Chinese carmaker BYD is gaining momentum in the increasingly competitive global EV race, while the dominance of longtime leader Tesla wanes.
The Warren-Buffett backed carmaker on Monday reported a 13% year-over-year increase in “new-energy” vehicle sales, which includes both electric and plug-in hybrid vehicles. In total, the company sold 626,263 vehicles in the first quarter, of which about 300,114 were pure EVs.
Although the first two months of the year saw sales slip, purchases jumped 46% in March, the company said.
BYD’s strong first quarter performance contrasts with plummeting expectations for Elon Musk-owned EV maker Tesla, whose stock has dropped nearly 30% year-to-date.
Several analysts have revised down their projections for the company’s first quarter vehicle deliveries (an approximate gauge for sales), after reports of a cutback in production at Tesla’s factory in Shanghai.
Wedbush Securities cut their estimate to 425,968 from about 475,000. If Wedbush’s prediction is accurate Tesla’s vehicle deliveries will have grown less than 1% year over year, but would still be higher than BYD’s pure EV sales during the same period. Tesla is set to report its first quarter vehicle deliveries on Tuesday.
Despite years of strong growth, Tesla has faced increasing competition from Chinese automakers, including BYD. The carmaker late last year surpassed Tesla for the first time as the world’s biggest EV seller on a quarterly basis.
The global EV race has started to heat up, especially as lower-priced vehicles from China make headway overseas, much to the dismay of Western governments and established carmakers such as Nissan and Honda as well as Tesla. Besides BYD, Chinese carmakers such as Li Auto, Nio, and Xpeng also reported sales rebounds in March after a weaker start to the year.
Tesla critics and bulls alike have begun to sound the alarm about the company’s performance, including Wedbush’s Dan Ives, who said in an interview with CNBC last week that the company is in a “code red situation.” Ives reiterated his outperform rating on the stock with a price target of $300. The stock was trading at about $175 on Tuesday.
To boost sales, Tesla recently shed its aversion to digital advertising. Musk has also promised many of its customers a free trial of its $12,000 per year “Full Self-Driving” mode to help add more subscribers.
Still, Musk has cautioned investors that Tesla will likely face “notably lower” sales growth this year.
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