It comes as no surprise that the only automaker selling more plug-in cars worldwide than Tesla is BYD. Although it seems like BYD is setting the pace for electric vehicles, it still lags behind Tesla in terms of pure electrics, according to CleanTechnica.
Since comparing the two leading brands in terms of EV sales is tricky, a closer look at their bank accounts might assist in identifying the significant discrepancy.
Upon examining the financials of BYD and Tesla, EV enthusiast “Ray4Tesla” found that Tesla makes a lot more money. In terms of revenue, BYD had $21.8 billion in the first half of 2022 compared to $35.7 billion for Tesla. While looking at the profits, BYD earned $0.5 billion, whereas Tesla made $5.6 billion. That is a significant difference in terms of business.
It is worth noting that BYD’s effort to invest increasingly more in EVs and expand its model selection and production entails shutting down its enormous legacy of conventional cars.
Although BYD has largely shifted to plug-in vehicles, or “new energy vehicles,” it has not yet finished this process.
Furthermore, BYD frequently competes in more fiercely contested markets for affordable cars, especially in China, while Tesla sells higher-priced “premium” vehicles with a bigger gross margin. Therefore, based on comparable revenue, it could be anticipated that BYD has lower gross margins and net profit while Tesla makes significantly more profit.
In addition, BYD is considerably more in jeopardy of losing money than generating it if government policies towards EVs change or if the economy continues to worsen, as Ray rightly noted.
Nevertheless, it would not hurt to remain optimistic about BYD and its plan.
However, BYD’s approach and future appear to be less stable and secure than Tesla’s.