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Tesla vs BYD: Who will win?

Tesla vs BYD: Who will win?

Tesla and BYD both aim to expand global footprints by diversifying production

The automotive industry’s eyes have been on Tesla and BYD as electrification persists. Tesla has maintained a significant lead in profitability while facing mounting pressure from BYD and other Chinese EV makers.

As Tesla waits for the second growth wave, BYD is aggressively laying the foundation for its global scale-up. The development of the EV industry going forward promises to be interesting.

In 2023, BYD delivered over three million EVs, including battery EVs (BEV) and plug-in hybrid EVs (PHEV), accounting for 31% of China’s EV sales. The carmaker surpassed Tesla in BEV volume for the first time in the fourth quarter of last year.

Tesla tallied record deliveries with more than 1.8 million BEVs by prioritizing sales over profits. The company’s top-selling Model Y accounted for around 67% of deliveries.

When comparing the 2023 financial performance of the two biggest EV makers, Tesla continued to stay ahead with higher revenue and superior net profit. The company’s more expensive vehicles were the primary factor, and a lower cost of goods per vehicle in the fourth quarter also helped.

2023 financial performance: BYD vs. Tesla (US$ billion)







Operating profit



Net profit



R&D expense



R&D expense/revenue (%)



Source: BYD and Tesla, compiled by DIGITIMES Asia, April 2024

Striving to accelerate smart vehicle technology development, BYD injected close to US$5.5 billion into R&D last year, significantly higher than Tesla’s US$3.97 billion. BYD said its R&D expense increased by 112.15% from 2022 due to elevated salary payments and material consumption.

BYD ramps up deliveries but profitability still lagging

Thanks to the rising EV adoption prompted largely by stimulus measures in major car markets, BYD and Tesla started to experience significant delivery growth in 2021. Ceasing its production of gasoline cars in March 2022, BYD saw its delivery increase by 61% from 2022 to 2023.

Tesla’s delivery grew by 87% between 2020 and 2021. However, the company has subsequently maintained a lower growth rate than BYD.

Although BYD became the world’s largest BEV manufacturer in the fourth quarter of last year, it returned the title to Tesla in the first quarter of 2024. The Chinese company made slightly over 300,000 BEVs, while its US counterpart produced over 386,000 cars.

Source: BYD and Tesla, compiled by DIGITIMES Asia, April 2024

In the past five years, BYD and Tesla saw steady revenue growth as EV adoption and deliveries went upward. In terms of net profit, Tesla came out of the red in 2020 and reached the billion level the following year with Its profit growing by 127.5%, from 2021 to 2022.

BYD welcomed its most considerable net profit growth, 445%, in 2022 after going EV only in March of the same year. However, profitability lagged far behind that of Tesla, and in 2023, Tesla’s net profit was 3.6 times that of BYD.

Source: BYD and Tesla, compiled by DIGITIMES Asia, April 2024

Tesla waits for the second growth wave

About 18 months after it began making EVs exclusively, BYD became the world’s first automaker that produced six million EVs. Tesla reached the same milestone four months later. The two companies keep competing with their very different product portfolios.

Tesla offered four BEVs before adding the Cybertruck late last year. The pickup truck will take some time before it starts to drive the company’s growth.

In contrast, BYD has rolled out more than two dozen EVs, (including BEVs and PHEVs) under the Denza, Yangwang, and Fangchenbao brands in addition to the flagship BYD brand. The automaker’s product lineup covers both the mass and premium markets.

As BYD scales aggressively inside and outside China, Tesla has alerted investors that its vehicle volume growth rate in 2024 may be notably lower than its 2023 achievements. The company explained that it is between two major growth waves.

The first wave came with adopting the Model 3/Y platform. The second wave is expected to arrive when Tesla launches the next-generation vehicle platform.

Source: BYD and Tesla, compiled by DIGITIMES Asia, April 2024

Tesla and BYD both aim to expand their footprints worldwide by diversifying production. Tesla localized its production in China and Germany a few years before BYD started an overseas offensive recently.

The US company is expected to officially begin constructing a new Gigafactory in Mexico. The plan follows a migration of the company’s suppliers to the country.

Tesla plans to expand its Gigafactory near Berlin. However, it will have to deal with local and environmental protestors before proceeding with the project.

In addition, the company’s expansion in India is highly anticipated after New Delhi decided in March to cut tariffs on imported EVs for companies that promise to produce the vehicle locally within three years.

BYD will soon finish construction at its Thailand plant, the company’s first passenger car facility outside China. The automaker has also started building an EV production complex in Brazil and announced its European plant in Hungary.

In addition, BYD is exploring sites for its Mexican expansion. The move is which is critical to developing the North American market.