Tesla vs BYD: Comparing BYD's Q1 2023 Earnings Report to its Main Competitor
Tesla and BYD have both released their Q1 earnings, how do they compare to each other?
BYD's Diverse Product Offerings and Market Focus
Chinese automaker BYD recently released its Q1 2023 earnings report, showcasing growth and performance in the electric vehicle (EV) market. As one of Tesla's largest competitors, BYD is a significant player in the automotive industry, manufacturing a wide range of products, including passenger vehicles, commercial vehicles, rail transit, batteries, and electronics.
In the automotive sector, BYD sells a variety of vehicles, most of them geared to the affordable market with prices as low as $11k USD. It's also important to note that ~50% of BYD's vehicle sales are pure electric. The rest are either Hybrids and/or pure ICE, although BYD has been phasing out their gas car business since 2022.
Impact of the Chinese New Year on Sales and Production
Since BYD's primary market is China, it will be disproportionately impacted by the Chinese New Year with a week or so of no sales and production. However, its biggest competitor in Tesla also does a significant amount of business in the region and would be impacted in a similar fashion.
Comparing BYD and Tesla's Q1 2023 Earnings Reports
I will be comparing BYD's Q1 to Tesla's latest report to give a good baseline of how the company performed.
In Q1 2023, BYD posted over $400M USD in profit growth, with revenues reaching over $16B, over 80% increase YoY. However, revenues were 23% lower than the company's Q4 2022 earnings. Comparing BYD's performance to Tesla's reveals that while BYD's revenue was down 23% from Q4 2022 to Q1 2023, Tesla's revenue decreased by only 4%.
Unit Sales and BEV Market Share
From a unit perspective, BYD sold 522k cars in Q1 while Tesla sold 423k. However, as stated earlier, about 50% of BYDs sales are pure EVs (or BEVs). This means that in Q1, Tesla sold ~60% more BEVs globally than BYD.
BYD sold 693k total vehicles in Q4, making Q1 -20% lower from a unit sales perspective. In comparison, Tesla sold 405k in Q4, meaning Q1 was up by 4%.
Profitability Trends and Future Outlook
Tesla's net profit percentage has steadily declined from 17% in Q1 2022 to 11% in Q1 2023, while BYD's net profit percentage rose from 1% to 3% during the same period, although it did decrease from Q4 2022 to Q1 2023 from ~4.5%. However, despite a significant drop in sales from Q4 2022 to Q1 2023, BYD experienced faster growth than Tesla from Q1 2022 through today, primarily due to its fleet of very affordable vehicles.
BYD's growth is very impressive as an automaker. However, it's important to note that its profitability is significantly lower than its primary competitor in Tesla, which means that as Tesla continues on its path to bring down costs, it could leave BYD in an odd situation. Exiting Q1 with ~3% of net profit margin means that the company doesn't have much more room to go, and its ability to cut costs and drive scale will be crucial in remaining cost competitive.
Acknowledgements Huge thanks to @CnEVPost for providing a summary in English of BYD's report.
I seem to detect a certain difference in character between your in-person YouTube videos and your writings here. Is there perhaps a little GPT input here? I agree with most of your points here, however.