(Bloomberg) — Tesla Inc. and BYD Co. Set new sales records in the second quarter and become the world’s best-selling clean vehicle manufacturer.
Most Read from Bloomberg
Elon Musk-led Tesla delivered 466,140 cars worldwide in results released Sunday, beating Wall Street estimates. BYD, China’s biggest-selling car brand, posted best-in-class quarterly sales results of 700,244 new energy vehicles — half fully electric sales, and the rest plug-in hybrids.
Shares of BYD rose as much as 3.2% in Hong Kong on Monday morning. Tesla battery suppliers Contemporary Amperex Technology Co. Ltd and LG Energy Solutions Ltd rose 2.3% and 3.1% respectively on Monday.
Tesla’s results showed CEO Musk’s vow to chase volume by lowering prices is having the intended effect. Analysts polled by Bloomberg had expected the company to ship 448,350 cars in the quarter.
“It’s a big beat,” Ben Gallo of Robert W. Baird said in a phone interview Sunday morning. “People are still ready for another round of price cuts, and this big supply number makes that less of a risk.”
Austin-based Tesla’s deliveries were the highest ever in a quarter, and were up 83% from a year ago. The company also managed to narrow the gap between production and deliveries – a figure closely watched by analysts – to 13,560 units in the second quarter. In the first quarter, it produced nearly 18,000 more cars than it delivered to customers.
“Everybody was worried about building inventory, and it looks like they’ve become normal,” Gallo said. “The delta between production and distribution is shrinking, which is what Tesla said they would do.”
Tesla, which sells cars directly to customers, has a lot of levers to move vehicles. Apart from slashing prices across the lineup earlier this year, the company introduced offers like three months of free fast charging in the US for cars delivered before June 30. Analysts predict that price cuts will continue into next year.
Read more: Tesla closes another delivery record after price cut
Tesla did not break down its quarterly delivery numbers by individual vehicle type or region. Models 3 and Y account for 96% of sales. Tesla also makes the Model S and X.
Tesla is still the largest EV maker in the U.S., but it faces new competition around the world. It’s latest vehicle – the Model Y – debuted in 2020.
In China — its No. 2 market — the company lags far behind BYD, which has a much newer lineup and increasingly global ambitions. Tesla announced last week that it will cut prices of its premium car models in China by more than 4.5%, following last month’s decision to offer cash subsidies to buyers of its Model 3 vehicles.
Also Read: Watch Asia EV Shares After Top Ratings on Tesla Deliveries
Tesla will report second-quarter earnings on July 19.
A closer look at who leads sales of all-electric vehicles shows that Tesla has extended its lead over BYD, with the Chinese maker continuing to grow globally with its affordable offerings.
However, Shenzhen-based BYD’s quarterly sales – extrapolated from monthly data – grew 98% from a year earlier. The surge marks a reversal from the weak first quarter of the year. Its previous best quarter was the last three months of 2022, and the company sold 251,685 new energy vehicles in June.
Small Chinese upstart Li Auto Inc. It posted a new monthly high of 32,575 deliveries, while Xpeng Inc. and Nio Inc. have seen a moderate increase. Guangzhou Automotive Group Co. ’s EV brand Aion stood out with another strong month of sales with 45,013 deliveries.
June sales “show that new energy vehicle demand is very strong” despite China’s economic drag, said Jonah Chen, autos and EV batteries analyst at Bloomberg Intelligence.
–With help from Charlotte Yang.
(Third column adds stock price reaction)
Most read from Bloomberg Businessweek
©2023 Bloomberg LP