BYD's outpacing of Tesla has only just begun
The author is a Reuters Breakingviews columnist. The opinions expressed are her own.
By Katrina Hamlin
HONG KONG, Oct 31 (Reuters Breakingviews) -One electric-vehicle challenge Elon Musk saw coming in his rear-view mirror has just edged past him. On Wednesday, BYD 002594.SZ, 1211.HK clocked quarterly sales that handily beat Tesla TSLA.O. The next worry is that his Chinese rival will keep pulling further ahead.
BYD's top line was neck and neck with Tesla's in last year's fourth quarter. But it powered ahead in the latest results, with a record 201 billion yuan ($28 billion) in revenue in the three months to the end of September, some $3 billion more than its U.S. rival's.
Granted, it doesn't compare apples with apples: BYD makes both pure and hybrid electric cars, as well as mobile handsets and commercial vehicles. Strip out the estimated contribution from its mobiles division, and BYD raked in roughly $22 billion, similar to Tesla’s combined revenue from automotives and services. Whichever way you cut it, that’s a landmark for the Chinese company, which only began to specialise in battery-powered vehicles in 2022.
Founder and Chair Wang Chuanfu is investing aggressively in research, which for 2024 could hit $6.5 billion. That's nearly 50% higher than Tesla’s forecast outlay, analyst estimates compiled by LSEG show.
China accounted for the vast majority of BYD's deliveries and growth in the first nine months of the year, helped by consumers' taste for homegrown brands. Local badges accounted for nearly two-thirds of industry sales this year, compared with one-third in 2020, per consultancy Automobility.
Exports made up roughly 10% of the total in the first three quarters, despite a pushback against the influx of Chinese electric cars from Brussels to Washington. International markets could become the growth engine as the company is readying factories in Hungary, Thailand, Turkey, and Brazil. For the first time in August, monthly sales filings showed BYD sold more cars abroad than it exported, indicating overseas production is already making a contribution.
Tesla still beats BYD on some other counts. Its vast Shanghai factory achieved its lowest-ever cost of goods per vehicle in the third quarter. That helped bag a net profit of $2.2 billion, higher than BYD’s $1.6 billion bottom line, even though Musk's outfit does not produce higher-margin hybrids like Wang's does. Tesla's so-called “full self-driving” system, whilst not quite living up to its name, is also more advanced than many competitors’.
Such advantages will keep Tesla humming. But BYD is gearing up for a formidable lead.
Follow @KatrinaHamlin on X
CONTEXT NEWS
Chinese electric-car maker BYD on Oct. 30 reported net profit grew 11.5% year-on-year to 11.6 billion yuan ($1.63 billion) in the three months to the end of September. Total revenue increased 24% to a record201 billion yuan ($28.22 billion).
Tesla’s net profit in the same period was $2.2 billion, while total revenue was $25.2 billion, according to a filing on Oct. 23.
Graphic: Local brands are seizing market share in China https://reut.rs/3AlVQxG
Editing by Antony Currie and Ujjaini Dutta
Mga Kaugnay na Asset
Pinakabagong Balita
Disclaimer: Ang mga kabilang sa XM Group ay nagbibigay lang ng serbisyo sa pagpapatupad at pag-access sa aming Online Trading Facility, kung saan pinapahintulutan nito ang pagtingin at/o paggamit sa nilalaman na makikita sa website o sa pamamagitan nito, at walang layuning palitan o palawigin ito, at hindi din ito papalitan o papalawigin. Ang naturang pag-access at paggamit ay palaging alinsunod sa: (i) Mga Tuntunin at Kundisyon; (ii) Mga Babala sa Risk; at (iii) Kabuuang Disclaimer. Kaya naman ang naturang nilalaman ay ituturing na pangkalahatang impormasyon lamang. Mangyaring isaalang-alang na ang mga nilalaman ng aming Online Trading Facility ay hindi paglikom, o alok, para magsagawa ng anumang transaksyon sa mga pinansyal na market. Ang pag-trade sa alinmang pinansyal na market ay nagtataglay ng mataas na lebel ng risk sa iyong kapital.
Lahat ng materyales na nakalathala sa aming Online Trading Facility ay nakalaan para sa layuning edukasyonal/pang-impormasyon lamang at hindi naglalaman – at hindi dapat ituring bilang naglalaman – ng payo at rekomendasyon na pangpinansyal, tungkol sa buwis sa pag-i-invest, o pang-trade, o tala ng aming presyo sa pag-trade, o alok para sa, o paglikom ng, transaksyon sa alinmang pinansyal na instrument o hindi ginustong pinansyal na promosyon.
Sa anumang nilalaman na galing sa ikatlong partido, pati na ang mga nilalaman na inihanda ng XM, ang mga naturang opinyon, balita, pananaliksik, pag-analisa, presyo, ibang impormasyon o link sa ibang mga site na makikita sa website na ito ay ibibigay tulad ng nandoon, bilang pangkalahatang komentaryo sa market at hindi ito nagtataglay ng payo sa pag-i-invest. Kung ang alinmang nilalaman nito ay itinuring bilang pananaliksik sa pag-i-invest, kailangan mong isaalang-alang at tanggapin na hindi ito inilaan at inihanda alinsunod sa mga legal na pangangailangan na idinisenyo para maisulong ang pagsasarili ng pananaliksik sa pag-i-invest, at dahil dito ituturing ito na komunikasyon sa marketing sa ilalim ng mga kaugnay na batas at regulasyon. Mangyaring siguruhin na nabasa at naintindihan mo ang aming Notipikasyon sa Hindi Independyenteng Pananaliksik sa Pag-i-invest at Babala sa Risk na may kinalaman sa impormasyong nakalagay sa itaas, na maa-access dito.
