Summary
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. But Tesla's first-quarter deliveries came in far below even the most bearish estimates. Tesla delivered 386,810 vehicles in Q1, far below even the most optimistic views. That was down sharply from Q4 2023's record 484,507 EVs and off 8.5% vs. a year earlier. The U.S. market is expected to be the biggest contributor to Tesla's profits. In March, Tesla sold 626,000 vehicles, including 302,000 BEVs. That was down from 944,000 in the same period last year. The company has been struggling with sales of its new Model 3 sedan. The new model is expected to go on sale later this year. In the U.S. and Europe, Tesla has raised the price of its Model Y sedan to $35,000. The company has also increased the price for the Model S by $2,000 to $33,000, and for the X by $1,000 at $28,000 each. Germany abruptly ended EV subsidies of 4,5000 euros as of Dec. 17. France ended subsidies for EVs made outside of Europe as of December 15. The updated Model 3 is now available in the U.S. market, with only RWD and LR variants for now. The new Tesla Model Y starts at $60,000. The first models will go on sale in 2020. The Model Y is expected to go on the road in 2023. The Tesla Semi-Truck goes on sale for $100,000 to $200,000 in the U.S. Tesla has teased a next-generation EV, but hasn't even shown images. It was originally set to be built at a Mexico plant, but Elon Musk said the $25,000 EV was on hold. Musk wrote on his social site X that Reuters was "lying," but didn't elaborate. Tesla's European sales weakened as 2023 wore on, a problem that has continued with the loss of key subsidies there. Outside the U.S., a cheap Tesla already would face a slew of competition, especially from BYD. It's already building an EV factory in Thailand, set to begin production in the third quarter. BYD has announced plans to build plants in Hungary and Indonesia. It has a joint venture assembly plant in Uzbekistan that should begin production in Q3. The company has signaled it could announce plans for a Mexico plant later this year. The Mexico production reportedly would not target the U.S. market. With hybrids coming back in favor with the industry, BYD is selling more PHEVs to start 2024. A more-advanced hybrid system this year could further fuel BYD PHEV sales later this year. The event is taking place in Mexico. With China's severe restrictions on pickups, this BYDPHEV has been designed with overseas markets the priority. Tesla is working on 4680 batteries, first touted at the 2020 Battery Day. The larger form factor offers the potential for various benefits and cost savings. Tesla's 4680 production has picked up in recent months, but is still relatively low. It's also not clear if some of the battery benefits are coming to fruition. The Tesla Model Y is the latest in a series of high-performance electric vehicles. The Model Y has been in production for more than a decade. It's the first of its kind to be available to the public. The next step is to make it more affordable. Tesla has struck deals with Ford, GM, Rivian and others to give those automakers' EV customers access to Superchargers in the U.S. They'll also adopt Tesla's charger standard soon. BYD also teamed up with South Korea's LG for storage in North America and Europe. The Tesla Model S and Model X have been given a new version of the FSD system. The new version is called Model S/X/FSD. The old version of FSD was called Model X/F SD. The latest version of Model S is called the Model X. Tesla earnings plunged 40% to 71 cents a share while revenue grew just 3.5% to $25.2 billion. Level 2 systems, many with Lidar, are increasingly common in China, especially in premium models. BYD Electronics accounts for an increasingly smaller share of overall revenue. Auto gross margins ex regulatory credits rose, slightly beating forecasts. Analysts, who have been slashing Tesla estimates since the end of 2022, now see 2024 EPS sliding 15% to $2.66. If a small EV is pushed back significantly, Wall Street may be more aggressive about cutting profit estimates for 2026 and beyond. Recent big price cuts and discounts will be offset to a large extent due to lower battery costs and other savings, but will likely continue to pressure margins in 2024.BYD will likely release preliminary Q1 results in late April. Shares briefly rallied after Musk announced the robotaxi event late on April 5, but then sold off on concerns that Tesla will not see growth for several years. The EV giant hit a 52-week high of 36.27 on July 31, but trended lower amid concerns that the China EV price war would hit sales and profits. Berkshire Hathaway has been a longtime major investor in BYD, but has halved its stake. Tesla Stock Vs. BYD Stock: BYD sells far more EVs than Tesla, though the latter has regained the "BEV" title, at least for now. Much of Tesla's valuation is based on hopes that Musk will achieve breakthroughs in self-driving, robotics and AI. Tesla has begun Cybertruck deliveries, but significant shipments won't occur for several months. A next-generation vehicle may not arrive for many years. Tesla profits tumbled in 2023, though it cooled late last year. BYD profits tailed off in 2022.