Tesla shares at a glance: Musk comments on BYD’s biggest decline in sales in years

• Tesla CEO Elon Musk commented on BYD’s slump in sales on X
• Musk explained that factory utilization below 50 percent would be “extremely painful”
• It was BYD’s sixth consecutive month of declining sales

Musk’s reaction to BYD’s sales figures

On March 2, 2026, Tesla CEO Elon Musk responded to a post by analyst AJ Investment Research (@alojoh) on Platform The analyst wrote that he had never seen such a rapid decline in sales outside of a severe recession and put the adjusted decline at 36 percent. BYD is currently running at less than 50 percent of its capacity. Musk commented on this by saying that “it was a difficult situation” (tough sledding). Factories ran well at over 80 percent capacity, only just under 60 percent and below 50 percent it becomes “extremely painful”. Musk did not name BYD directly, but the statement clearly referred to the Chinese manufacturer’s figures presented by the analyst.

That’s tough sledding. Factories do great above 80% capacity, marginal at 60% and mega pain below 50%.

– Elon Musk (@elonmusk) March 2, 2026

The background to Musk’s assessment is also relevant for Tesla itself: Andre Thierig, Senior Director of Manufacturing at Giga Berlin, explained in a LinkedIn post at the beginning of March 2026 that Gigafactory Berlin would have once again produced over 200,000 vehicles in 2025. According to Tesla’s official quarterly report, the factory’s total annual capacity is over 375,000 vehicles, which means that Tesla’s European factory was also running at full capacity. In China, Tesla sold just 18,485 vehicles domestically in January 2026, according to data from the China Passenger Car Association (CPCA), a decline of 45 percent year-on-year. As a March 2, 2026 report from Electric Vehicles shows, Tesla’s Shanghai factory typically prioritizes exports at the start of the quarter before focusing on the domestic market.

BYD’s sales slump in numbers

BYD’s official sales report dated March 1, 2026 said the Shenzhen-based group sold a total of 190,190 new energy vehicles (NEVs) in February, a year-on-year decline of 41.09 percent. Compared to January 2026 (210,051 units), sales fell by a further 9.5 percent. It was the sixth consecutive month of declining sales. In the purely electric vehicle (BEV) segment, BYD delivered 79,539 units, a decrease of 36.3 percent. The decline in plug-in hybrids (PHEV) was even greater at 108,243 units, a decline of 44 percent. Production fell to 175,280 vehicles in February, almost halving compared to the same month last year. In January, production had already fallen by 29.1 percent to 232,358 units. Over the first two months of 2026 combined, BYD sold 400,241 vehicles, a decrease of 36 percent compared to the same period last year.

BYD itself pointed to the Chinese New Year as a key factor in the February slump. The holidays in 2026 fell from February 15 to 23 and impacted production and deliveries more than in the previous year, when they predominantly fell in January. In addition, a 5 percent purchase tax on new energy vehicles introduced by the Chinese government has been burdening the entire NEV market since the beginning of 2026.

Export strength as a counterweight and growing competition from Geely

In addition, the sales report states that BYD delivered 100,600 vehicles abroad in February, an increase of 50.1 percent year-on-year. This was the first time that foreign sales exceeded domestic sales in a single month. In Europe, BYD sales rose 175 percent to 13,790 vehicles in January 2026, according to ACEA data, with market share climbing from 0.6 to 1.7 percent. In Szeged, Hungary, BYD began test production of its first European factory in January 2026; Series production is scheduled to follow in the second quarter of 2026.

However, BYD continued to come under pressure in its Chinese home market. Competitor Geely announced in a press release that 206,160 vehicles were sold in February – overtaking BYD in the Chinese market for the second month in a row. In the first two months of 2026, Geely was around 76,000 units ahead of BYD in China. According to a report by Electric Vehicles, BYD operates nine major production sites in China with a combined annual capacity of 5.82 million vehicles. At the current sales level of around 200,000 units per month, this results in annualized production of around 2.4 million vehicles, which corresponds to a utilization rate of well below 50 percent. To counteract this, BYD launched a financing program at the end of February 2026 Low interest rateinstallments for up to seven years and announced the unveiling of what it described as “groundbreaking” new technology on March 5, 2026, including a second-generation ultra-fast charging system.

D. Maier / editorial team finanzen.net

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