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Tesla Nears Breakout As Deliveries, Robotaxi Event Loom; BYD Races Through Buy Points
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ED CARSON08:10 AM ET 09/28/2024

https://www.investors.com/news/tesla-vs-byd-ev-sales-robotaxis/?src=A00220

Tesla (TSLA) and BYD (BYDDF) are the world's largest electric-vehicle makers.

In 2022, China EV and battery giant BYD's vehicle sales raced ahead of Tesla's and are now well more than twice as high. For all-battery electric vehicles (BEVs), BYD seized the crown in Q4 2023. However Tesla has regained that title in 2024.

Third-quarter sales are due for Tesla and BYD in early October.

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Tesla earnings have tumbled for several quarters, missing lowered views most of the time. CEO Elon Musk is placing more emphasis on robotaxis and robots, with a robotaxi event set for Oct. 10.

Tesla has relied on price cuts since late 2022 to offset weaker demand due to an aging lineup and rising competition. New "affordable" EVs may be coming, but they may be variants of existing models.

BYD has also cut prices, but margins remain high. Sales are rising thanks to a next-generation hybrid system and a variety of new and refreshed models. It recently opened its first full assembly plant outside of China, with several more overseas plants coming.

Tesla stock round-tripped a huge gain amid the Q2 earnings miss, but is running back toward a buy point. BYD stock has surged to a 52-week highs, clearing multiple buy points.

Tesla Vs. BYD Sales



Tesla delivered 443,956 EVs in Q2, beating lowered estimates. That was up sharply from Q1's 386,810 vehicles but down from Q2 2023's 466,140.

Along with delivery numbers, Tesla reported record energy storage deployed in Q2.

BYD announced record Q2 sales of 986,720, up 58% vs. a year earlier and 40% vs. Q1's 626,236 EVs. It's also double Tesla's Q2 total.

However, all Tesla vehicles are BEVs, while more than half of BYD sales are plug-in hybrids now. BYD delivered 426,039 passenger BEVs in Q2.

Tesla will report Q3 deliveries and energy storage figures on Oct. 2. BYD will release Q3 sales figures in early October.

BYD sold a record 373,083 vehicles in August, up 36% vs. a year earlier and 9% vs. July's 342,383.

Of the 370,854 passenger EVs, BYD sold 222,384 PHEVs, a sixth straight record high and up 73.1% vs. a year earlier and 5.5% vs. July. BEV sales came in at 148,470, up 1.95% vs. a year earlier and 14.2% vs. July.

BYD may still be production constrained as it races to meet demand, especially for its newer hybrids. Output was 366,973, below sales once again, with some evidence that official sales were below actual deliveries.

Overseas sales were 31,451, up 25.7% vs. a year earlier and 4.8% vs. July.

Commercial vehicles, including buses, delivery trucks and more, shot up to 2,229, up 643% vs. a year earlier and 40.7% vs. July.

So far in 2024, BYD has sold 2,328,449 vehicles. It looks set to easily pass the company's official target of 3.6 million EVs, and might reach an unofficial goal of four million.

Tesla, BYD Price Cuts

Tesla has slashed prices worldwide starting in late 2022. The EV giant has had to keep cutting prices or boost other incentives to prop up sales, slashing once-mighty profit margins and earnings. Deliveries have fallen vs. a year earlier so far in 2024.

Earlier in 2024, BYD slashed prices on most of its largely refreshed models, helping to revive sales.

Tesla Models

Tesla produces the Model 3, the Model Y, Model X and Model S, as well as the Semi and Cybertruck. The Model Y crossover accounts for the majority of sales.

A Model 3 revamp didn't provide much of a sales boost in China and Europe and has been lackluster in the U.S.

The Cybertruck has been produced in relatively low volume, in part due to quality issues, though output is improving. The Cybertruck, which probably is not profitable yet, is likely to be largely a North American vehicle.

Tesla has been selling the Foundation series Cybertruck, which starts at $100,000. Many more are waiting for regular variants at $80,000 or lower.

Tesla has delivered a few dozen Semi vehicles to PepsiCo (PEP). By May 2024, a few more customers, including Walmart (WMT), had taken possession of at least one Tesla Semi. But it's still unclear what the specs and price for the EV big rig are. Tesla recently said it expected mass production in 2026, but Semi timelines have often slipped by years.

Tesla Robotaxi Event

Meanwhile, Elon Musk has made a stronger push for robotaxis. A robotaxi event will take place on Oct. 10, at the Warner Bros. studio lot, vs. the initial date of Aug. 8.

The speculation is that Tesla will unveil a prototype with no steering wheel. But Tesla's Full Self-Driving, despite its name, remains a Level 2 system that requires a human driver. Without actual self-driving, an EV with no steering wheel isn't going on the roads.

So what might Tesla investors see? The robotaxi might drive around the studio, but not on roads. There may be more talk of a robotaxi ride-hailing network, but that will require robotaxis on the road.

Tesla also could show off its Optimus robot, or perhaps a prototype for the upcoming "affordable" EV.

Tesla EVs Near Term

The Model Y is expected to get a refresh in early 2025. Like the Model S, X and 3 updates — which didn't boost sales much — the "Juniper" Y likely will have cosmetic exterior changes.

The EV giant this year ditched long-touted plans for a "next-generation" EV and "revolutionary" manufacturing. Tesla now plans "affordable vehicles," using existing production lines. On the Q2 call, Musk said output would start in the first half of 2025, vs. late 2024 or early 2025 on the Q1 call. That would suggest mass production and deliveries would start in late 2025 or beyond.

The speculation is that Tesla will produce a lower-cost variant of the Model 3 or Model Y, perhaps a hatchback. It's unclear how a low-end Model 3 might fare outside the U.S., especially in China.

Tesla still hasn't even shown images for the upcoming vehicles.

BYD Expansion

BYD sells BEVs and PHEVs from around $10,000 to $150,000, with a wide range of models. It's refreshing much of its lineup, while adding several new models. That includes new models for its premium Denza, FangChengBao and Yangwang brands.

On Sept. 16, BYD disclosed that it had taken full control of Denza, buying the last 10% owned by Mercedes-Benz.

It's unveiling several new models with driver-assist systems, faster charging and improved hybrid systems.

The recently launched fifth-generation hybrid system offers touted 2,100 kilometers (1,305 miles) in combined battery-and-gas range.

The system is fueling booming orders.

Exports are a modest share of overall sales, but growing rapidly as logistics improve. They also carry better margins.

BYD's brand-new Thailand plant, its first full-assembly plant outside of China, has begun deliveries.

A Brazil factory is due to fully open in early 2025. The EV giant also has plans to build factories in Hungary, Indonesia, Turkey, Cambodia and Pakistan.

Turkey has a customs union with the EU. That, along with the Hungary plant, will be two factories for Europe. The Cambodia and Pakistan plants will likely be knock-down plants, putting together cars that are partially assembled elsewhere, as in a recently opened site in Uzbekistan.

The EV giant also is close to choosing a Mexico site and may set up in Vietnam as well.

BYD makes EV buses in California, but says it has no plans to enter the U.S. passenger EV market, amid import tariffs and political opposition. However, Trump has said he wants Chinese EV makers to build cars in the U.S.

Tesla Vs. BYD Batteries

Tesla traditionally has not mass produced its own batteries. For lithium-ion batteries, its joint venture partner Panasonic makes the cells and Tesla packages them. It also buys lithium-ion batteries from South Korea's LG. Tesla also buys a lot of lithium iron phosphate (LFP) batteries from China's CATL as well as some LFP batteries from BYD.

Tesla is working on 4680 batteries, first touted at the 2020 Battery Day. The 4680 batteries are standard lithium-ion chemistry, but the larger form factor offers the potential for various benefits and cost savings. Tesla's 4680 production has picked up in recent months.

Tesla has hinted at progress on the "dry cathode" problem, but it hasn't stated definitively that it's solved mass-production issues. It appears that the 4680 battery density is only now reaching that of traditional 2170 cells.

If nothing else, the focus on the 4680 batteries meant that Tesla did not focus on expanding production or sourcing of traditional 2170 cells that would comply with IRA tax credit rules.

Tesla is a major battery storage provider, though it gets its batteries from CATL.

Tesla vs. BYD BEV sales


BYD, meanwhile, is one of the world's largest EV battery makers. Its Blade batteries are a specialized form of lithium ferrous phosphate (LFP) or lithium iron phosphate batteries. BYD supplies third-party EV makers, including Xiaomi, XPeng's Mona sub-brand, Nio's Orvo brand and Toyota.

BYD supplies some EV batteries to Tesla Berlin.

BYD reportedly will unveil a next-generation Blade battery before year-end. That should revive flagging BEV sales in 2025.

BYD expects solid-state batteries for high-end models by 2027, but not fully reaching lower-end models until 2030-2032.

BYD is a major battery storage provider. It reportedly will be a supplier to Tesla's upcoming Shanghai Megapack factory.

Tesla's Other Businesses

Tesla has its own Supercharger network in its markets. That's especially important in the U.S. and countries like Australia, where third-party charging facilities are limited.

Tesla has deals with most automakers for access to Superchargers in the U.S. They'll also adopt the charger standard Tesla uses. Those deals, and some related charging subsidies, will boost revenue. But they reduce Tesla's charging moat in the U.S., which encouraged people to buy its EVs.

Tesla also has a solar installation business, but it's been struggling for years.

Tesla's self-driving ambitions continue. Musk is doubling down on FSD as the traditional EV business struggles. However, Tesla recently slashed the FSD prices to $8,000 from $12,000, shortly after halving the FSD subscription price to $99 a month from $199.

Tesla is now starting to offer a three-year bundle, with FSD, free Supercharging and more.

Tesla is moving toward offering FSD in China. But many automakers offer Level 2 systems there, or better.

Tesla also is pursuing a humanoid robot, Optimus, saying he expects it to be a multitrillion dollar business. On the Q2 earnings call, he said Optimus will be doing useful work in Tesla factories by late 2025, pushing back from his Q1 call's estimate of late 2024.

"We should be thought of as an AI or robotics company," Musk has told investors. "If somebody doesn't believe Tesla is going to solve autonomy, I think they should not be an investor."

BYD's Other Businesses

BYD, notably, makes its own chips. That, along with in-house batteries and other vertical integrations, help make BYD a low-cost EV maker.

The EV and battery giant also has solar operations.

BYD is introducing Level 2 driver-assistance systems in its premium brand models as well as more mainstream BYD brand offerings. BYD is rolling out advanced ADAS for highways for its Denza line, with city streets coming later this year. Those services will likely be introduced in its higher-end BYD-brand EVs in the coming months.

BYD Co. is largely known for its BYD Auto operations. BYD Electronics, which accounts for an increasingly smaller share of overall revenue, is involved in mostly low-margin businesses such as smartphone components and assembly. But margins are improving there as well.

In December 2023, BYD Electronics acquired the mobility business of Jabil (JBL), increasing its exposure to Apple (AAPL).

EU Hikes Tariffs On Chinese EVs

The European Union has started imposing additional tariffs of up to 36.1% provisionally on Chinese BEVs starting July 5. That's on top of the current 10% duties.

Specifically, the EU will impose an extra 17% tariff on BYD's BEVs vs. 36.3% for state-owned SAIC. For other automakers, they'll receive an average duty of 21.3% if they cooperate and 36.3% if they do not.

Notably, the EU reportedly will only impose a 7.8% extra tariff on Tesla's China made-vehicles. Tesla Shanghai exports the Model 3 to the EU. The EV maker in July hiked Model 3 prices in Europe slightly, further weighing on sales there amid big declines in overall EV sales.

Meanwhile, the new duties don't apply to PHEVs, a big plus for BYD. Also, BYD's future Hungary and Turkey plants will let it sidestep EU tariffs altogether.

Tesla Earnings

In the second quarter, Tesla earnings plunged 43% to 52 cents a share. It was the fourth straight big year-over-year decline and once again missing analyst estimates. Revenue did rise 2% to $25.5 billion after falling in Q1. Tesla relied on $890 million in regulatory credit, a massive increase vs. Q1 and a year earlier.

Gross margins fell to 17.4% vs. 17.6% in Q4 and 19.3% a year earlier.

Q3 earnings are due Oct. 16.

Analysts, who have been slashing Tesla estimates since the end of 2022, now see 2024 EPS sliding 28% to $2.24 a share after skidding 23% to $3.12 in 2023.

BYD Earnings

BYD's Q2 earnings rose 32% to 43 cents a share, in line with views. Sales jumped 26% to $24.2 billion, but missed forecasts. Both improved from Q1's pace.

Gross margins fell to 18.7% from Q1's record 21.9%, but are still relatively high. BYD Auto margins are still well above 20%.

R&D and capital spending costs continue to climb rapidly.



Tesla stock is up 4.8% so far in 2024 as of Sept. 27, according to MarketSmith analysis.

After the Q2 earnings miss and Musk pushing back timelines, TSLA stock wiped out a huge 42% run.

But shares have rebounded strongly from Aug. 5 lows, forging a new base with a 271 buy point.

TSLA stock raced past an early entry and now are closing in on a breakout.

The upcoming Q3 deliveries, robotaxi event and Q3 earnings mean investor can expect big moves for TSLA stock.

BYD Stock Technicals

BYD stock is up 27.9% in 2024 through Sept. 27.

Shares broke out of a cup-with-handle base on Aug. 30, clearing the 30 buy point.

With China announcing several stimulus measures, BYD surged with other Chinese stocks.

On Sept. 24, shares cleared a 32 buy point from a too-low handle in a massive cup base, but is already extended from that. It's now nearing the official 36.27 buy point.

BYD, listed in Hong Kong and Shenzhen, trades over the counter in the U.S. Its U.S. shares often have mini-gaps as well as opening trade mini-spikes or tumbles before settling down.

Tesla Vs. BYD Market Cap
Tesla stock has a market cap of $832.1 billion as of Sept. 27. It's far above BYD's $96.6 billion.

Tesla Stock Vs. BYD Stock
BYD sells far more EVs than Tesla, though the latter still leads in BEVs. More broadly, BYD in many ways is the EV maker Tesla has claimed or aspired to be. BYD makes its own batteries and chips, and sells those batteries to third parties such as Tesla. Musk has talked about making a $25,000 Tesla; BYD makes EVs profitably at far below $25,000.

The Tesla Cybertruck is relatively new, but shipments are still low. Musk has said the vehicle would be a financial drain in 2024. It's unclear if yet-unseen upcoming "affordable" variants of aging vehicles will have a meaningful impact.

BYD has entered most of the world outside of the U.S. Its model lineup continues to expand dramatically, with big moves upscale and adding tech to its more-affordable offerings.

BYD's broad lineup and next-generation hybrid system means it's reaping the benefits of a global shift toward PHEVs over BEVs.

Tesla stock is racing higher toward a buy point. BYD has surged past multiple buy points and eyeing a long-term entry.

Keep your eyes on BYD and Tesla, as well as Tesla stock vs. BYD stock.