BYD vs Tesla - Halftime 2023
Missions completed and promises undelivered. Competitors and business partners. Who is first mover, excel in production and is the most innovative company?
Reasonable comparisons
Is BYD the Chinese Tesla or Tesla a US based BYD? The companies are competitors and buisness partners. Here I compare their current postion and some historical trajectories.
BYD produce a lot of things that Tesla doesn't as buses, mass transit rail systems, garbage trucks and fork lifts. This comparison will be limited to Tesla’s domain and products.
Electric cars:
This one category is Teslas all the way, almost. Here we look only to pure electric vehicles (BEV) and thus excludes BYDs big share of PHEVs. We focus on passenger cars and thus exclude all the BYD commercial vehicles.
Tesla has been the above all competition leader in units sold and profitability. Tesla is the biggest BEV brand in North America and Europe, while being the second to BYD in China since 2022. China is Teslas stongest production base as it has more than 50% share of production at it Shanghai factory, even though the first Tesla factory is in California and the newest factories are located in Texas and Germany. So far Tesla cars are majority Chinese and BYD car production is basically all China so far.
Since late last year BYD has started an international expansion and during the first half of 2023 gained the leading sales position in Israel, Thailand and New Zealand with only one model on sale the Atto 3. Expansion is going slow in Europe, but it might increase in late 2023 when global deliveries are planned to start of the cheaper Dolphin model.
In the first half of 2023 Tesla sales where up 57% YoY to 889 000. That is good and over the company target of at least 50% annual growth, but BYD is scaling faster. BYD BEV passenger car sales are up 96% YoY to 617 000. BYD was also growing a lot faster than Tesla comparing YoY 2022 to 2021.
While Tesla's gross margin has become lower in Q1 with 19,6 % and further decreased to 18,2 % in Q2. That is down from 25 % in Q2 2022. The gross margin of BYD has been increasing, as the production have ramped up fast.
BYD's gross margin was 17.86 percent in the first quarter, up 5.46 percentage points from the same period last year
https://cnevpost.com/2023/04/27/byd-over-400-yoy-q1-profit-growth/
Tesla is still the secure leader in BEVs and it is impressive what is possible with sales of basically 1,5 cars as Model Y and 3 shares most parts while Model S and X is more of a hobby project lately. Tesla has an extreme production efficiency of the Model Y and 3, especially in the Shanghai factory. Tesla dominace can partly be attributed to the company owning the US market without any real competition, while BYD and other Chinese companies are technically locked out because of politics. Still Tesla is continuing being the number one player even in Europe where Chinese brands are expanding. Expansion to new markets, new models, advancement of battery technology and politics will probably decide the future pole position in this category.
The $25,000 car
Tesla launched the idea of a cheap $25,000 car on their battery day 2020. Hopes are still up, but the cheapest Tesla right now is the Model 3 in China selling for an equivalent of $32,000.
BYD started deliveries in China of the Dolphin in 2021 and launched the 2023 model priced below $17,000. In 2023 deliveries started of the Seagull priced below $12,000.
I guess BYD has been winning this category for along time.
The Roadster:
The Tesla story started with an expensive and not very beautiful sports car, a roadster. Later a new-generation roadster was showed off in 2017 as a “final smackdown” and promised it would be in production in 2020. Tesla even gave away lots of roadsters to prior customers as a marketing scheme within the companies referral programme.
“An impressive number of people ended up reaching that level, and we estimated that Tesla would be giving away about 80 new Roadsters on top of giving out significant discounts to many more...
Earlier this year, Musk hinted at Tesla Roadster being delayed all the way to 2022 as the automaker focuses on the Cybertruck.
- Electrek, December 7, 2020
https://electrek.co/2020/12/07/tesla-gives-deadline-roadster-referral-discount-winners-supercar/
As I am writing the people who ordered the next-generation roadster are still training their patience. No roadsters have been produced, of course no cybertrucks either to be fair. Elon Musk is still teasing that it will come with rocket technology from his company Space X and they still gladly show of a beautiful prototype without rockets.
BYD launched a new brand in April this year, called Yangwang, with two cars. One of the cars is the U9, a roadster. It doesn't come with rockets, but it has been shown jumping on stage and driving on three wheels. It is supposed to arrive later this year possibly in September.
This upcoming supercar has four motors, travels 0-100 km/h (0-62 mph) in 2.0 seconds and starts at a price of around $150,000.
Electrek, April 10, 2023
https://electrek.co/2023/04/10/byd-yangwang-u9-ev-0-60-mph-2-seconds-it-can-ollie-jump-supercar/
We will have to follow this topic with some patience. I would not hesitate though to put my bet on BYD. Even though supercars are play for the richest of elites, they mostly have a role in marketing creating a psychological halo effect. They could presumably be vehicles for introducing some important new technologies that later could be available on on reasonable types of transports as buses or bikes!
Batteries:
Tesla launched the adventure of making their own 4680 batteries at the Battery day 2020. It seems production is slow and the quality is not really clear. Tesla is not reporting regularly on their production of batteries. The latest news was that production was some what increasing, but probably still moving slower than the competition.
With all of that in mind, one does wonder if a slow production ramp-up of 4680 battery cells could delay Cybertruck production further.
Cleantechnica, June 6, 2023
https://cleantechnica.com/2023/06/23/tesla-giga-texas-has-produced-enough-4680-battery-cells-for-8000-tesla-cybertrucks/
A few months ago Tesla started buying BYD batteries for the factory in Berlin that was supposed to have its own battery production. Some reports even claim that the BYD batteries have a faster overall charging time than models produced with CATL batteries. Tesla and BYD are not only competitors but business partners.
BYD is the biggest producer of cobalt-free LFP batteries, and this year passed LG as the second biggest EV battery manufacturer in the world having supplied Toyota as well as Ford in China.
BYD installed 38.1 GWh of power batteries from January to May, up 107.8 percent from 18.4 GWh in the same period last year. The production numbers are public. The company ranked second with a 16.1 percent share from January to May, up from 11.8 percent in the same period last year
CNEV Post, July 5, 2023
https://cnevpost.com/2023/07/05/global-ev-battery-share-jan-may/
I won't go deep into the battery storage systems here as it is hard to get all the relevant facts. Both companies do smaller distributed and big storage projects. BYD supplied a 140MW battery storage system in Hebei claimed to be the biggest in the world in 2012. In 2017 Tesla claimed the same title with a 100 MW project in Hornsdale, Australia. Last year Tesla built a new facility in California expanding battery storage production. Tesla total battery energy storage deployment in H1 2023 is 7,542 MWh (up 281% year-over-year).
BYD launched a new home storage battery MC Cube this year and started building a new battery storage industry complex in Shenzhen. I would guess BYD has the upper hand in storage with access to their own cheap LFP batteries, and Tesla get lots of supply from different sources.
BYD is winning the battery game since it was founded in 1995, and stepped up the game in 2020 with the launch of their blade battery that is now in 2023 part of all vehicles and storage systems. Tesla is far off competing in battery production, but has a lot of good suppliers. By having the battery advantage BYD is also far more vertically integrated than Tesla. Though the real battery giant setting the game is CATL, but that is another story.
Cybertruck:
Oversized trucks are not a thing in China or Europe as a family commodity. Still it seems BYD will launch trucks both under the BYD brand and possibly another one coming with FCB branding, but they haven't been either launched or promised. I guess neither will be on sale before next year. Tesla was first showing the Cybertruck in late 2019, and now it is promised to arrive later this year.
Musk has made this sort of promise before. The pickup was once slated to begin production in late 2021. It was then pushed back to 2022, then to 2023.
Forbes, 2 July, 2023
https://www.forbes.com/sites/brookecrothers/2023/07/02/tesla-cybertruck-coming-this-quarter-musk/
The truck was promised at a price point of $39 000, and it is now said to be hard to manufacture in a cost effective way. While promises have been made the US competition in BEV trucks has started with deliveries of different models with the Ford F-150 leading the pack with 4166 sales in the second quarter of 2023. Tesla is not alone and the first Release Candidate was launched at half year showing that mass production is still a bit off.
I think Tesla will have a partial late sucess in at least getting some trucks on the streets, but BYD so far isn't competing so then does the competition begin? We have to follow this one up if the Cybertruck and BYD pick-ups arrives and and the production ramps up. Let's see at the end of 2024.
Semi-truck:
Tesla launched the Semi-truck in 2017 and first production would start in 2019.
Before a packed crowd of thousands, Musk revealed industry-disrupting details of the Tesla Semi.
Teslarati, November 16, 2017
https://www.teslarati.com/tesla-semi-unveiled-coming-2019-500-mile-range/
Three years late, in December 2022, the first 36 Semi-truck deliveries where made in California to a beverage company possibly delivering light weight potato chips. The disrupting details of the delivered trucks have not been unveiled, but the promises of volume production is slipping away.
Elon Musk gave an update on Tesla’s plan to bring Tesla Semi to volume production. It looks like it won’t happen for another year.
Electrck, June 14, 2023
https://electrek.co/2023/06/14/elon-musk-updates-tesla-semi-production/
In the Tesla Q2 financial statement Semis are categorised as “In Pilot” and it seems that the 2022 delivery should have been called a test rather than celebrated first deliveries to a customer.
BYD has sold lots of different types of trucks in China, and was part of a testing Semis in California going back at least to 2020 with deliveries to a beverage company with the purpose of delivering beverages.
BYD delivered its 100th battery-electric truck in the United States, a second-generation BYD 8TT Class 8 Electric Semi
Work truck online, January 8, 2020
https://www.worktruckonline.com/348215/anheuser-busch-receives-byds-100th-battery-electric-truck
In 2022 the company used 25 BYD trucks and ordered another 20 to be delivered during the year.
Actually a refrigerated BYD Semi was tested starting late 2017, before the launch of the Tesla Semi, by a company in Canada.
Canada’s largest retailer specializing in food and pharmaceuticals has unveiled a 53 foot, fully electric class 8 BYD truck that is the first in a transition of its company-owned fleet to electric vehicles.
Cleantechnia, November 6, 2017
https://cleantechnica.com/2017/11/06/canada_largest_retailer_loblaw_unveils_first_fully_electric_truck/
In 2023 BYD was bringing the third generation of their Semi to Canada.
So I guess BYD won this one category even in an away game before Tesla even started running. To be continued though as BYD California might have a harder time gaining govenment subsidies. Elon Musk might need some help from friends in the government to win this one. Tesla is coming out to a crowded field with multiple companies delivering electric Semis in the US.
Solar
Last but not least we get out of the vehicles. Both Tesla and BYD has solar production since many years. This is a hard subject to get complete information, but a comparison can still be done.
Tesla bought SolarCity in 2016 and the production and sales have been falling. Lofty promises delivered in 2019 of 1000 solar roofs per week have not really materialised.
A recent Wood Mackenzie analysis showed that, while Tesla said in 2019 it hoped to reach 1,000 Solar Roof installations each week, it's only installed about 3,000 in total.
CNET, June 16, 2023
https://www.cnet.com/home/energy-and-utilities/tesla-solar-roof-is-the-sleekest-solar-option-your-best-one/
Tesla is doing in three years what was promised in three weeks, it might be an example of what is sometimes called Tesla Time. Still Tesla also buys solar panels and deploys them at some rate that seem to be climbing from low levels y-o-y 67 MW in Q1 and then falling in Q2 2023 to 66 MW (-38% y-o-y).
BYD is not doing futuristic sunroofs but regular solar panels with production going on since at least 2006 in China. In 2009 BYD was building rooftop solar system on their Shenzhen HQ. In 2012 the capacity in Shanghai was 750 MW and BYD supplied 70 % of the panels to projects in Europe. By 2013 it was supplying panels to a rooftop system at Lahore University in Pakistan and a ground mounted system in Greece. In 2017 the company started solar module manufacturing in Campinas, Brasil. The Campinas factory started out with 200 MW capacity and had 20% of the domestic market in 2019. Investments and upgrades seem to continue.
The new production lines also allow the factory to become compatible with all solar cell sizes currently available on the market. The facility now has a capacity of 500 MW
PV Magazine, September 22, 2022
https://www.pv-magazine.com/2022/09/22/byd-to-produce-22-2-efficient-n-type-topcon-solar-modules-in-brazil/
According to BYD homepage installations of bigger solar projects have been made at least in China, the Philippines, Honduras, Uruguay, Japan and Australia. And smaller distributed installations in the Netherlands, Switzerland and South Africa.
I will give this one to BYD mostly based on the less talk and more work principle. I can't judge the technique, but BYD clearly has the larger global impact being present in at least four continents with their solar panels. Tesla could hopefully get their roofs together in the future, but so far they are mostly out in the rain.
To sum it up
Tesla is hanging on to the lead in pure electric car sales and definitely in lofty promises of future high-tech products. BYD is winning the solar, cheap car, battery and Semi categories by far, so far. Roadsters and pickup trucks haven’t landed yet. I pass on charging infrastructure it would be a win for Tesla especially as the US is leaning into the NACS standard developed and dominated by Tesla. BYD probably builds chargers for commercial vehicles at some smaller scale but I have never seen any goals or reports on that. I will cover charging in a later post.
What I realise doing this comparison is how the image of Tesla as a daring pioneer in the energy transition is to some degree falling apart. Sometimes I wonder if Tesla was coping the BYD handbook as the semis, batteries and solar. At other times it seems BYD will implement or already finished projects that Tesla dreamed about but haven't yet accomplished as the roadster and the cheap car. That is not to diminish the role of Tesla in the global race to electrify passenger vehicles.
A comparison I haven't deared to do is the autonomous driving skills as BYD seem to have a crappy level and Elon Musk have been promising or guessing that Tesla cars can drive themselves every year for I can't remember how many years. So relying 100% on either of the brands would be a death sentence.
A really relevant comparison would be the impact on nature and society as this is the only reason the electrification of transports is of immense importance. Collective transport, renewable energy, smaller vehicles, production and driving efficiency is essential. BYD with large deployments of buses, smaller cars, cobalt-free batteries and lots of solar energy would probably come out as the leader. On the other side are Teslas highly efficient motors opposed to BYDs car manufacturing to one half consist of PHEVs, some that are really boxy, that still contain gasoline engines and are more or less fossil fuel driven cars. I will havet to get back to the BEV vs PHEV discussion in a later post. Promoting car culture at all is probably hard to define as doing nature a favour.
Things will change, and the wind is blowing the way of BYD at least when it comes to internal factors. Some important factors beyond the companies in determining the development are political decisions in the US and EU, while battery advancements by CATL supplied to Tesla could make it harder for BYD to compete with their cheaper and safer but not so efficient batteries.
Let's see where we are at the end of 2023!