Tesla Stock Vs. BYD Stock: TSLA Flashes Buy Signal, Maybe; EV Rival Sets Huge 2023 Goal
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.
Tesla stock rebounded this past week from its 50-day line to move back above its 200-day moving average, arguably offering an aggressive buy point.
BYD stock bounced back a little after plunging in the prior week as longtime investor Warren Buffett, whose Berkshire Hathaway (BRKB) has disclosed small share sales.
BYD the company is going from strength to strength. Earnings are booming with sales surging and several new models being released. The automaker set a massive 2023 delivery goal while a sweeping international expansion is just getting underway.
Let’s take a look at Tesla vs. BYD — and Tesla stock vs. BYD stock.
Tesla Vs. BYD Sales
Tesla reported Q2 deliveries at 254,695, slightly below views for about 256,000. That was down nearly 18% vs. Q1’s record 310,048 but up 26.5% vs. Q2 2021.
Tesla produced 258,580 vehicles in Q2 vs. 305,407 in Q1.
Blame Shanghai lockdowns. Tesla Shanghai was shut down for most of April, with limited production until early June.
In Q2, BYD sold 355,021 NEVs, surging 256% from a year earlier and jumping 24% vs. Q1’s 286,329. Less than 3,000 were exported, though overseas sales are expected to climb.
So BYD didn’t just overtake Tesla, it raced past the U.S. giant by just over 100,000 vehicles, seizing the EV crown. Of course, Tesla still leads in all-electric vehicles, but BYD’s passenger EV sales did swell to 180,296 in Q2, significantly narrowing the gap.
On Sept. 3, BYD reported record August sales of 174,915 EVs and plug-in hybrids, up 185% vs. a year earlier and 7.6% above July’s 162,530. Of the 173,977 passenger vehicles, sales of pure electrics leapt 172% to 82,678. PHEV sales soared 203% to 91,299 units.
BYD Chairman Wang Chuanfu said Covid restrictions and drought impacts had some impact on August output.
In the past few days, China has imposed a lockdown on Chengdu, the capital of Sichuan province with 21 million people, amid rising Covid cases. There are concerns that Shenzhen, where BYD is based, could return to lockdown.
The company said on Aug. 30 that production capacity is above 200,000 a month, with an order backlog of more than 700,000.
BYD’s Q3 deliveries should easily top 500,000 EVs and hybrids, with all-electric vehicles around 250,000 or more.
Tesla Vs. BYD Expansion
Tesla began Model Y deliveries from its plants near Berlin, Germany, and Austin, Texas. But production has been unusually low to start.
Just-finished capacity increases to the Tesla Shanghai facility should significantly boost production going forward, though that impacted output in July and early August. Tesla China sold 76,965 vehicles in August, including 42,463 for export. September should be even stronger, with sales most in China itself.
Analysts had expected Tesla to deliver 1.5 million EVs in 2022, though Shanghai’s Covid-related production hit and slow Berlin/Austin ramps may curb that.
Still, Musk said Aug. 4 that he expects Tesla production to hit a 2 million vehicle run rate by year-end.
Tesla China wait times for new vehicles have come down sharply. Clearly, higher Shanghai production is a key factor, but is demand keeping pace?
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 1.7 million.
On Sept. 2, BYD’s chairman said the automaker is targeting 280,000 vehicle deliveries a month by year-end. He set a goal for 2023 deliveries to hit four million.
Tesla, targeting the luxury and affordable luxury markets, has far higher selling prices than BYD.
The majority of BYD’s EVs and hybrids selling for $15,000-$34,000, though some vehicles top $40,000. But selling prices are on the rise.
The China EV giant does plan to move upscale significantly.
BYD said on Aug. 30 that 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.
Earlier reports said the brand would be unveiled in the third quarter and show off its first model, expected to be an off-road vehicle, before year-end.
BYD’s Denza unit, 10% owned by Mercedes-Benz, will begin D9 minivan deliveries in late September. 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.
Denza unveiled a sporty SUV on Aug. 27. It’s technically a concept vehicle, but a similar production vehicle should launch in Q1 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.
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 said recently that the Tesla Semi, first unveiled in 2017, will begin deliveries this year.
It’s unclear if the Semi will be produced in volume or in token amounts, assuming deliveries do begin by year-end. 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’s chairman said in Sept. 2 media reports that Seal deliveries have now topped 1,000, with production ramping up over the next two months.
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 $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 build 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 far 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 vehicles in the near future.
Tesla on Aug. 26 began selling a new lower base-model Model Y to Europe, with shorter range but a much-cheaper price. The prices vary significantly, undercutting the Model 3 in some countries.
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 significantly impact Tesla vehicles’ and buyers’ eligibility. 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 EV assembly in North America — immediately 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 company said Sept. 8, confirming reports earlier in the week. The plant should start operation in 2024 with annual production capacity of 150,000 vehicles.
BYD said in August that it would enter the Thai market, as the China-focused auto giant is going truly global. Exports rose to a record 5,092 in August from July’s 4,026. That figure should surge in the next few months.
BYD has started Atto 3 deliveries in New Zealand and Australia. 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, along with deliveries across much of Europe in the fourth quarter. BYD has been selling the Tang SUV in Norway since late 2021.
BYD is making a bigger push in India, launching EV sales for the individual market.
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.
Many of these countries, including Australia, Thailand, Japan and India, are right-hand drive markets, like the U.K. The Thai plant could focus on RHD vehicles.
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.
But BYD also said the U.S. subsidy rules may dissuade it from entering the U.S. market.
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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.
That could affect the timetable for the Cybertruck as well as other vehicles such as the Semi and Roadster.
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 will start to change.
BYD is now supplying Blade batteries to Tesla Berlin. It’s a major validation for BYD, as it 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 has proposed a lithium processing plant in Tesla.
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.
The National Highway Traffic Safety Administration has expanded an Autopilot probe multiple times. The investigation began in 2021 with a look at Autopilot-related crashes into stationary emergency vehicles. The NHTSA is also looking into “phantom braking,” when Tesla vehicles suddenly brake while on Autopilot.
There has been a spate of Tesla vehicles rear-ending motorcycles on highways, leading to some fatalities.
The California DMV in July accused the EV giant of misleading customers about Autopilot and FSD.
On Aug. 18, the NHTSA requested information about Tesla’s in-cabin camera. Many, but not all, Tesla vehicles have in-cabin cameras for driver monitoring, but they aren’t necessarily positioned well and lack key features to be an effective DMS.
The NHTSA also requested data on how Tesla assembles its quarterly reports that tout Autopilot’s safety benefits. The reports are not adjusted for type of road, driver age, vehicle age, weather conditions and other key factors.
Despite all that, Musk said Aug. 21 that Tesla will raise the price of FSD in North America to $15,000 from $12,000 on Sept. 5, after the planned wide release of FSD Beta 10.69.2.
Musk has said Tesla is putting a lot of effort on developing the Tesla Bot, or Optimus. He’s said 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
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.
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.
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.
First-half net income was 3.598 billion yuan. That was at the high end of the EV giant’s July 14 preliminary first-half estimate of 2.8 billion-3.6 billion yuan.
Analysts see profitability and margins improving further in the second half, as BYD expands production and moves upscale.
Tesla Stock Vs. BYD Stock Technicals
Tesla stock is down 14.9% this year as of Sept. 9, according to MarketSmith analysis, but well off 2022 lows. For the first time in months, it’s now outperforming BYD stock, which is down 16.8% after wiping out solid 2022 gains from its late June record highs.
TSLA stock hit a record 414.46 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 206.84, down just over 50% from its record high.
On July 21, TSLA surged following earnings, blasting above short-term levels after clearing the 50-day line a few days earlier.
Tesla stock hit resistance above the 200-day line in mid-August, as the market also stalled. Shares found support at their 50-day line, reclaiming their 200-day line on Sept. 9, though recent gains have been in lighter volume.
TSLA stock arguably is actionable now. Investors also could wait for shares to clear the 300 price level, or the short-term high of 314.64.
TSLA stock is far from the official 402.73 buy point.
BYD stock broke out in late June, hitting a record 43.61 on June 28.
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.
Berkshire bought 225 million H-shares in BYD in September 2008. It’s unclear if Buffett’s recent BYD sales are part of minor profit taking or the start of a major scaling out.
Fears that Buffett will continue selling BYD stock has spurred a rush to the exit in recent days.
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, plunging 19% for the week to 27.35, their worst level in nearly four months. Covid shutdown concerns are adding to Buffett stock sale worries, trumping strong sales and earnings.
Shares have bounced back modestly, regaining just a sliver of its huge recent losses.
Tesla Stock Market Cap
In terms of market cap, Tesla stock vs. BYD stock is no contest. Tesla is worth $939 billion. That’s leagues above BYD’s $77.21 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 soon. 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 in the next few weeks and months.
Both EV giants are delivering far more vehicles than rivals, while growth prospects are strong.
Tesla stock and BYD stock were among the biggest EV winners in 2021. Tesla stock is down for the year, but has rebounded to flash an aggressive buy point. BYD stock is well off highs, though the business itself is thriving.
So, Tesla stock vs. BYD stock? TSLA has the edge for now, but 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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