BYD Beats Tesla in Sales For The First Time… So Why is The Stock Not Responding?

Move over, Tesla. There’s a new kid on the block (well, not so new, but you get the point), and it’s China’s BYD (Build Your Dream). In the third quarter of 2024, BYD managed to sell enough EVs to make Elon Musk spit out his morning coffee (raking in $28.24 billion compared to Tesla’s $25.2 billion). It seems like the only way is up at the moment — the automaker has just posted its fourth consecutive month of record-breaking EV sales and climbed 224 positions on this year’s Fortune Global 500.

Remember back in 2011, Elon Musk had some choice words for BYD. “Have you seen their car?” he said in an interview with Bloomberg, adding, “I don’t think they make a good product.” Fast forward over a decade, and that statement hasn’t aged well. The Warren Buffett-backed Chinese automaker, once brushed off by Musk as a “not so good product” is leaving everyone, including Tesla, with some catching up to do. 

See, Tesla is like that high-end restaurant that serves only a handful of gourmet dishes that cost $100 a plate. Sure, it’s classy, but not everyone is in the mood for truffle pasta. BYD, on the other hand, is like an all-you-can-eat buffet at Golden Corral for $19.99. 

Whether you’re looking for an affordable ride like the Seagull (think a car that costs less than a couple of iPhones) or splurging on the luxury Yangwang U8 SUV complete with an onboard drone (because why not?), BYD’s got you covered.

And this strategy is paying off big time. In October alone, BYD sold 502,657 vehicles—opposed to Tesla only selling 463,000 vehicles in the entire third quarter. Unlike Tesla’s all-electric lineup, BYD’s mix of hybrids and full electrics is attracting a broad audience, especially in China, where buyers appreciate the variety.

China is the biggest EV playground in the world, with Europe and the U.S. trailing behind. And when it comes to dominating at home, BYD is the king of the sandbox. Thanks to Beijing’s trade-in incentives, BYD’s quarterly sales jumped 24%. In fact, one in every three EVs sold in China has BYD’s stamp on it. Tesla, bless its heart, also benefits from these government incentives, but in China’s competitive market, it’s like trying to sell bottled water at a waterfall.

You’d expect BYD’s eye-raising October sales (over 500,000 vehicles in one month alone) to have investors scooping up shares like they’re tickets to a surprise Morgan Wallen concert. Yet, BYD's stock actually dipped 2% last week. Why? It turns out that growth at breakneck speed can bring its own headaches. Rapid production increases often lead to quality control issues and supply chain bottlenecks. Plus, BYD’s aggressive expansion into overseas markets isn’t cheap; tariffs in regions like the EU are sky-high, practically stacking up like a Lord of the Rings novel, making it far from an easy profit path.

Shifting back to Tesla, the stocks had a slight wobble, dipping 7% this week after Elon added more numbers to his net worth, but investors still seem loyal to the brand. Maybe it’s his star power, (we all know he’s Tony Stark of the business world) or maybe it’s just that Tesla’s stock feels like a warm, familiar blanket in a cold market.

With just a few weeks left in the year, Tesla and BYD are neck-and-neck, battling it out for the title of top EV seller. Musk hinted that Tesla is on track to edge past last year’s 1.808 million deliveries, needing a strong Q4 with at least 515,000 more cars sold. 

Will BYD’s record-breaking sales and smorgasbord of EVs finally win over investors, or will Tesla’s enduring brand loyalty and Musk’s larger-than-life persona keep it at the forefront? One thing’s for sure: this rivalry is just getting started. 

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Stocks.News holds a position in Tesla.