Which EV Company and Stock is better, Tesla or BYD?

Tesla vs. BYD Inc.

Tesla and BYD are two of the largest electric vehicle (EV) makers in the world and have become more direct competitors in China and around the globe. However, despite their rivalry, the two companies have also become allies. BYD is China’s largest automaker and has surpassed Tesla in vehicle sales in 2022. However, Tesla remains the leader in all-battery electric vehicle sales globally. Tesla has had a difficult year, and its earnings fell significantly in Q1 2023, with gross margins plunging, whereas BYD reported strong Q1 earnings growth. Tesla’s stock has experienced a tumultuous year, after a terrible 2022, and is attempting to bounce back, while BYD’s stock is just below a buy point.

Tesla has a smaller lineup than BYD, with just four models, while BYD has an ever-growing range of EVs with prices ranging from $11,000 to $160,000. Tesla has been slashing its prices multiple times this year to cope with its booming production capacity and weak demand, and Chinese EV makers, including BYD, have followed suit. BYD is reportedly going to start supplying batteries to Tesla, making the two companies not only rivals but also frenemies.

Tesla’s deliveries in Q1 2023 reached a record 422,875, up 36% YoY, but they only rose 4% compared to Q4, despite significant price cuts and U.S. EV tax credits. On the other hand, BYD reported April sales of 210,295 vehicles, up slightly from March, but still down substantially compared to December. Of these, BYD sold 104,364 BEVs and 105,103 plug-in hybrid vehicles (PHEVs).

Tesla leads BYD in BEV sales globally, but BYD is the largest automaker in China. Tesla has been leading the EV price war, which has had an impact on BYD’s sales, particularly for vehicles such as the Han and Seal. Chinese EV makers are releasing a slew of new models, many of which will compete directly with Tesla’s vehicles.

Tesla has been cutting its prices globally, making the Model 3 and Y eligible for new U.S. tax credits. However, in early May, Tesla raised prices slightly for the Model 3 and Y in the U.S. and many other key markets. It also raised prices for the Model S and Y in China but offset that with free Supercharging for three years. Tesla is expected to begin early production of the Cybertruck, which will be its first new vehicle since the Model Y launched in early 2020. However, volume production may not begin until 2024, and Tesla has not released the Cybertruck’s prices or specs yet.

While Tesla remains the leader in all-battery electric vehicle sales globally, BYD has surpassed Tesla in vehicle sales in China, becoming China’s largest automaker. Both companies have slashed their prices, but Tesla’s earnings have fallen significantly in Q1 2023, while BYD reported strong Q1 earnings growth. The two companies have become rivals and allies, with BYD reportedly supplying batteries to Tesla. As Chinese EV makers release a slew of new models that will compete directly with Tesla’s vehicles, it remains to be seen which company will emerge victorious in the EV market.

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