Outsold By BYD and Toyota, Tesla Finds Allies Among Retail Investors

Recent electric vehicle sales data had already bruised Tesla, showing lower shipments in Europe, Australia, and China.

Then, on Monday, new data exposed an even wider world of pain: China’s EV leader BYD announced it topped $100 billion in annual sales last year, something Tesla has never achieved. And EVs by German rival Volkswagen outsold the Elon Musk-led firm on the Old Continent.

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BYD’s aggressive international ambitions have set off alarm bells among the western auto manufacturers and governments whose markets it views as the next frontier. Last fall, the EU slapped steep tariffs on Chinese carmakers — 17% for BYD, 18.8% for Geely and 35.3% for SAIC — after concluding they were distorting the market because Beijing’s subsidies allowed them to undercut competitors. The three firms are challenging the levies in European court.

In the meantime, expansion is undeterred. Last month, BYD raised $5.6 billion to fund its growth abroad, with new factories opened in Thailand and Uzbekistan last summer already helping the cause. In the first two months of this year, 16% of all car exports from China came from BYD and, last year, the automaker shipped more than 400,000 vehicles abroad, about 10% of the roughly 4 million cars it sold.

BYD also develops tech — large-scale lithium energy storage batteries, solar modules, and as of last week, a battery system that it claims can charge an EV in five minutes — which has accelerated concerns that it could undercut Tesla and legacy carmakers including Toyota and Volkswagen:

• On Monday, the Shenzhen-based company said revenue rose 29% last year to $107 billion, besting forecasts. Net income climbed 34% to $5.5 billion. BYD’s car sales in the fourth quarter totalled $28.8 billion, besting Tesla — which made $22.6 billion — for the first time.
• Austin, Texas-headquartered Tesla reported revenue of $98 billion in 2024, although it only sells fully electric vehicles while BYD sells hybrids, which remain popular in the Chinese market. However, retail investors have poured into Tesla stock hoping for a value buy — JPMorgan data shows $7.3 billion in inflows in the past two weeks, and Tesla rose 11% Monday.

All those buying the dip should be prepared to strap in, as Tesla is expected to announce its latest delivery figures next week — Goldman Sachs recently trimmed its quarterly target by 50,000 to 375,000 cars, suggesting shipments will fall more than 3% from Q1 2024.

EuroTrip Up: Last month, Tesla sold fewer than 16,000 vehicles in 25 EU countries, the UK, Norway and Switzerland, a 44% drop from February 2024, according to data compiled by Jato Dynamics researchers. Its market share, 18.4% last year, has fallen to 7.7% this year. In the meantime, Volkswagen’s EV sales rose 180% to roughly 19,500 cars.