Tesla Stock Vs. BYD Stock: Tesla Shanghai Eyes Restart As Earnings Loom, But BYD Set To Seize EV Crown
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 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 and launching several new models and expanding into new export markets.
Tesla earnings are on tap April 20.
Tesla Shanghai Restart
The Tesla Shanghai plant, shut down due to Covid restrictions since March 28, reportedly will reopen on Monday. Some staff will enter a “closed-loop” system, living on site. Production will start with one shift. A return to full, two-shift production will depend on Covid control within the factory. Suppliers and logistical challenges could hinder output as well. In a best-case scenario, Tesla would reach pre-shutdown output levels by mid-May.
Tesla will suffer a big drop in second-quarter production, even with the Berlin and Austin plants slowly ramping up. It’s unclear if the Shanghai shutdown and related issues has had or will have an impact on production at Tesla Berlin, which gets batteries and some other parts from China.
China’s Covid shutdowns in Shanghai and elsewhere has affected many automakers. On April 9, Nio halted production at its plant in Hefei — west of Shanghai — citing supplier shutdowns. It’s reportedly slowly restarting output.
BYD appears to have largely avoided production hiccups, helped by its in-house battery and chip operation. BYD appears to have a big head start as it seeks to seize Tesla’s EV crown in Q2.
China’s Covid lockdowns likely will affect short-term auto demand, especially in Shanghai, a key Tesla market.
Tesla stock and BYD stock were winners in 2021. Tesla has found its footing after a rough start to 2022, though trading has been volatile. BYD stock is down for the year, but is rebounding as well.
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 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.
Tesla sold 65,814 vehicles from its Shanghai plant in March, the China Association of Automobile Manufacturers reported Monday. That was part of industry data for March EV and overall auto sales. Just 60 vehicles were exported. March’s reading was Tesla China’s second highest since December’s 70,847.
BYD on April 3 reported March sales of new energy sales hit 104,878, up 333% vs. a year earlier. That’s up from 88,283 NEV sales in February, with the China New Year affecting sales. BYD sold 93,168 NEV vehicles in January, when a 30% subsidy cut in China affected a lot of EV makers.
The March total includes 104,338 passenger cars, virtually all in China. Of that, BYD sold 53,664 pure electric vehicles, up 229% from a year earlier. Plug-in hybrid sales skyrocketed 615% to 50,674.
BYD’s hybrid sales have surged thanks to a new DM-i system that provides substantial battery range.
For the quarter, BYD sold 286,329 EV and hybrid vehicles. That is nearly equal to Tesla’s all-electric deliveries.
BYD had a decent chance of passing Tesla sales in the second quarter, even before the Shanghai plant shutdown. By Q3, BYD will almost certainly pass Tesla, given its slew of new models, factories and new markets.
It’s possible that BYD’s EV-only sales will top Tesla sales by year-end.
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 as of the end of March. Those sales had been winding down considerably.
Tesla Vs. BYD Expansion
Tesla has finally begun Model Y deliveries from its plants near Berlin, Germany, and Austin, Texas. They’ll likely ramp up Model Y production and deliveries slowly over time.
Ongoing capacity increases to the Tesla Shanghai facility also will boost production. There also are reports that Tesla will build a second China plant.
Analysts had expected Tesla to deliver 1.5 million EVs in 2022, though the Shanghai shutdown could reduce sales by 50,000 or more.
BYD also is adding significant EV capacity.
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.
BYD has opened or will open three new factories in early 2022, boosting annual capacity by another 500,000 vehicles. Local media reported that a new factory in Jiangxi province was set to begin mass production on April 15.
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.
Tesla, 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 between for $15,000-$34,000, though some vehicles top $40,000. The China EV giant does plan to move upscale, competing more directly with Tesla as well as Nio, Xpeng and Li Auto. It reportedly will unveil a high-end brand in the first half of 2022, starting with a large crossover SUV.
BYD has increased its stake in its Danza joint venture with Daimler to 90% from 50%. Danza, which is not a big auto operation, could be another avenue for BYD to move upscale.
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 could 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 also said Tesla is not currently developing 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 and hybrid 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, with a subsidized price starting below $21,000. The all-electric Yuan Plus has a range of (267 miles-317 miles) under a very loose China standard. The compact SUV is BYD’s second Ocean line EV using its e-platform 3.0, following the smaller Dolphin. The Yuan Plus also is kicking off an expansion into new export markets, notably Australia.
Among BYD’s upcoming models is the Seal sedan. The Seal will be a Model 3 rival, but significantly cheaper. Unlike many Tesla rivals, when BYD launches a new model, it quickly produces in volume.
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 flagship BYD Han already comes in all-electric and an older hybrid form. The all-electric Han also got a substantial upgrade, including a big increase in battery range. BYD said on April 10 that it received more than 48,000 order for the updated Han EV and hybrid models, which have been available for preorder since March 19.
BYD also is one of the biggest makers of electric buses, with plants in the U.S. and many other countries besides China. In late January, BYD unveiled a new smaller school bus for the U.S. market with bus-to-grid charging abilities.
BYD has gotten a slew of bus orders recently in Europe, where diesel buses are being phased out. That could serve as a steppingstone for BYD’s personal EV ambitions on the Continent.
BYD also makes EV delivery trucks, big rigs, garbage trucks and more. Anheuser Busch recently added another 20 BYD electric trucks to its California fleet. BYD signed a deal to delver 200 class 8 electric trucks in the U.S. for Sweden’s Einride.
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 many BYD parts, including 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, as well as the Mideast. It has four plants, starting with Fremont, Calif., and Shanghai, with the Austin, Texas, and Berlin-area plants getting started. Tesla already exports to Europe, mostly from the Shanghai plant.
As the Berlin plant ramps up, the Shanghai plant presumably will export far few 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.
New U.S. EV credits would provide another Tesla demand boost at home. But that hasn’t happened yet and there is a risk that Congress will not approve them.
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.
Another upside is that 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 some EVs to Latin America.
BYD officially launched Yuan Plus pre-sales in Australia, branded as the Atto 3 for the local market, on Feb. 19. Atto 3 deliveries begin in July. BYD’s Dolphin and Seal will enter the Australian market, perhaps with the Atto 2 and Atto 4 names, BYD’s importer says. The Dolphin could launch by year-end with the Seal in Q2 2023.
BYD’s low-to-moderate-priced vehicles could serve rich and developing nations, while Tesla’s current and planned vehicles are clearly aimed at affluent customers in rich nations. But America isn’t in BYD’s sights for now. Tariffs on China-made autos make exports to the U.S. cost prohibitive.
BYD does not have any public plans for a U.S. EV plant so far, though it 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 actually make battery cells, at least not in mass production. The Sparks, Nevada, gigafactory is a joint venture with Panasonic. Panasonic makes the battery cells, Tesla packs them together. In China and increasingly in the U.S., Tesla buys off-the-shelf batteries from CATL. It’s increasingly shifting to lithium iron phosphate (LFP) batteries. LFPs have some cost advantages, which have grown because they don’t require any cobalt or nickel, unlike lithium-ion batteries.
However, Tesla has long led in getting more out of its batteries, though it recently has been surpassed by Lucid. 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.
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, 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.
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Tesla Beyond EVs
Tesla and BYD are more than just EV makers.
Tesla has solar and battery storage businesses. Both 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. However, other charging stations are increasing rapidly, with the recently passed infrastructure bill providing funding for more.
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.
There are downsides. Regulators could step in, forcing major changes, restricting or barring Tesla’s driver-assist systems. The National Highway Traffic Safety Administration is stepping up oversight vs. the EV giant, mandating a number of recalls in recent months. The NHTSA is conducting a probe of Autopilot crashes into stationary emergency vehicles.
If Tesla is unable to move past Level 2, while rivals such as GM’s Cruise, Ford-related Argo, Google’s Waymo and many China operators roll out Level 4 robotaxi services in city after city, its brand and stock could take a hit. Bullish analyst price targets for TSLA stock often assume huge self-driving revenue in the coming years, along with massive EV market share.
Elon Musk said on the Q4 earnings call that, instead of releasing new vehicle models, Tesla would focus 2022 on developing the Tesla Bot. 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. In late January, the automaker won approval to list its BYD Semiconductor spinoff on the Shenzhen ChiNext market.
BYD also has solar and energy storage businesses.
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.
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.
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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. Q4 sales jumped 65% to $17.7 billion.
Tesla earnings for the first quarter are due Wednesday night.
BYD earnings declined in 2021, while net profit margin fell. Capital spending in 2021 exceeded capex from 2018-2020 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, without massively hyped grand opening events. That will spur massive revenue gains this year and beyond, driving future profits. BYD capex also goes for new models and battery technology.
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 6.8% in 2022, recently pulling back but well off lows from just a few weeks ago. BYD stock is down 11.8%, but that’s a big improvement from mid-March.
Both stocks have triple-digit price-to-earnings ratios. 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 had wide-and-loose action since then.
Tesla surged March 28 after signaling it’ll seek shareholder approval later this year for another stock split. That overshadowed news that the Shanghai plant would close due to the city’s new Covid lockdowns.
On April 5, TSLA stock reached 1,152.87 intraday, right around a trendline entry. Shares reversed solidly lower and have trended down since then. But Tesla stock now has a handle, offering a new, lower buy point 1,152.97.
Elon Musk’s bid for Twitter (TWTR) is a potential headwind for TSLA stock. If Musk does buy the social network, he may need to sell another slice of his holdings to finance the deal.
BYD stock also broke out in October to record highs, but tumbled back, hitting a 9-month low on March 14.
But BYD stock has bounced back, moving back above the 50-day line. Investors should wait for BYD to reclaim the 200-day and build the right side of a base and look for a proper entry down the road.
Tesla Stock Market Cap
In terms of market cap, Tesla stock vs. BYD stock is no contest. Tesla has a $1.02 trillion market valuation. That’s leagues above BYD’s $81.8 billion.
BYD’s market cap is more than that of Rivian stock ($36.6 billion) and Lucid stock ($34.7 billion) combined. It’s also comfortably above the market valuations of GM stock ($58.3 billion) and Ford stock ($62.2 billion). BYD has a significantly higher market cap than Xpeng, Nio and Li Auto stock.
Now 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.
Tesla also is on IBD Leaderboard.
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.
One issue is that BYD stock is listed in Hong Kong and trades over the counter in the U.S. That also means BYDDF stock shows a lot of minigaps, with most of the share price action reflecting Hong Kong trading.
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. 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.
In the here and now Tesla sells more far more pure electrics than BYD, and at much-higher price points. Tesla earnings are booming while BYD earnings have recently declined.
BYD has many big markets to expand into, including several this year, though it’s unclear when it might try to tackle the U.S. EV market.
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, though Lucid stock and Ford had big years. TSLA stock and BYD stock are rebounding, while many other EV and traditional automakers are struggling.
So, Tesla stock vs. BYD stock? Both are EV leaders with booming sales growth and strong prospects. Both stocks performed well in 2021.
Tesla stock is performing better right now and could be actionable soon. But BYD stock is also coming back. 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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