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BYD’s Q1 Surge: Why Its Earnings Could Outpace Tesla’s Struggles in 2025

Oliver BlakeThursday, Apr 24, 2025 9:00 pm ET
28min read

BYD’s first-quarter earnings report has reignited debates about the future of the electric vehicle (EV) market. While Tesla continues to grapple with geopolitical headwinds, brand perception issues, and margin pressures, BYD is surging ahead—both in sales and investor confidence. Here’s why BYD’s Q1 performance could fuel its stock to outperform Tesla’s in 2025.

Key Performance Metrics: BYD’s Growth vs. Tesla’s Slump

BYD’s Q1 2025 results were a masterclass in execution. The company sold 416,388 battery electric vehicles (BEVs), outpacing Tesla’s 336,681 deliveries—a gap that’s widening. BYD’s stock has surged 90% annually and 30% in early 2025, while Tesla’s shares have dipped 12.8% year-to-date (YTD).

Why the divergence?
- Technology Leadership: BYD’s 1,000-kW ultra-fast charging system delivers 400 km of range in just 5 minutes—far surpassing Tesla’s Supercharger standard of 275 km in 10 minutes.
- Cost Efficiency: BYD’s vertically integrated supply chain (batteries, semiconductors, and components) allows it to undercut Tesla’s pricing. For example, BYD’s Song Plus SUV starts at $18,500, while Tesla’s Model 3 now sells for $38,000+ after price cuts.
- Global Expansion: BYD’s overseas sales doubled in Q1 2025, targeting 800,000 units by year-end. Meanwhile, Tesla’s deliveries fell 13% Y/Y as geopolitical tensions and production delays for the new Model Y hurt demand.

Profitability: BYD’s Margin Strength vs. Tesla’s Margin Collapse

BYD’s net income is projected to jump 107–143% in Q1 2025, reaching RMB 8.5–10 billion ($1.16–$1.37 billion)—a stark contrast to Tesla’s struggles.

Tesla’s Q1 results were bleak:
- Revenue fell 9% annually to $19.3 billion, missing estimates by $2 billion.
- EPS dropped 40% Y/Y to $0.27, driven by lower automotive margins (12.5% excluding credits) and tariffs.
- Operating margin collapsed to 2.1%, perilously close to breakeven.

Tesla’s problems stem from geopolitical risks, such as U.S. tariffs (now 247.5% on Chinese-made EVs) and Musk’s controversial political affiliations, which have alienated European markets. BYD, by contrast, benefits from strong ties to China’s EV subsidies and domestic demand, which accounts for 80% of its sales.

Investor Sentiment: Bulls on BYD, Bears on Tesla

Analysts are overwhelmingly bullish on BYD, with a “Strong Buy” consensus and a 13.6% upside from its April 2025 price. Investors are betting on its 15.7% global BEV market share target for 2025 and its upcoming premium Denza line (e.g., the Denza N9 SUV starting at $53k), which targets luxury buyers.

Tesla’s stock, however, faces skepticism:
- Jim Cramer removed it from his “Magnificent Seven” list, citing tariff fallout and declining dominance.
- Analysts at Wedbush called its Q1 results a “disaster on every metric”, citing margin erosion and Musk’s distractions.

Even Tesla’s April 22 earnings call—which highlighted plans for Austin robotaxis by June and 1 million Optimus robots by 2030—couldn’t fully offset concerns about execution risks and margin pressures.

Risks and Challenges Ahead

While BYD’s path looks clear, it’s not without hurdles:
- Trade Barriers: U.S. tariffs and EU scrutiny of its Hungarian factory could limit growth in key markets.
- Luxury Ambitions: The Denza brand’s success hinges on BYD’s ability to compete with established luxury automakers.

Tesla’s risks are more existential:
- Tariffs and Supply Chains: U.S. tariffs on Chinese-sourced battery cells and Mexico-made components could add $2,000+ per vehicle in costs.
- Brand Damage: Protests and vandalism targeting Tesla vehicles in Europe and the U.S. continue to erode its premium image.

Conclusion: BYD’s Lead Is Here to Stay

BYD’s Q1 results underscore its strategic dominance in the EV market. With superior sales growth, technological edge, and cost efficiency, it’s positioned to claim the global BEV crown by year-end. Counterpoint Research’s forecast of 15.7% market share by 2025 is within reach, while Tesla’s 2025 delivery guidance remains withdrawn due to uncertainty.

Investors should note:
- BYD’s stock has a 26.4% upside target (average analyst estimate) versus Tesla’s 12.8% YTD decline.
- BYD’s “God’s Eye” autonomous system and ultra-fast charging tech directly challenge Tesla’s FSD and Supercharger network.
- Tesla’s reliance on Musk’s vision for robotaxis and AI remains unproven, while BYD’s execution is already driving results.

In short, BYD’s Q1 surge isn’t just a blip—it’s a signal that the EV market’s center of gravity is shifting east. For investors, betting on BYD’s growth trajectory and Tesla’s turnaround risks means choosing between certainty and hope. The data so far? Certainty is winning.

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