Credit：BYD
BYD announced Wednesday revenue of RMB201.1 billion (US$28.2 billion) for the third quarter of the yea, representing a year-over-year (YoY) gain of 24.4%. missing analysts’ estimates of RMB204.8 billion. But the revenue still exceeded Tesla’s US$25.2 billion in sales from June to September, first trailing Tesla as the No. 1 EV maker by quarterly sales.
BYD net income for the third quarter rose 11.47% YoY to RMB11.6 billion, beat expectoration. The profit still fell behind Tesla’s net income of US$2.2 billion, reflecting a 17% YoY increase the same period. BYD earnings per share (EPS) that quarter gained 11.73% YoY to RMB4.0.
Third quarter saw BYD sold 1.13 million new energy vehicles (NEVs) including electric and plug-in hybrid vehicles, topping the analysts’ estimates of 1.1 million. That represented a 37.7% YoY increase and brought the total sales from January to September to 2.75 million units, with a 32.1% YoY rise. The sales surge was driven by China’s efforts to boost the auto industry including consumption of NEVs these months.
China's Ministry of Industry and Information Technology (MIIT), in collaboration with four government bodies, has launched a nationwide campaign to bolster the NEV uptake in China's rural areas in May. The initiative run from May to December 2024 and has been designed to bridge the current NEV consumption gap in rural regions, thereby enhancing residents' level of green, safe travel and contributing to the construction of beautiful villages and rural revitalization. The NEV rural promotion catalog features an impressive array of 99 models from leading auto manufacturers, encompassing a wide range of NEVs for various sectors, including sedans, SUVs and multipurpose vehicles.
The Chinese government said in August it has increased a financial stimulus to encourage consumers to scrap their old vehicles and buy new ones. Subsidies for trade-ins of new energy passenger vehicles have doubled from RMB10,000 -- a figure stipulated in an April document -- to RMB 20,000, per the circular, which was released by the Ministry of Commerce and six other government departments. Subsidies for trade-ins of fuel passenger vehicles have been raised from RMB7,000 to RMB15,000. The new policy applies to all subsidy applications submitted between April 24 this year and Jan. 10, 2025.
As growth in consumer demand for fully electric cars wanes, BYD has been insulated more than Tesla due to its strong lineup of hybrid vehicles, Bloomberg noted. It added another key part of BYD’s edge is its vertically integrated supply chain — making more parts in-house gives it a cost and scale advantage to produce cars more cheaply.
Tesla earlier this month also recorded strong earnings for the quarter ended September 30. The company reported the earnings beat following the miss for fourth straight quarter. The non-GAAP diluted earnings per share (EPS) gained around 9.1% year-over-year (YoY) to $0.72 for the third quarter, whereas analysts projected $0.6 with a YoY decrease of 9.1%. The operating income surged YoY 54% to $2.72 billion, compared with analysts estimated $19.6 billion. The operating margin increased 323BPs from a year ago to 10.8%, topping analysts’ expectation of 8%.
Tesla said the profitability continued to be weighed by reduced vehicle average selling price (ASP) amid the price war at the EV sector. In addition to the gross profit growth of the energy business, the profitability was also buoyed by lower cost per vehicle, including lower raw material costs, freight and duties and other one-time charges, higher Full Self-Driving (FSD) software revenue recognition for releases related to Cybertruck and certain features such as Actually Smart Summon, increase in vehicle deliveries and higher regulatory credit revenue.
Tesla re/confirm/ied its plan to produce its sub-$30,000 EV, dubbed the Model 2. Plans for new vehicles, including more affordable models, remain on track for start of production in the first half of 2025, the company said.
Tesla posted delivery of 462,890 units for the third quarter with a 6.4% YoY increase, the first rise in a year. It still expected the deliveries this year will achieve slight YoY growth despite ongoing macroeconomic headwinds. The forecast requires Tesla to deliver more than 510,000 vehicles for the current quarter, a new quarterly record that is set to be 30,000 units higher from a year ago.
Tesla CEO Elon Musk even predicted on an earnings call the deliveries next year could grow by 20% to 30%e, though he couched it as a "best guess." Musk told analysts Cybercab, a prototype of Tesla’s long-awaited Robotaxi, will reach volume production in 2026, with an aim to at least 2 million per year, and “maybe 4 million ultimately.”
