Tesla, BYD Post Record Sales on Demand for Electric Vehicles

Tesla Inc. and BYD Co. set sales records in the second quarter, widening their lead as the world’s best-selling electric-car makers.

(Bloomberg) — Tesla Inc. and BYD Co. set sales records in the second quarter, widening their lead as the world’s best-selling electric-car makers.

Elon Musk-led Tesla delivered 466,140 cars worldwide, outpacing Wall Street estimates. BYD, China’s top-selling car brand, posted its best-ever quarterly sales results of 700,244 new-energy vehicles — half fully electric sales, and the other plug-in hybrids.

BYD’s shares jumped as much as as 3.2% Monday morning in Hong Kong. Tesla battery suppliers Contemporary Amperex Technology Co. Ltd. and LG Energy Solution Ltd. rose as much as 2.3% and 3.1% Monday respectively before paring gains.

Tesla has vowed to push for more volume even at the expense of profit margin. Analysts surveyed by Bloomberg had expected the company to ship 448,350 cars in the quarter.

“It’s a big beat,” Ben Kallo, a Robert W. Baird analyst, said by phone Sunday. “People were still bracing for another round of price cuts, and this big delivery number makes that less of a risk.”

The deliveries are the most ever in a quarter for Austin-based Tesla, and an 83% increase from a year ago. The company produced 13,560 more vehicles than it delivered in the quarter. Output exceeded sales by almost 18,000 cars in the first quarter.

“Everyone was worried about inventory build, and it looks like they’ve normalized,” Kallo said. “The delta between production and deliveries is shrinking, which is what Tesla said they would do.”

Tesla sells its cars directly to consumers and has a lot of levers to move vehicles. In addition to cutting prices across the lineup this year, the company has introduced perks such as three months of free fast-charging in the US to entice buyers. Some analysts have predicted price cuts will continue into next year.

Read More: Tesla Closes In on Another Deliveries Record After Price Cuts

Tesla doesn’t break out its quarterly delivery numbers by individual vehicle type or region. The Models 3 and Y accounted for 96% of sales. Tesla also makes the Model S and X.

Tesla is still the largest EV maker in the US, but it’s facing stiff competition around the world from companies with fresher lineups. It newest vehicle — the Model Y — debuted in 2020.

In China — Tesla’s No. 2 market — the company has fallen well behind BYD, which has increasingly global ambitions. Tesla announced last week that it was cutting prices of its premium car models in China by more than 4.5%, following a decision to hand out cash subsidies to some buyers of its Model 3 sedan.

Read more: Watch Asia EV Stocks After Tesla Tops Estimates on Deliveries

Tesla will report second-quarter earnings on July 19.

BYD Record

BYD gained ground on Tesla in fully electric vehicle sales, which almost doubled from a year ago to 352,163 units in the second quarter.

The Shenzhen-based company’s total sales grew 98% from a year ago. BYD’s previous best quarter was the last three months of 2022, and the company sold a record 251,685 new energy vehicles in June. 

Smaller Chinese upstart Li Auto Inc. posted a new monthly high of 32,575 deliveries, while Xpeng Inc. and Nio Inc. saw modest increases. Guangzhou Automotive Group Co.’s EV brand Aion stood out with another strong month of sales, with 45,013 deliveries.

June sales “are showing new energy vehicle demand remains pretty strong” despite China’s economic drag, said Joanna Chen, a Bloomberg Intelligence autos and EV batteries analyst.

–With assistance from Charlotte Yang.

(Adds share price reaction in third paragraph)

More stories like this are available on bloomberg.com

©2023 Bloomberg L.P.