BYD Closes in on Tesla: Rivals Clash in Global EV Market with Surging Sales and Strategic Expansions

Competition in the electric vehicle market has intensified between Chinese and American leaders. On August 29th, BYD (002594.SZ) disclosed its half-year report, revealing a second-quarter revenue of CNY 176.2 billion, close to Tesla's USD 25.5 billion (equivalent to CNY 181 billion based on the second-quarter average exchange rate of 7.21).
BYD achieved nearly 1 million unit sales in the second quarter, whereas Tesla only managed about 450,000 units.
Currently, BYD's market capitalization sits at CNY 725.6 billion, just one-seventh of Tesla's USD 684 billion. Both companies have similar gross profit margins, with BYD at 18.69% and Tesla at 18%. In terms of net profit attributable to shareholders, BYD posted CNY 9.062 billion, edging closer to Tesla's USD 1.478 billion.
The accelerating overseas expansion of BYD continues to fuel its growth, while Tesla faces a decline in sales.
In 2024's more competitive market environment, BYD has ramped up its efforts, further closing the revenue gap with Tesla.
Market analysts note that BYD's second-quarter revenue grew by 25.9% year-on-year to CNY 176.18 billion, with a net profit increase of 32.8% year-on-year, reaching CNY 9.062 billion. The company sold 987,000 units in Q2, reflecting a 40.2% year-on-year increase, though single-car revenue dropped by 13.2%.
Experts predict BYD’s high-end models launching in the latter half of 2024 could drive up the average vehicle price. Continual overseas market expansion, including new plants in Thailand and upcoming ones in Brazil, Turkey, and Hungary, is expected to boost market share.
Tesla reported Q2 revenue of USD 25.5 billion, a 2% increase year-on-year, but its net profit decreased by 42.8% to USD 1.494 billion. The company's global vehicle sales were 444,000 units, a 4.8% drop year-on-year.
Elon Musk announced plans to seek regulatory approval for supervised FSD in Europe and China by year-end, and hinted at a more affordable model slated for H1 2025 delivery. This, along with the delayed Robotaxi, could have significant implications for future sales and innovations.
BYD's competitive pricing and robust supply chain integration highlight its cost advantages. As the competition heats up, BYD’s market strategy and expansion will be critical in maintaining its momentum against Tesla.
BYD's market risks include evolving government policies and fluctuating raw material prices, whereas Tesla’s profitability has been impacted by AI project investments and reduced vehicle prices.
The valuation gap between BYD and Tesla is wide, with BYD's P/E ratio at 22x versus Tesla's 60x. Factors like regional risk preferences and BYD's focus on high-volume, cost-effective models contribute to this disparity. Meanwhile, notable investors express mixed sentiments about both companies' future performances and strategic directions.
Both companies are being closely watched as they navigate the complexities of global market expansion and technological advancements, pursuing dominance in the rapidly evolving electric vehicle landscape.