NASDAQ Title Tesla Stock: Tesla outperformed BYD in price cuts in China

• Tesla and BYD face tough competition in China
• Tesla implemented major price cuts
• BYD still in the fast lane

The two electric vehicle manufacturers Tesla and BYD are in a neck-and-neck race for leadership in China. In the current difficult market environment, rivals in the People’s Republic and beyond are relying on price reductions in order to achieve their ambitious delivery targets.

Tesla cuts prices more significantly than BYD

According to a study, Tesla has reduced the prices of its electric vehicles more, as CNBC reports with reference to the US analysis firm JL Warren Capital. Tesla reduced the price of its Model 3 by six percent between December 2022 and December 2023. Chinese buyers would have had to pay eleven percent less for the Model Y. BYD has also implemented price reductions in the People’s Republic. However, the price of the flagship Han model only fell by five percent in the same period, according to JL Warren Capital CEO Junheng Li.

The BYD Sedan Han can best be compared with the Tesla models, as it is in a similar price category of around 28,000 US dollars. Other BYD vehicles are offered much cheaper. As the analysis shows, the Chinese electric car manufacturer has reduced the prices of some blockbusters by ten and even 17 percent over the year 2023. However, according to Li, this is not an unusual move: “Double-digit discounts are a common promotion [Originalherstellern]”to promote sales and achieve the sales target,” CNBC quoted the expert as saying.

New energy vehicles are becoming more important

Overall, so-called new energy vehicles could take a larger place in the Chinese car market in 2023, as the news portal writes. This may also have been due to the subsidies from the Chinese government. More than a third of all cars in the People’s Republic are now battery-powered or hybrid vehicles. If the head of JL Warren Capital has her way, the share is likely to increase to 40 percent in 2024, with the analyst expecting sales of electric cars to increase by 20 percent. However, the tough competition in the important Chinese e-car market does not only have positive effects, says Li. E-car providers are trying to convince more customers, particularly through new models. However, this leads to the market being flooded with outdated models. In the past, the development cycle of new vehicles in China would have taken around three years. However, it has now been shortened to one to two years. A strategy that BYD also uses successfully.

Changing the competitive landscape

“The competitive landscape in the auto industry has changed,” Bridget McCarthy, head of China operations at hedge fund Snow Bull Capital, told Bloomberg. “It’s no longer about the size and legacy of automakers, but about the speed at which they can innovate and evolve. BYD began long ago to prepare to do this faster than anyone else thought possible, and now the rest of the industry has to try to catch up.”

BYD overtakes Tesla in deliveries

In the fourth quarter of 2023, BYD overtook Tesla in terms of deliveries, not in China, but worldwide. This represents an important turning point for the electric car market, which Tesla has so far undoubtedly led, as the news agency reports. As early as the third quarter of 2023, the gap between the delivery figures of Tesla and BYD shrank significantly. While the US car manufacturer delivered 435,100 electric vehicles to customers worldwide, BYD was able to hand over 431,600 EVs to the new owners. In addition, Tesla is also ahead of its Chinese competitor when it comes to important fundamentals such as sales, profits and market capitalization. However, as the analysis firm Bernstein predicts, some of these gaps are likely to narrow significantly in 2024. According to Bloomberg, experts assume that Tesla will generate $114 billion in sales in 2024, followed shortly afterwards by BYD with $112 billion.

According to GlobalData forecasts, BYD is also expected to join the ranks of the world’s ten largest automakers in 2023, as shown in a Bloomberg graphic. BYD is likely to rank ninth in the top ten with an estimated 3.13 million sales in 2023. Toyota is likely to remain in first place with 10.65 million deliveries.

Editorial team finanzen.net

Selected leveraged products on BYD

With knock-outs, speculative investors can participate disproportionately in price movements. Simply select the lever you want and we will show you suitable open-end products on BYD

The leverage must be between 2 and 20

Advertising