U.S.-based Tesla TSLA and China’s BYD Co Ltd BYDDY are at the forefront of the electric vehicle (EV) market, locked in a fierce battle for dominance. In the fourth quarter of 2023, BYD dethroned Tesla in global EV sales for the first and only time, with a record-breaking 526,409 EVs sold, surpassing Tesla's 484,507. Since then, the rivalry between these EV titans has intensified. Although Tesla retained its title as the top EV seller for 2023 with 1.8 million deliveries, 2024 is shaping up to be a tightly contested race. As the companies fight for the title of 2024 EV leader, let's explore which stock — BYDDY or TSLA — offers the better investment opportunity right now.
The Battle for the 2024 EV Crown
BYD has been smashing records month after month. In November 2024 alone, BYD sold 506,804 new energy vehicles (NEVs), marking its second consecutive month of crossing the half-million mark. November deliveries included 305,938 plug-in hybrids (PHEVs) and 198,065 pure EVs. BYD has already surpassed its ambitious 2024 delivery target of 3.6 million vehicles, reaching 3.74 million sales through November. It has sold more than 1.5 million all-electric vehicles in the first 11 months of the year.
Meanwhile, Tesla delivered over 1.28 million units through September 2024. However, the company does not release monthly sales data, so the race remains unresolved until Tesla announces its year-end numbers. For 2024, TSLA expects only modest growth from 2023's 1.8 million deliveries.
Why BYD is Poised for Growth
BYD has built its success on cost-effective battery technology and a vertically integrated model that spans everything from mining to manufacturing chips and batteries. Its lithium iron phosphate (LFP) battery technology is not only more affordable but also offers enhanced safety and longevity.
BYD’s product lineup caters to a broad audience. Models like the Seagull and Denza are highly regarded for their affordability and range, while premium offerings such as the Yangwang brand cater to high-end consumers. The company’s hybrid and EV models, such as the Song and Qin series, are consistently among the best-selling vehicles in China. The launch of the DM 5.0 hybrid system and e-Platform 3.0 underscores its focus on affordability, efficiency and enhanced charging capabilities.
The company’s footprint extends across Asia, Europe and Latin America, with notable inroads in Japan, Australia and Singapore. Initiatives like its partnership with Uber to add 100,000 EVs to the ride-hailing platform underscore its ambition.
BYD’s rapid growth is backed by its operational efficiency. In November 2024, the company rolled out its 10 millionth NEV — a milestone that reflects its dominance in the global market. The company's diversified lineup, affordable options and strong support from China's EV ecosystem are driving its success.
Why Tesla Remains a Powerhouse
Tesla’s scale in EV manufacturing is unparalleled, enabling cost efficiencies that few rivals can match. Despite potential challenges, such as reduced subsidies under a Trump administration, Tesla’s robust operating model allows it to thrive without significant government support.With CEO Elon Musk forecasting overall vehicle deliveries to grow between 20% and 30% next year, Tesla’s future looks promising, especially as gross margins start to improve.
The company’s innovations go beyond vehicles. Its thriving Energy Generation and Storage segment, featuring products like the Megapack and Powerwall, is driving strong revenue growth. This segment stands out as Tesla's most lucrative, boasting the highest margins. With ongoing efforts to ramp up production at the Megapack factory to meet escalating demand, this unit is a significant catalyst for TSLA.
Tesla's charging division is set to boost profitability with more than 60,000 global supercharger connectors currently. Major automakers are adopting Tesla's North American Charging Standard, making the business a significant potential revenue stream.
Tesla’s robust balance sheet, with a high liquidity buffer, supports continued innovation and expansion. Progress in the autonomous vehicle domain, including plans to launch robotaxi services in 2025, positions the company well for sustained growth.
What Do Estimates for BYDDY & TSLA Say?
The Zacks Consensus Estimate for BYDDY’s 2024 sales and EPS implies year-over-year growth of 25% and 31.5%, respectively. For 2025, the consensus mark for sales and EPS points to growth of another 20.5% and 24%, respectively, from the projected 2024 levels. Estimates for 2024 and 2025 EPS have moved north over the past 30 days.
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The Zacks Consensus Estimate for TSLA’s 2024 and 2025 sales calls for a year-over-year increase of 3% and 17.4%, respectively. While EPS estimates for 2024 suggests a 20.8% contraction on a yearly basis, the bottom line is expected to grow 32.4% in 2025. Estimates for the first quarter of 2025 and the full year have moved north over the past seven days.
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Image Source: Zacks Investment Research
BYD Trading Cheaper Than Tesla
BYDDY is trading at a forward sales multiple of 0.78X, below its median of 1.47X over the past five years. TSLA’s forward sales multiple sits at 10X, above its median of 7.23X over the last five years.
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Image Source: Zacks Investment Research
TSLA & BYDDY: Both Are Solid Buys
Both Tesla and BYD present compelling investment cases. BYD’s cost leadership, diversified portfolio, and growing international presence make it a standout player in the EV market. It is also attractively valued. In terms of shareholder rewards, BYD has a dividend yield of 1.54%, offering an additional income stream.
Tesla, focused on reinvesting for growth, does not pay dividends. But its EV and AV strides, energy storage business, and global brand recognition offer long-term potential. Tesla is much more than just a car manufacturer and remains a solid pick for investors who prioritize innovation, scale and long-term growth.
Both stocks currently sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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