and BYD stock were winners in 2021. Tesla recently set fresh 2022 lows. BYD stock is now up for the year and flashing an aggressive entry.
Which is a better bet now? Let’s take a look at Tesla vs. BYD — and Tesla stock vs. BYD stock.
Tesla Vs. BYD Sales
Tesla, the world’s largest electric-vehicle maker, 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.
Q1 deliveries included 295,324 Model 3 and Model Y vehicles, down slightly vs. Q4. Tesla also delivered 14,218 Model S and X vehicles, up modestly vs. Q4.
But Tesla Shanghai production was shut down entirely from March 28-April 18 due to the city’s strict Covid lockdowns, followed by limited single-shift production until May 23. Tesla Shanghai since then reportedly has been operating two shifts, with a return to full production at some point in June. Before the shutdowns, the plant used three shifts.
On June 1, the city of Shanghai opened up further. It’s offering new EV subsidies, joining several regional government in announcing fresh incentives. Shanghai is Tesla’s biggest market in China.
China signaled that it will encourage EV and hybrid sales in rural areas, a move that should boost BYD.
Tesla’s global second-quarter production and deliveries will fall substantially vs. the first quarter, though it could rebound in Q3 to record levels.
On June 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 production hiccups, helped by its in-house battery and chip operations.
BYD’s passenger vehicle sales totaled 114,183 in May. That includes 53,349 EVs, a slight decline vs. April, and 60,834 PHEVs. Unlike Tesla and almost every other automaker in China, BYD has seen little impact from the now-fading Covid shutdowns.
BYD’s PHEV sales have skyrocketed thanks to a new DM-i system that provides substantial battery range.
In Q1, BYD sold 286,329 EV and hybrid vehicles. That was nearly equal to Tesla’s all-electric deliveries.
BYD is highly likely to maintain its sales lead over Tesla in Q3 and beyond, given its slew of new models, factories and markets.
BYD’s sales are far above those of Nio, Li Auto and Xpeng, let alone U.S. EV startups Lucid and Rivian Automotive.
BYD halted production of traditional gas-burning vehicles at the end of March. Those sales had been winding down considerably.
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. The Berlin plant in particular is not completely finished, limiting production.
Ongoing capacity increases to the Tesla Shanghai facility also will boost production. Tesla plans to build a second Shanghai plant. It’s unclear when Tesla would start work on the second China site.
Analysts had expected Tesla to deliver 1.5 million EVs in 2022, though the Shanghai shutdown and lengthy limited production will likely reduce sales by more than 50,000.
BYD also is adding significant EV capacity, along with a number of new or expanded battery plants.
The auto giant has signaled that it will conservatively sell 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. Tesla has raised prices several times in the past year.
BYD and several other automakers have raised prices recently due to soaring raw-material costs. With EV and overall auto production still constrained, automakers’ pricing power remains robust.
BYD also has the benefit of lower-cost China production, but its ASPs 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 in the fourth quarter. Various reports suggested the premium brand will be called Xingji, which means “star.” The brand will target the luxury market of 800,000 ($119,520) to 1.5 million yuan vehicles, the exec said, who added that the first model will be an off-road SUV.
BYD has increased its stake in its Danza joint venture with Mercedes-Benz to 90% from 50%. Danza, which just launched a minivan in EV and PHEV variants, will be more in the affordable luxury space.
On the low end, a BYD Seagull hatchback will soon launch with a $9,000 price tag.
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 following 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 have a robotaxi model with no steering wheel or pedals in production by 2024, but that timelines seem unlikely for a host of 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 such as the flagship BYD Han sedan. 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 China 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, including in battery range.
The most-important upcoming model for BYD is the Seal sedan, marking its 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 BYD 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, receiving 22,637 in the first seven hours. Deliveries will start in a few months. Unlike many Tesla rivals, when BYD launches a new model, it quickly produces in volume.
A successful Seal launch would not only provide another boost to rapid sales growth, but could burnish BYD’s brand as it expands into new markets.
BYD’s 90%-owned Denza joint venture launched the Denza D9 minivan on May 16, with all-electric and hybrid versions starting at slightly under $50,000.
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.
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 presumably will export far fewer Model Ys to Europe, though Model 3 shipments will likely continue.
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, announcing plans to be in 45 Brazilian markets by year-end.
BYD will begin selling the Yuan Plus in Australia, branded as the Atto 3 for the local market, in July or August. BYD’s Dolphin and Seal will later enter the Australian market, perhaps with the Atto 2 and Atto 4 names.
BYD’s low to moderately priced vehicles could serve rich and developing nations, while Tesla’s current and planned vehicles are clearly aimed at affluent customers in rich nations.
America isn’t in BYD’s sights for now. 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.
Tesla Vs. BYD Batteries
Tesla doesn’t make battery cells, at least not in mass production. 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 there are technical challenges.
BYD batteries, by contrast, are truly in house. The BYD Blade batteries, a specialized LFP battery, have good range and are seen as among the safest available for EVs.
BYD sells its batteries to other automakers, which could be a growing business in 2022 and beyond.
BYD is ready to buy six lithium mines in Africa, according to local media. That would provide enough lithium to satisfy its battery needs for a decade. BYD already has some investments in lithium operations.
The made-in-China Ford Mustang Mach-E, just starting deliveries, 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. There is widespread speculation that BYD will be actively involved in Toyota’s wider EV push in the coming years, including but possibly not limited to batteries.
Nio will work with BYD on the former’s upcoming sub-brand that will target the mass market, according to local media reports. A deal would likely involve BYD Blade batteries. Chinese handset giant Xiaomi reportedly will use BYD Blade batteries as it prepares to enter the EV market.
BYD also has begun licensing its DM-i hybrid system to other automakers.
BYD and Tesla are on the forefront of automakers trying to lock up supplies of lithium and other key battery raw materials. BYD is involved in lithium mining projects.
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.
One of Tesla’s most important and most controversial products relates to its self-driving efforts, notably Autopilot and Full Self-Driving. FSD has 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 is stepping up oversight vs. the EV giant, with a big probe of Autopilot crashes into stationary emergency vehicles.
On the Q1 earnings call, Musk said Tesla is putting a lot of effort on developing the Tesla Bot, or Optimus. But there is no prototype, and most experts say generalized 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 the company rapidly expand over the past year as the global industry sees production losses. 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 a number of partnerships related to autonomous driving. BYD in March 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.
In April, BYD said 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. On Dec. 23, BYD signed a strategic deal with Lidar supplier RoboSense, taking a stake.
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, while net profit margin fell. 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. That was in line with a recent forecast for 174%-300% growth. Revenue rose 63% in local currency terms.
Tesla Stock Vs. BYD Stock Technicals
Tesla stock rallied 49.8% in 2021 vs. 28.7% for BYD stock, according to MarketSmith analysis.
Tesla stock is down 26.7% as of June 2. BYD stock is up 10%, rebounding sharply since mid-March and especially early May.
Tesla has a price-to-earnings ratio of 82, still high but down sharply in the past year due to strong earnings and, recently, a fast-falling share price. BYD’s P-E is in the triple digits. High P-E stocks generally have struggled as interest rates rise.
TSLA stock hit a record high in early November after breaking out of a long consolidation in October. Shares approached those levels again in April, but have crashed over the last several weeks, plunging decisively through their 50-day and 200-day lines. On May 24, shares tumbled to a 10-month intraday low of 620.57, but rebounded to close the week at 759.63. Shares are well below possible buy points.
BYD stock hit a nine-month low on March 15. BYD stock 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 a 34.60 early entry within a 48%-deep cup base.
BYD is now extended from that early entry. It’s now setting sights on the official 41.34 buy point.
The EV giant’s relative strength line is at a record high.
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 $802.9 billion. That’s leagues above BYD, which is back above $100 billion at $102 billion.
BYD’s market cap is more than that of Rivian stock and Lucid stock combined. It’s also comfortably above the market valuations of GM stock and Ford stock. BYD has a higher market cap than Xpeng, Nio and Li Auto stock combined.
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 only trades over the counter in the U.S. That also means BYDDF stock shows a lot of minigaps.
Tesla Stock Vs. BYD Stock
In many ways BYD is what Tesla claims or aspires to be. BYD does make its own batteries and chips, as well as many other key parts. It’s selling its batteries and licensing related technology to other automakers. 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 directly in lithium mining. BYD already has some lithium mining exposure, and reportedly will vastly expand that.
BYD’s EV and PHEV unit sales are now passing Tesla’s unit sales, and 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 such as Xpeng and especially the likes of Lucid and Rivian.
Growth prospects are still strong for these EV leaders.
Tesla stock and BYD stock were among the biggest EV winners in 2021. BYD has rebounded to about unchanged in 2022. 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 has broken key support and needs a lot of repair. BYD stock has topped an aggressive entry in a deep base. 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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