Ex-Nissan COO warns: Tesla’s new models are clearly inferior to BYD & Co

• Tesla vs. BYD: competition in view
• Tesla and BYD disappoint with financial results
• Are Tesla’s models inferior to the Chinese?

Competition has been going on for years

In the years-long competition for the top spot in the global electric car market, two completely different heavyweights are meeting: Tesla, the US pioneer with its high market capitalization and technological leadership, and BYD, the Chinese challenger with cost advantages, growing production power and now higher sales figures for electric vehicles.

Tesla remains the technology leader in batteries, software and autonomous driving and is strengthening its market position with its Supercharger network and new business areas such as energy storage and AI mobility, as Börse Express explains.

BYD, on the other hand, impresses with cost leadership and a wide range of models, supported by its own battery production.

Tesla remains the benchmark in the industry thanks to its innovative strength and brand strength. However, BYD’s rise shows that the balance of power in the electric car sector is shifting – towards more intense competition.

It was only in August that the Chinese electric car manufacturer managed to leave its US rival Tesla behind for the first time in the new Fortune Global 500 ranking. At number 91, BYD climbs up 52 places, while Tesla falls back to position 106. This means that China’s largest electric car producer is ahead of Elon Musk’s group for the first time – a milestone that underlines the growing economic clout of Chinese companies.

While Tesla remains the most valuable car manufacturer in the world with a market capitalization of around 1.46 trillion US dollars, BYD is quickly catching up operationally and is now also targeting European manufacturers such as Volkswagen (ranked 12th). The Chinese challenger is using its strengths in battery technology and a wide range of models – including plug-in hybrids, which Tesla does not offer – to gain market share.

BYD & Tesla: balance sheets disappoint

However, both companies disappointed with their respective latest financial results.

The Chinese electric car manufacturer BYD reported its first decline in profits in three years in the second quarter of 2025 – by around 30 percent to 6.4 billion yuan (895 million US dollars). In addition, there is a recall of more than 115,000 vehicles, which reveals quality problems and weaknesses in production. Deliveries also fell by over 5 percent in September, and the annual target was lowered from 5.5 to 4.6 million vehicles.

Tesla also disappointed despite a new delivery record: The company sold more cars than ever before, but recorded a 37 percent drop in profits to $1.37 billion in the most recent reporting quarter. The main reason for the increase in sales was the final spurt in US tax credits for electric vehicles, which boosted demand in the short term – but is now likely to lead to a sales gap in the fourth quarter.

Tesla models are inferior to the Chinese?

Tesla’s new “standard” versions of the Model 3 and Model Y are now supposed to make it cheaper to get started with e-mobility – but industry experts don’t see any real progress in this. The models cost around $37,000 to $40,000, but offer significantly less equipment: functions such as lane assistant, rear seat display or radio are completely missing. Andy Palmer, former Nissan manager and “godfather of the electric car,” explains to Business Insider that Tesla makes the price more attractive, but cannot compete with the feature-rich and cheaper vehicles from Chinese manufacturers: “If you take out the features – and Tesla has taken out a lot of features – then that creates a new price point. But that new price point doesn’t make it competitive the Chinese competition, which is packed with features.”

While BYD, Geely & Co. already offer advanced driver assistance systems, AI functions and voice control in their models – some in vehicles under $10,000 – Tesla is removing features without significantly lowering the price level. Especially outside the USA, for example in Europe, Mexico or Brazil, Chinese brands are gaining massive market share, while Tesla’s sales continue to decline. Palmer therefore warns that Tesla and other Western manufacturers must finally respond to the speed of innovation of their Chinese competitors: “You have to tackle the problem instead of hiding behind regulatory or customs regulations. They isolate you for a while, but they don’t make the problem go away,” he concludes.

Editorial team finanzen.net

This text is for informational purposes only and does not constitute an investment recommendation. finanzen.net GmbH excludes any claims for recourse.

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