Tag: BYD Company Limited (BYDDY)

Tesla Falls Short on Q3 Deliveries: What It Means for EV Stocks

Posted on by The INO.com Team

Tesla, Inc. (TSLA) reported its third-quarter delivery numbers on October 2, falling short of what some analysts were expecting, causing the stock to drop over 6%. The EV maker delivered 462,890 vehicles between July and September, up 6.4% year-over-year. While this number marginally beat the average estimate of 462,000 vehicles, it didn’t quite meet higher expectations from Barclays and UBS, which had forecasted 470,000.

Tesla’s Q3 numbers were also ahead of the 435,059 vehicles delivered in the same period last year and slightly better than Q2’s total of 443,956 deliveries. Of the 462,890 deliveries, 439,975 were for Tesla’s popular Model 3 and Model Y vehicles, while the remaining 22,915 included the Model S, Model X, and Cybertruck.

Even though Tesla’s Q3 deliveries improved year over year and were better than the second quarter’s 443,956, the results still left some investors concerned. Tesla's share price dropped by around 4% shortly after the market opened on the day of the release of the delivery data.  

Moreover, it raises concerns about Tesla’s ability to maintain its rapid growth, especially as competition intensifies in the EV space. For Tesla to avoid its first-ever annual decline in deliveries, it will need to achieve a record-breaking 516,344 deliveries in the fourth quarter.

Speaking of competition, Tesla isn’t alone in the race for EV dominance. Rivals like Li Auto Inc. (LI), XPeng Inc. (XPEV), NIO Inc. (NIO), and BYD Company Limited (BYDDY) also reported record-breaking deliveries in September.

LI, for instance, hit a record of 53,709 deliveries, up 48.9% year-over-year, while XPEV’s EV figures surged by over 52% from August and 39.5% year-over-year. BYD, Tesla’s biggest competitor in the global EV market, delivered 443,426 battery-electric vehicles in the third quarter, putting them just behind Tesla in quarterly numbers. Meanwhile, NIO reported a 7.8% quarter-over-quarter rise with 61,855 EV deliveries.

What’s Next for Tesla?

Tesla has a busy October ahead. The company’s third-quarter earnings report is due on October 23, and investors are particularly eager to see how Tesla’s profit margins are holding up. Meanwhile, the carmaker’s upcoming Robotaxi event on October 10 has drawn significant attention as the company is expected to share updates on its full self-driving technology, AI, and autonomous driving advancements. Analysts from Wedbush and Deutsche Bank have flagged the event as a potential catalyst for Tesla stock, which has already surged 20% over the past month. Both firms maintain buy ratings, with price targets of $300 and $295, respectively.

Despite the shortfall in Q3 deliveries, TSLA continues to innovate and expand its footprint in the EV and autonomous driving markets. Its solid position in China, along with continuous improvements in AI, could provide the momentum needed to meet future targets. Thus, adding this stock to your portfolio could be profitable.

However, investors concerned about Tesla’s near-term outlook could keep an eye on potentially strong companies like  Rivian Automotive, Inc. (RIVN) and Lucid Group, Inc. (LCID) as alternatives. Let’s look at their fundamentals in detail:

Stocks to Hold:

Rivian Automotive, Inc. (RIVN)

Rivian has had a tough time in 2024, especially as an EV maker still working toward profitability in a challenging market. Even though its stock has recovered from April lows, it remains down nearly 55% year-to-date. However, there’s optimism as the company outperformed Wall Street’s top- and bottom-line expectations in the second quarter, reflecting its cost-cutting progress.

On August 6, RIVN reported a loss of $1.46 per share, which came in above analysts’ expectations, who had predicted a loss of $1.19 per share. Its revenue for the quarter came in at $1.16 billion (up 3.3% year-over-year), slightly surpassing analyst expectations of $1.15 billion. The company also earned $17 million in revenue from regulatory credits.

Although it posted a net loss of $1.46 billion for the quarter, RIVN’s cash position remains strong. The company ended the quarter with $7.87 billion in cash and investments, bolstered by a $1 billion unsecured convertible note from Volkswagen. Moreover, the company completed a retooling upgrade at its Normal, Illinois plant, producing 9,612 vehicles and delivering 13,790 units.

For 2024, Rivian has set a production target of 57,000 vehicles, incorporating necessary downtime for further upgrades and cost reductions. It aims for a 30% improvement in production line rate and a 20% reduction in material costs compared to its previous platform, reflecting its efforts to enhance efficiency and reduce expenses.

The company has also revamped its R1 pickup and SUV models with slight competitive price increases. These updates are expected to boost revenues and help Rivian achieve its goal of turning a profit on each vehicle by the end of the year. Overall, while Rivian continues to face challenges, its strategic initiatives and strong cash position provide a foundation for potential future growth.

Lucid Group, Inc. (LCID)

Luxury electric vehicle maker Lucid has recently gained attention after exceeding expectations in the second quarter and achieving a new delivery record. Over the past three months, LCID shares have gained more than 20%. The company delivered 2,394 vehicles in the quarter ended June 30, marking a solid 70.5% increase compared to the same period last year and a 22% rise from the first quarter. This performance beat analysts’ predictions of 1,889 vehicles, following a record-setting 1,967 deliveries in the first quarter.

Meanwhile, production is also on the rise, with the company building 2,110 EVs after its production dropped 27% year-over-year in the first quarter. Though production remains below its previous highs, the improvement signals a positive recovery for the company. Having produced 3,837 vehicles through the first half of 2024, Lucid aims to reach its target of 9,000 vehicles for the year, which would require 5,163 more units in the second half.

As Lucid’s production and deliveries rebound, the company reported a second-quarter revenue of $200.58 million, exceeding Wall Street’s forecast of $192.65 million. However, the company had an adjusted loss of $0.29 per share, slightly higher than the expected 26 cents. Nonetheless, the Ev maker ended the quarter with $4.28 billion in liquidity and even secured a $1.5 billion commitment from Ayar Third Investment Co, a partner of Saudi Arabia’s Public Investment Fund. This funding provides Lucid with a financial cushion through at least the fourth quarter of 2025.

Commenting on this, CEO Peter Rawlinson said he’s “very encouraged” by the momentum Lucid is gaining, especially with the anticipated launch of its first electric SUV, the Gravity, later this year. This new model is expected to help the company maintain its positive trajectory as it moves into the second half of 2024. With that in mind, investors could consider adding this stock to their watchlist.

BYD Partners with HUBC: A Strategic Move or Risky Bet?

Posted on by The INO.com Team

The China-Pakistan Economic Corridor (CPEC) has been a major project under China’s Belt and Road Initiative (BRI), channeling billions of dollars into Pakistan’s infrastructure, especially its power sector. Over the past decade, these investments have resulted in the installation of numerous power plants, raising Pakistan’s total power capacity to a significant 42,000 MW.

However, Pakistan’s economic slowdown has kept power usage far below this level, often only reaching around 20,000 MW. This mismatch means the country is stuck paying for all that unused capacity, straining its finances.

Recently, Finance Minister Aurangzeb managed to renegotiate some of the hefty debts owed to Chinese power companies, providing short-term relief. Still, the core issue of overcapacity remains unresolved, leaving Pakistan with a tricky financial balancing act.

BYD’s Entry: A New Chapter in Pakistan-China Relations?

As the country grapples with its energy dilemma, China seems to seize an opportunity to further expand its economic influence. BYD Company Limited (BYDDY), a global leader in electric vehicles (EVs), is set to launch its vehicles in Pakistan, marking a significant milestone in the country’s automotive industry. That isn’t just about introducing new cars; it's a strategic move to use Pakistan’s surplus energy capacity.

BYDDY is teaming up with Hub Power Company Limited (HUBC) for its launch in Pakistan. HUBC (through its subsidiary Mega Motors Limited) has a solid history of collaborating with Chinese companies on power projects, including partnerships with China Power Hub Generation Company and China National Machinery Industry Corp (Sinomach). The details on whether BYD will build an assembly or manufacturing plant are still under wraps, but China's extensive involvement in Pakistan’s power sector means energy won't be a stumbling block.

The Chinese EV giant recently unveiled its plans to expand its operations in Pakistan. The company is set to launch its own car production facility in the country, marking a major step as the first significant player in the electric vehicle sector to enter the Pakistani market. Partnering with Mega Motors, BYDDY will introduce three of its models, including two SUVs and a sedan, starting in the fourth quarter of 2024.

The company also revealed that it will open three flagship stores in major cities like Karachi, Lahore, and Islamabad. While Pakistan currently lacks a robust EV charging infrastructure, BYD’s move includes plans for Hubco to establish fast-charging stations across major cities, motorways, and highways when the new assembly plant opens in 2026.

Hubco’s CEO, Kamran Kamal, hailed this venture as a “landmark investment,” emphasizing its role in boosting Pakistan’s green transportation options.

This strategic entry not only addresses the country's air pollution and greenhouse gas emissions but also promises to offer cleaner, more efficient alternatives to traditional gasoline and diesel vehicles. With BYD’s innovative EVs hitting the market, Pakistan is poised for a significant shift towards sustainable transportation.

Bottom Line

BYD’s partnership with HUBC and its entry into the Pakistani market is a bold strategic move underpinned by China’s extensive investments in Pakistan’s power sector. This collaboration aims to capitalize on Pakistan’s excess energy capacity and introduce a new wave of electric vehicles to a market ripe for innovation. On the surface, it appears to be a well-calculated move to drive industrial growth and enhance economic activity in Pakistan.

However, the venture is not without its risks. The increased dependency on Chinese investments could deepen Pakistan’s financial obligations and impact its economic sovereignty. As BYD rolls out its vehicles and infrastructure projects, the real challenge will be balancing the potential economic boost against the risks of heightened dependency and financial strain. Whether this partnership will ultimately prove to be a shrewd strategic play or a precarious gamble remains to be seen.

Tesla vs. BYD: The Battle for Global EV Dominance in Ride-Hailing

Posted on by The INO.com Team

In 1995, while Elon Musk was kicking off his first venture in Silicon Valley, another entrepreneur, Wang Chuanfu, was starting his own journey in Shenzhen with BYD, making batteries for Motorola. It’s wild to think that nearly three decades later, Musk and Wang would be leading two of the biggest names in electric vehicles, caught in a geopolitical tug-of-war that’s all about manufacturing, energy, tech, and tariffs.

The rivalry between Tesla, Inc. (TSLA) and BYD Company Limited (BYDDY) isn’t as clear-cut as it seems. Despite being on opposite sides of a geopolitical divide, their businesses are deeply intertwined. Tesla’s second-largest market and biggest factory are in China, with significant investment from billionaires like He Xiaopeng. On the flip side, BYD’s largest external shareholders are American giants like Berkshire Hathaway and Blackrock, and it even supplied the largest-ever order for electric buses in the U.S. Plus, BYD sells batteries to Tesla.

These examples illustrate the difficulty of 'de-risking' between two deeply intertwined economies and determining who is 'winning' at any given moment. One thing’s for sure, though: both Wang and Musk remain optimistic about the future.

Tesla vs. BYD: The Competition Is Hot on Its Heels

While TSLA enjoys a near-mythical status among EV enthusiasts, BYD is rapidly closing the gap. In the last quarter, Tesla delivered 443,956 all-electric cars, 5% less than a year ago but 14.8% more than the previous quarter. Meanwhile, BYD’s sales volume surged 28.8% in July compared to the previous year, reaching 342,383 vehicles. In the first quarter, BYD was only 18,000 cars short of Tesla’s deliveries from April to June 2024, indicating how close this race is getting.

TSLA’s total revenues for the second quarter ended June 30, 2024, increased 2.2% from the previous year to $25.50 billion, showcasing its continued growth and success. However, BYD’s strong performance, with a 4% year-over-year increase in operating revenue, indicates a shifting landscape in the EV market, with BYD poised to challenge Tesla’s long-standing dominance.

On the bottom line, TSLA’s non-GAAP net income and EPS for the second quarter declined by 45% and 43% year-over-year to $1.81 billion and $0.52, respectively. In contrast, BYDDY’s attributable net profit for the March quarter grew 10.6% from the prior year to RMB4.57 billion ($640.82 million). Moreover, its EPS stood at RMB1.57, up 10.5% year-over-year.

Despite Tesla’s recent decline in profits, it has maintained its leadership position in EV deliveries, thanks to its significant advantage over other manufacturers in previous years. But with BYD closing in, the competition in the EV market is only getting hotter.

Tesla Has a Massive Leg Up on Its Competitors

Tesla is building EVs cheaper than anyone else, and it's giving Elon Musk's company an edge even with increasing competition. According to Bank of America, Tesla spends less than $30,000 on components per vehicle. This is $17,000 cheaper than other EV makers and about $10,000 below the industry average. Despite shrinking margins and slowing sales, these lower costs keep Tesla ahead of traditional automakers like Ford Motor Company (F) and General Motors Company (GM), who still rely on profits from gas-powered cars and haven't yet made a profit on their EVs.

High input costs lead to higher consumer prices, making it challenging for TSLA’s competitors to compete in a price-sensitive market. To make its cars even more affordable, the company offered attractive financing options in Q2, helping to offset high interest rates.

Elon Musk has big plans to compete with Uber Technologies, Inc. (UBER) through Tesla's autonomous (self-driving) robotaxis dubbed ‘Cybercab’. Musk is heavily investing in this technology and aims to release a more advanced, steering-wheel-free model possibly this fall. He envisions Tesla owners renting out their cars as self-driving taxis, similar to Airbnb, Inc. (ABNB), which could pose a severe challenge to ride-sharing giants like Uber and Lyft.

The idea is that Tesla owners can earn extra income by letting their cars operate as robotaxis during their off hours, with Tesla taking a cut of the profits. Musk even predicts that each participating Tesla could generate around $30,000 in gross earnings annually for its owner.

In a recent earnings call, Musk mentioned significant progress in full self-driving technology, with version 12.5 showing notable improvements. He also announced a slight delay in the Robotaxi product reveal, now scheduled for October 10th, to allow for essential updates and enhancements. Additionally, Tesla is ramping up production in its U.S. factory and building a new Megapack factory in China, potentially tripling its output.

BYD Joins Forces With Uber to Close the Gap With Tesla

BYD, Tesla's biggest competitor, has just struck a major deal with UBER. The deal aims to bring 100,000 BYD electric vehicles (EVs) to Uber’s global fleet, starting in Europe and Latin America before expanding to other regions. To encourage drivers to switch to EVs, both companies would offer incentives like discounts on maintenance, charging, financing, and leasing.

This move comes as global EV sales slow and Chinese automakers face higher import tariffs. The collaboration aims to lower the total cost of EV ownership for Uber drivers, boosting EV adoption on Uber’s platform and providing greener rides for millions of users.

BYD is also working on integrating its self-driving technology into Uber’s platform. With $14 billion invested in smart cars, BYD is developing a “Navigate on Autopilot” feature similar to Tesla’s “Autopilot,” which could potentially make BYD-Uber autonomous vehicles direct competitors to Tesla’s robotaxis.

BYD is expanding its production facilities outside China in response to increased tariffs on Chinese-made EVs. The company has recently secured a $1 billion deal to build a new manufacturing plant in Turkey, which will produce up to 150,000 vehicles annually and create around 5,000 jobs by 2026. They’ve also opened an EV plant in Thailand, with similar production capacity and expected to generate 10,000 jobs. Additionally, BYD plans to establish a passenger car factory in Hungary and another in Mexico.

Given these strategic diversifications and a focus on innovation, BYD has transformed into a global EV powerhouse. The company’s hefty investments in expanding its production capacity and approach to vertical integration have further solidified its competitive edge in the EV market​​.

Bottom Line

BYD’s strategic focus on electric and hybrid vehicles, along with its tech innovations and global expansion, makes it a serious contender against Tesla. As the EV market evolves, the competition between BYDDY and TSLA is expected to intensify, with both companies pushing hard to lead the charge and grab a bigger slice of the global market. The battle for EV dominance is far from over, and it would be interesting to see how these two giants move forward will shape the future of electric mobility.

Chinese EV Companies: Top Leaders in the Global Shift to Electric Vehicles

Posted on by The INO.com Team

In the rapidly evolving landscape of electric vehicles (EVs), Chinese manufacturers are emerging as dominant players, reshaping global markets traditionally led by Western automakers. As the U.S. and Europe impose tariffs and trade barriers, China’s EV upstarts are strategically expanding into developing markets, including Brazil, Mexico, and Southeast Asia.

In May, the Biden administration announced plans to slap new tariffs on Chinese EVs, advanced batteries, and other goods intended to protect U.S. manufacturers. Moreover, the European Commission (EU) will impose extra duties of up to 38.1% on imported Chinese electric cars starting in July, raising concerns about possible retaliation from Beijing.

According to data compiled by technology intelligence firm ABI Research for Business Insider, Chinese automakers have already established significant dominance in several emerging markets. In Brazil, China’s carmakers captured around 88% of the EV market, while in Thailand, they held a 70% share during the first quarter.

Despite their current small size, the EV markets in most of these countries are experiencing rapid growth.

Chinese EV companies such as BYD Company Limited (BYDDY), NIO Inc. (NIO), and XPeng Inc. (XPEV) are at the forefront of this transformation, leveraging technological prowess and strategic market expansions to solidify their positions worldwide.

BYD Company Limited (BYDDY)

With a $95.78 billion market cap, BYD Company Limited (BYDDY) is one of China’s leading automobile manufacturers that engages in new EVs and power batteries internationally. The company operates in two segments: Mobile Handset Components, Assembly Service and Other Products; and Automobiles and Related Products and Other Products.

BYDDY’s strategic approach combines technological leadership, market diversification, and strategic partnerships and investments to solidify its position as a frontrunner in the global EV industry. The company has expanded its footprint in regions, including Brazil, Mexico, Australia, and Southeast Asia, capitalizing on growing world demand for EVs.

According to ABI Research figures, BYD accounted for about 71% of EV sales in Brazil and 45% in Thailand in the first quarter.

On May 16, BYD launched its first pickup truck, BYD SHARK, in Mexico. BYD SHARK is positioned as a new energy-intelligent luxury pickup featuring the DMO Super Hybrid Off-road Platform. This model represents the latest addition to BYD's product range, tailored for global markets, marking the company’s first global product launch outside China.

Stella Li, Executive Vice President of BYD and CEO of BYD Americas, said, “With the introduction of our inaugural new energy pickup, BYD SHARK, we’re poised to redefine the conventional fuel pickup landscape through advanced technology, providing users with a lifestyle characterized by boundless opportunities. BYD is now ushering in the era of the global new energy pickup.”

Also, in March, BYDDY launched its third electric car, Seal, a premium electric sedan with a price starting at around $49,458, in India’s booming EV market. In 2023, the company sold 1,877 cars in India, an increase of 314% year-over-year.

Notably, in the same month, BYD Company became the world’s first automaker to roll off its seven millionth new energy vehicle, the DENZA N7, which was introduced at its Jinan factory in China, underscoring another groundbreaking accomplishment for the brand.

For the first quarter that ended March 31, 2024, BYDDY’s operating revenue increased 4% year-over-year to RMB124.94 billion ($17.20 billion). Net profit attributable to shareholders of the listed company rose 10.6% from the year-ago value to RMB4.57 billion ($629.28 million). Its earnings per share came in at RMB1.57, up 10.6% from the previous year’s quarter.

Analysts expect BYDDY’s revenue and EPS for the fiscal year (ending December 2024) to increase 25.7% and 15.9% year-over-year to $104.92 billion and $3.14, respectively. For the fiscal year 2025, the company’s revenue and EPS are expected to grow 13.3% and 9.2% from the prior year to $118.86 billion and $3.43, respectively.

BYDDY’s stock is up nearly 14% over the past month and has gained more than 11% year-to-date.

NIO Inc. (NIO)

With a $9.27 billion market cap, NIO Inc. (NIO) has gained prominence for its focus on high-performance, smart EVs and innovative battery-swapping technology. Based in Shanghai, China, the company provides five and six-seater electric SUVs, as well as smart electric sedans. It also offers power solutions, including Power Home, Power Swap, Power Charger and Destination Charger, Power Mobile, Power Map, and more.

Besides its solid presence in China, NIO has established footholds in global markets such as Southeast Asia, Latin America, and Europe, aiming to capitalize on the growing demand for luxury EVs. Moreover, NIO plans to expand to the Middle East in 2024, CEO William Li stated on an earnings call, adding that deliveries of its lowest-priced brand will begin in the first half of the following year.

On April 8, NIO officially inaugurated its Smart Driving Technology Center in Schönefeld near Berlin. It is the first center outside China, underscoring the company's expanding international footprint.

NIO delivered 20,544 vehicles in May, indicating a substantial increase of 233.8% year-over-year. The deliveries comprised 12,164 premium smart electric SUVs and 8,380 premium smart electric sedans. Also, in April, the company delivered 15,620 vehicles. As of May 31, 2024, cumulative deliveries of NIO vehicles reached a staggering 515,811.

“Despite the intensifying market competition, NIO’s premium brand positioning, industry-leading technologies, and innovative ‘chargeable, swappable, upgradeable’ power experience have been recognized for their exceptional competitiveness, leading to solid sequential growth in vehicle deliveries in recent months,” said William Bin Li, chairman and CEO of NIO.

“In April 2024, we launched the 2024 ET7 Executive Edition, featuring 180 upgrades tailored to the needs of business travelers and professionals, further enhancing our competitiveness in the premium sedan market. In addition, with a commitment to create better family life, our new smart electric vehicle brand, ONVO, along with its inaugural product L60, was unveiled in May 2024,” he added.

Further, NIO extended its strategic cooperation on battery swapping by collaborating with GAC Group and FAW Group. These add to NIO’s existing network of strategic alliances with Changan Automobile, Geely Group, JAC Group, Chery Automobile, and Lotus Technology. NIO remains dedicated to advancing its evolving battery-swapping ecosystem, aiming to deliver efficient and convenient recharging solutions for its customers.

During the first quarter that ended March 31, 2024, NIO reported vehicle sales of $1.16 billion, and its total revenues were $1.37 billion. Its gross profit grew 200.5% from the prior year’s quarter to $67.60 million. As of March 31, 2024, the company’s cash and cash equivalents, restricted cash, short-term investment and long-term time deposits stood at $6.30 billion.

Analysts expect NIO’s revenue for the fiscal year (ending December 2024) to increase 21.4% year-over-year to $9.38 billion. Likewise, the company’s revenue for the fiscal year 2025 is anticipated to grow 43.7% year-over-year to $13.48 billion. Also, NIO’s stock has surged approximately 2% over the past five days.

XPeng Inc. (XPEV)

With a $7.48 billion market capitalization, XPeng Inc. (XPEV) designs, develops, and markets Smart EVs in China that appeals to the large, growing base of tech-savvy consumers. It provides SUVs under the G3, G3i, and G9 names; four-door sports sedans under the P7 and P7i names; and family sedans under the P5 name.

XPeng’s competitive pricing appeals to budget-conscious consumers without compromising quality or innovation. The company has expanded its operations into Europe and Southeast Asia, leveraging local partnerships and market insights to adapt its offerings to regional preferences.

XPEV delivered 10,146 Smart EVs in May, an increase of 35% year-over-year and 8% over the previous month. The XPENG X9 notably achieved monthly deliveries of 1,625 units, reaching a cumulative total of 11,456 units. Since its launch, it has continuously led sales in both the all-electric MPV and three-row model segments in China. XPENG has delivered 41,360 Smart EVs year-to-date, marking a 26% rise year-over-year.

On May 20, XPEV launched XOS 5.1.0, Tianji, the industry’s first AI-powered in-car OS. It features end-to-end large model technology, promoting the smart driving experience for XPENG car owners. The company will offer intelligent and personalized in-car AI assistant services through AI assistant Xiao P, AI Chauffeur, and AI Bodyguard. The recent launch outlines XPeng’s new market positioning as the global pioneer and promoter of AI smart driving.

In the first quarter that ended March 31, 2024, XPEV’s total revenues increased 62.3% year-over-year to $910 million, and revenues from vehicle sales were $770 million, up 57.8% from the prior year’s quarter. The company’s gross margin was 12.9% for the first quarter, compared to 1.7% for the same period of 2023. As of March 31, 2024, its cash and cash equivalents, restricted cash, short-term investments and time deposits were $5.73 billion.

XPENG’s physical sales network reached 574 stores, covering about 178 cities as of March 31, 2024. Also, its self-operated charging station network had a total of 1,171 stations, including 359 XPENG S4 ultra-fast charging stations, at the end of the first quarter.

Xiaopeng He, Chairman and CEO of XPENG, further stated, “Through our strategic partnership with the Volkswagen Group, XPENG is at the forefront of monetizing in-house developed smart technologies as a technology enabler. Our industry-leading technologies are expected to gain greater market influence and yield better financial returns.”

Street expects XPEV’s revenue for the second quarter (ending June 2024) to increase 63.2% year-over-year to $1.13 billion. Similarly, the consensus revenue estimate for the fiscal year (ending December 2024) of $6.12 billion indicates an improvement of 43.6% year-over-year. Also, the company has topped the consensus revenue and EPS estimates in three of the trailing four quarters.

Shares of XPEV have surged more than 7% over the past five days.

Bottom Line

China’s EV newcomers seem to be strategizing for global dominance. They are expanding into developing markets, including Brazil, Mexico, Indonesia, Thailand, and India, amid tariff and trade barriers imposed by the U.S. and Europe.

Chinese manufacturers like BYDDY, NIO, and XPEV are leveraging their technological prowess and strategic market expansions to establish themselves as leaders in the global EV industry. These companies lead in cost-effective manufacturing and are at the forefront of advancements in battery technology, autonomous driving, and user-centric design.

With ambitious global expansion plans and a commitment to sustainability, these China-based EV giants are poised to reshape the automotive industry, setting new standards for electric mobility worldwide.

TSLA vs. BYDDY: The Battle for Electric Pickup Truck Supremacy

Posted on by The INO.com Team

China, the world's largest and fiercely competitive EV market, saw a 38% surge in sales of "new energy vehicles" last year, totaling 9.49 million units. This accounted for nearly 70% of global EV sales, raising concerns among traditional automakers and Tesla, Inc.'s (TSLA) Elon Musk about China's potential dominance.

Concurrently, BYD Company Limited (BYDDY), a Chinese EV giant, is set to unveil its first electrified pickup truck globally. Though details on powertrain, performance, and pricing remain undisclosed, BYDDY released images featuring an orange and blue camouflaged truck, signaling its entry into the new energy pickup segment.

Competing with TSLA's Cybertruck, Ford Motor Company's (F) Ranger and F-150 Lightning, and Toyota Motor Corporation's (TM) Hilux, the upcoming BYDDY pickup marks a new frontier in the electric pickup market.

That said, TSLA's Cybertruck, launched in November 2023, faces criticism for battery range discrepancies, premature breakdowns, and durability issues like rust and corrosion. Initially promised at $39,900 with a 500-mile range, TSLA's Cybertruck now starts at $60,900, with deliveries pushed to 2025 due to production constraints.

Musk has admitted challenges in production, forecasting a financially challenging first year. Moreover, with the Cybertruck as its latest passenger vehicle since 2020, TSLA's global expansion might stall, leaving markets outside North America waiting for new releases for years to come.

Financial Performance Comparison Between BYDDY and TSLA

In the final quarter of 2023, the Shenzhen-based carmaker saw a surge in net profit, surpassing TSLA to become the top seller of electric vehicles globally. Revenue soared by 49.8% year-over-year to ¥180.04 billion ($24.89 billion), with gross profit reaching ¥38.21 billion ($5.28 billion), a 78% increase year-over-year.

Additionally, BYDDY’s net income attributable to common stockholders reached ¥8.67 billion ($1.20 billion), up from ¥4.13 billion ($571.02 million) in the previous year's quarter. Sales volume spiked by 38%, with over 526,000 EVs sold, nearly 80,000 more than TSLA's sales.

BYDDY, for the second consecutive year, outpaced TSLA, producing 3 million new energy vehicles (NEVs) compared to Tesla's 1.84 million. BYDDY's cars, mostly priced lower than TSLA's, offer hybrid and fully electric options, posing a significant threat to competitors, as acknowledged by Musk.

In the fiscal fourth quarter of 2023, TSLA's total revenue increased 3% year-over-year to $25.17 billion. However, its gross profit declined 23.2% year-over-year to $4.44 billion. Its adjusted EBITDA decreased 26.9% from the year-ago value to $3.95 billion.

Moreover, the company’s non-GAAP net income and non-GAAP EPS attributable to common stockholders reduced 39.5% and 40.3% from the prior year's period to $2.49 billion and $0.71, respectively.

Musk now recognizes BYDDY's potential dominance in the EV market despite initial ridicule, foreseeing a scenario where they could outperform most other car companies globally. He said, "Frankly, if there are not trade barriers established, they will pretty much demolish most other car companies in the world."

The Two Industry Giants’ Business Prospects and Challenges

BYDDY, while absent from the U.S. market, reaches more than 50 countries, concentrating efforts in Asia, South America, Australia, and selected European nations such as Hungary. Plans to unveil new models, including the $233,000 Yangwang U9 electric supercar, complement refreshed models like the e2 and Seagull electric hatchbacks.

Last year's global sales saw notable NEV success across multiple nations. With over 242,000 units exported, BYDDY anticipates China's NEV market surge in 2024, reinforcing its multi-brand strategy and global expansion objectives. Expansion ventures into Europe with a new Hungarian factory and successful deliveries also mark a pivotal moment in Central and Eastern European market development.

In South America, BYDDY aims to revitalize a former Ford manufacturing site in Brazil with a $620 million investment. Three Bahia factories will process locally sourced lithium and iron phosphate for vehicle production, enhancing regional presence. Future endeavors further include a prospective Mexican factory by next year's end.

Additionally, BYD's battery subsidiary, FinDreams, has partnered with Huaihai Holding Group to lead the sodium-ion battery supply for small electric cars. A Jiangsu production base near Xuzhou aims to revolutionize mass-market EV commercialization with cost-effective sodium-ion battery technology.

TSLA's recent quarterly sales shortfall has affected Elon Musk's reputation in China, the world's largest automotive market. Its market share has shrunk significantly due to unprecedented local competition and declining consumer confidence. Despite being known as a disruptor with advanced technology, TSLA struggles with its limited lineup of the Model 3 sedan and Model Y SUV.

In contrast, competitors like BYDDY offer a wider range of vehicles with advanced features. From the affordable Seagull hatchback to the high-performance Yangwang U8 plug-in hybrid SUV, BYDDY presents a compelling array of options.

Globally, TSLA's delivery of 386,810 vehicles in the first quarter falls significantly short of expectations. "It’s been an epic disaster, not just in terms of the delivery number, but the strategy,” Wedbush Securities Inc. analyst Dan Ives said. “This is probably one of the most challenging periods for Musk and Tesla in the last four or five years.”

Furthermore, the company’s reliance on BYDDY battery cells puts it at a disadvantage, as BYDDY’s in-house battery and semiconductor manufacturing capabilities give it an edge. BYDDY’s revolutionary Blade Battery, with an impressive 600 km range on a single charge, highlights TSLA’s struggles to remain competitive.

Bottom Line

In 2008, BYDDY introduced its inaugural plug-in hybrid electric vehicle, the F3DM, coinciding with Berkshire Hathaway's $230 million investment. Since then, BYDDY has solidified its position as a dominant force in China's EV market, consistently ranking among the top monthly EV sellers in the country.

Having conquered the Chinese market, BYDDY now sets its sights on global expansion, with a presence in at least 58 overseas markets, including Germany, Japan, Australia, and Thailand. Manufacturing facilities in Thailand and Brazil are underway, and commitments are being made to build in Hungary and Indonesia.

BYDDY’s latest ultra-cheap car enhances its competitiveness against TSLA, which still struggles with affordability. Yet, BYDDY’s product portfolio spans all market segments, evidenced by the unveiling of a supercar aimed at the premium end of the EV market spectrum.

Ending 2023 with record-breaking sales, surpassing 3 million annual sales and retaining its global NEV sales champion status for the second consecutive year, BYDDY has solidified its position as China's best-selling car brand and manufacturer.

Analysts project robust growth for BYDDY in the fiscal year 2024, with its revenue and EPS expected to increase by 28.6% and 3.2% year-over-year, respectively, reaching $107.29 billion and $3.00.

In contrast, TSLA's revenue for fiscal year 2024 is forecasted to grow 9.9% year-over-year to $106.30 billion, while its EPS is anticipated to decline by 8.4% to $2.86. Moreover, Tesla missed the consensus revenue and EPS estimates in three of the trailing four quarters, which is concerning.

Given this scenario, BYDDY could challenge TSLA’s dominance, making it an attractive investment opportunity in the current market landscape.