Monday, March 27, 2023
HomeMarketTesla Rival BYD Had a Great Quarter. Earnings Beat Expectations.

Tesla Rival BYD Had a Great Quarter. Earnings Beat Expectations.

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The second largest EV company is also the second most profitable EV company and the likely one
CEO Elon Musk is watching.

Monday, Chinese EV maker
(ticker: 1211. Hong Kong) updated investors about full year 2022 earnings. The company expects to make about $2.4 billion to $2.5 billion in 2022. Analysts were projecting about $2.3 billion, according to FactSet.

The full year numbers imply fourth quarter earnings per share of about 33 cents. Analysts were projecting about 28 cents.

Shares fell 2.7% in Monday trading overseas. The update was out after the Hong Kong market closed.
‘s U.S. traded American depositary receipts, or ADRs, are up about 1%. The
S&P 500
is down 0.5%. The
Dow Jones Industrial Average
is flat.

BYD makes only electrified vehicles and makes EV batteries as well. The company delivered almost 1.9 million electrified vehicles in 2022. About 911,000 of those were all-battery electric vehicles.
(TSLA) is the largest maker of EVs. It delivered about 1.3 million vehicles globally. Roughly 420,000 vehicles were delivered in China, giving BYD about two times the market share of
in the country.

BYD vehicles, however, are lower priced than Tesla vehicles. BYD also offers more EV models than Tesla.

BYD and Tesla are the only all-electric vehicle producers that produce consistent profit. Tesla remains far more profitable than BYD.

BYD’s net income profit margin in 2022 is roughly 4%. Tesla produced net profit of about $12.6 billion in 2022, for a margin of roughly 15%.

Despite the profit gap, Tesla is paying attention to the competition in China. “The Chinese are scary, we always say that,” said Tesla VP of Vehicle Engineering Lars Moravy on the company’s Jan. 25 earnings conference call. “A lot of people always look at the EV market share, but we always look at it as how much of the total vehicle space do we have.”

Battery-electric vehicles accounted for less than 10% of global light vehicle sales in 2022, so Moravy believes there is 90% more of the market Tesla can target—regardless of the competition.

“We have a lot of respect for the car companies in China. They are the most competitive in the world. That is our experience,” said Musk on the same earnings conference call. “If I would have guessed, there [is] probably some company out of China as the most likely to be second to Tesla.”

Musk was probably talking about BYD. Tesla didn’t respond to a request for comment about who Musk views as the stiffest competition in China.

Tesla stock is down about 2.9% in midday trading Monday. BYD probably isn’t the reason. The overall market is weak. The
Nasdaq Composite
is down 1.2%. And Tesla stock has been on a tear, up about 41% so far this year, even including Monday’s drop.

Write to Al Root at


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