BYD overtakes Tesla in revenues: the challenge to Musk comes to a head

For the first time, BYD has surpassed Tesla in terms of quarterly revenue. The Chinese carmaker reported sales of $28.2 billion in the quarter ending 30 September, up 24% year-on-year. This result, although lower than analysts' estimates, exceeded the $25.2 billion in sales reported by Tesla in the same period.

Net profit was $1.6 billion, an all-time record for the company, for a gross margin of 21.9%. These results were driven by record sales of 1.12 million electric vehicles and plug-in hybrids. Although net profit is still lower than Tesla's $2.2 billion, the Shenzhen giant's growth is impressive, especially against a backdrop of slowing global demand for electric vehicles.

The success of BYD, which has a much broader and more recent model range than Tesla, can be attributed to several factors. Foremost among them: the vertical and integrated supply chain: BYD manufactures many of its vehicle components in-house, gaining an advantage in terms of cost and scale. And technological innovation: BYD invests in advanced battery and propulsion system technologies, offering vehicles with competitive range and performance.

Tesla, for its part, is facing some challenges. Products with a few too many years under their belt, it was said, excluding the Cybertruck, which is by no means the best-seller. The range is less diversified than at BYD, and the focus is mainly on future robotaxis and the development of the Full Self-Driving system. Finally, the dependence on the Western market: Tesla is more exposed to demand fluctuations in Western markets, while BYD benefits from the growth of the Chinese market.

BYD and Tesla have jointly become two major threats to traditional car manufacturers, which are struggling to achieve profitability in the transition to electric vehicles. The competition between the two electric giants is getting fiercer and fiercer, and BYD's overtaking in quarterly revenues marks a new chapter in this challenge.