BYD Keeps Delivering on Tesla’s Unkept Promises

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I recently read Steve Hanley’s excellent article on the woes of Tesla and found the closing insightful:

“Tesla is like the boy who cried wolf. Every time it makes promises it doesn’t keep, its reputation suffers. Most major corporations care passionately about their reputation, but such things do not seem to concern the great and powerful Musk or the Tesla board of directors.”

Tesla’s recent financial announcement has added to the unkept promises, while the followup call added another wave of promises to distract from the results.

At the same time, I have been following the coverage of the Shanghai Auto Show. Much of the information leading up to the show was a bit sparse, but we have seen multiple new, significant models launched by BYD. However, before major future promises are made, we tend to see actual product, with delivery shortly thereafter.

That made me think a bit about Tesla’s frequent promises and BYD’s consistent delivery … often delivering on Tesla’s promises better and faster than the company that made the promises to begin with.

The Affordable Car

Back at the start of this decade, Tesla indicated that a Model 2 or Q or whatever it would be called was coming at a price of $25,000. Multiple announcements and shifts happened in the following years.

Then, after delays and apparent cancelled plans, Elon went on to call that car “pointless” and “silly.”

Meanwhile, BYD’s average selling price (ASP) was $16,700 last year. At the low end of the spectrum, BYD has dropped the price of its entry level Seagull to ~$7,800, or less than ⅓ of the $25,000 car promised.

Going back even further to when the Model S was launched, Tesla also indicated that what became the Model 3 would be less than $30,00, but the company still hasn’t delivered. Meanwhile, BYD recently started deliveries of the Han L EV, which is larger, better equipped, and far more advanced than the Model S for less than $30,000.

Some may say that Tesla meant to include the tax credits or that we should include inflation over the extended delays. But BYD is delivering on affordability without excuses. A new stripped down Telsa Model Y promised for later this year might finally drop below $30,000, but it will be up against flagship models from other brands in China at the same price point. And that vehicle is also reportedly delayed.

50% Compound Annual Growth Rate

In early 2021, Tesla promised investors a 50% Compound Annual Growth Rate (CAGR). By late 2023, it was becoming increasingly apparent that Tesla was not going to maintain that level of growth. Now, with a sales drop in 2024 and sales continuing to drop beyond diminishing expectations, 50% growth seems unrealistic.

Meanwhile, BYD’s growth from just 189,689 NEV sales in 2020 to 4.27 million last year represents a 118% CAGR. BYD never promised an average growth rate of 50%. However, if it simply maintains its 2024 sales rate in 2027, that would still be over 50% CAGR from 2020. There is also a reasonable likelihood that BYD will grow to over 7.5 million in sales by 2029 for a 50%+ CAGR from 2020. Growing from there becomes challenging, as BYD would be competing for the title of largest automaker in the world. However, BYD keeps exceeding sales expectations, so we will have to wait and see.

At the same time, BYD’s financial performance continues to exceed expectations, increasing profits while model prices decline and equipment levels rise. Preliminary numbers indicate net profits will roughly double YoY in Q1. All while introducing more than twice as many new vehicles as Tesla has in total, and refreshing over four times as many vehicles with intelligent driving in Q1. In comparison, Tesla’s recent financial announcement underperformed diminished expectations. Earnings plummeted and, if not for regulatory credits, Tesla would have lost money.

Autonomous Driving Across the Country

Back in 2017, Elon claimed that a Tesla would drive from LA to NYC without driver intervention. That still hasn’t happened. Tesla has also had to stop calling its software “Full Self Driving” and “Autopilot” in China as regulators clamp down on misleading marketing claims.

Meanwhile, on their base “God’s Eye C” system, BYD took media on a 7000+km highway trip with 0 driver interventions through 21 cities and a wide variety of weather — an equivalent distance of driving from LA to NYC and then turning south to Key West before running out of road.

Sportscar

Back in 2017, Tesla started taking orders for the new Tesla Roadster, promised for 2020 but still not delivered. Tesla is still taking reservations.

Meanwhile, the jumping U9 supercar is already on the road at a comparable price point to what Tesla promised for the Roadster, with updates for this year recently posted to MIIT regulatory filings.

BYD also has a second sports car that was just revealed under the Denza brand. The teaser image included 1.?s, which is expected to mean acceleration to 100 km/h in less than 2 seconds.

No powertrain details were promised, but the rumor (unverified leaks) in Chinese media is that the car will have 230 kW on the front axle and dual 480 kW motors on the rear, which works out to a total of ~1600 hp. A horizontally opposed PHEV version might also be possible, based on patent drawings. The car is anticipated to be available with hardtop and convertible options, while being priced from 300,000–500,000 RMB (~$41,000–$68,000). In other words, it has Bugatti Chiron power levels for roughly half the price of a Porsche 718 in China. As we do not have a MIIT regulatory filing yet, and the car revealed is considered a concept car, it might be a little longer than usual to go from reveal to delivery. But if BYD delivers as anticipated (but not yet promised), it could be impressive.

… And There’s More

While the Tesla Semi still hasn’t reached mass production, BYD is building upon its commercial vehicle growth with the recent launch of the new generation Q3 semi with battery options for longer-distance applications.

By Larry Evans