Tesla & BYD competitor or cooperator?

Tesla (TSLA) and BYD Co. (BYDDF) are both fast-growing EV giants. While a lot of attention falls on startups such as Rivian Automotive (RIVN), Lucid (LCID), Nio (NIO), Xpeng (XPEV) and Li Auto (LI), as well as traditional automakers pushing into EVs, such as General Motors (GM) and Ford Motor (F), Tesla and BYD are setting the pace.

Including plug-in hybrids, BYD has surged past Tesla sales. It's closing the gap on BEVs, with sales soaring yet again in November. BYD continues to open new plants, with plans for its first factories outside China, including Thailand, Brazil and, soon, Europe.

Tesla China sales, including exports, hit a record in November following recent Shanghai capacity increases. But Tesla is offering fresh China price discounts amid increasing reports that it plans to slash or even suspend Shanghai output.

Tesla Vs. BYD Sales

Tesla reported Q3 deliveries of 343,830 cars, up 42% vs. a year earlier and above Q1's record 310,048. But that was below analysts' estimates of above 360,000. Tesla produced 365,923 vehicles in the latest quarter, more than 22,000 above deliveries.

Tesla cited logistical challenges and vehicles in transit for the deliveries shortfall. But that appeared to reflect a last-minute shift to exporting Shanghai-made vehicles early as China demand slowed.

Tesla delivered 325,158 Model 3 and Model Y vehicles in Q3, along with 18,672 Model S and Model X luxury EVs.

BYD sold 230,427 all-electric and plug-in hybrid vehicles in November, up 153% vs. a year earlier and 5.8% vs. October. That includes 229,942 personal vehicles and 485 commercial units. Of those personal vehicles, some 113,915 were fully electric, or battery electric vehicles (BEVs), up 147% vs. November 2021. Plug-in hybrids shot up 164% to 116,027.

Over the past three months, BYD has sold 649,502 BEVs and PHEVs, including 312,013 BEVs.

In the first 11 months of 2022, BYD's sales vaulted 132% to top 1.62 million vehicles.

BYD's 90%-owned Denza unit reported sales for the first time, with 350 Denza D9 minivans sold in October and 3,481 in November. The D9, which comes in BEV and PHEV formats, starts around $50,000. Denza sales appear to be included in BYD's sales figures. Mercedes-Benz owns 10% of Denza.

BYD Vs. Tesla: Tesla Electric Vehicles

Tesla mass produces four electric vehicles: the luxury Model S sedan and Model X SUV as well as the Model 3 sedan and Model Y crossover. The vast majority are the Model 3 and Model Y, with the Model S and X largely limited to North America for now.

On Dec. 1, the first Tesla Semi deliveries took place. with PepsiCo (PEP) the first customer. The Tesla Semi was first unveiled in 2017. But the Tesla Semi will not use 4680 batteries. raising questions about costs. It's also unclear if the Semi will be produced in volume or in token amounts.

The Roadster and Cybertruck also have been pushed back multiple times. Musk says the Cybertruck is on track for "early" production mid-2023, with a Reuters report saying mass production will start at the end of 2023.

Tesla is finally hiring specifically for the Cybertruck. But prices and specs — ambitious even compared to other Tesla vehicles — will likely be different from the initial Cybertruck claims back in 2019, he says.

The Cybertruck likely will largely serve the U.S. market. So Tesla may not have a new passenger EV for most of the world until 2024 or later.

Tesla may be updating its Model 3 sedan, with the goal of lowering production costs and improving its appeal. The "Highland" redesign reportedly will include some changes to the interior and exterior, as well as possible change to the powertrain.

Model 3 sales have flattened out, in part due to people opting for the Model Y crossover but also due to competition from the BYD Seal, Nio ET5 and many more.

Tesla's Shanghai factory reportedly will begin production of the updated Model 3 in Q3 2023, though it's not clear when the Fremont plant might do so.

Tesla had significant production issues at the Fremont factory as it updated the Model S and X, adding the Plaid versions.

Musk also recently stated that Tesla is working on a much-cheaper EV, signaling a possible return to a long-touted goal of a $25,000 vehicle. However, he gave no timeline. Even now, such a model would run into dozens of existing rivals, mostly from Chinese EV makers such as BYD.

BYD Vs. Tesla: BYD EVs Big And Small

BYD has a slew of models, some with electric and hybrid versions. The automaker is rolling out several new EV-only and hybrid-only models in the next several months.

The Seal sedan is BYD's first clear head-to-head competition vs. Tesla. The BYD Seal has roughly equal dimensions and range to a Model 3 — and is far cheaper. The Seal starts at 212,800 RMB ($29,617) vs. 265,900 RMB ($37,007) for a made-in-China Model 3, even after Tesla's price cuts.

Many EV makers are likely to cut prices in early 2023, after China subsidies end.

BYD started Seal deliveries in late August, with deliveries reaching 11,267 in October. Production is set to keep ramping up and will reach many overseas markets in 2023.

BYD unveiled Frigate 07, a mid-size SUV that's the second model in the Warship line of plug-in hybrids. The Destroyer PHEV sedan launched this spring.

BYD also is one of the biggest makers of electric buses, with plants in the U.S. and many other countries besides China. BYD also makes EV delivery trucks, big rigs, garbage trucks and more.

BYD makes buses, big rigs and other heavy vehicles for the U.S. market

Tesla Vs. BYD Batteries

Tesla doesn't mass produce battery cells. The Sparks, Nevada, gigafactory is a joint venture with Panasonic, which makes the cells. In China and increasingly in the U.S., Tesla buys off-the-shelf batteries from CATL.

It's increasingly shifting to lithium iron phosphate batteries. LFPs have some cost advantages, which have grown because they don't require any cobalt or nickel, unlike lithium-ion batteries.

Tesla has long led in getting more out of its batteries, though the high-end Lucid Air has higher battery efficiency than Tesla.

Tesla is developing its own 4680 battery cells in a pilot program. The 4680 batteries don't involve new chemistry. The larger form factor offers the potential for cost savings, but technical challenges remain.

BYD batteries, by contrast, are truly in house. The BYD Blade batteries, a specialized LFP battery, are seen as among the safest available for EVs.

BYD also is working on sodium-ion batteries, which offer lower range but would be much cheaper. They could be  useful for small-range vehicles or for storage, where energy density is less of an issue.

BYD is now supplying Blade batteries to Tesla Berlin. It's a major validation, as BYD aims to be a major battery supplier to third-party automakers.

The made-in-China Ford Mustang Mach-E uses BYD batteries.

Toyota (TM) will use BYD batteries and motors in an upcoming small EV for the Chinese market, the bZ3. BYD may be actively involved in Toyota's wider EV push in the coming years.

BYD and Tesla are on the forefront of automakers trying to lock up supplies of lithium and other key battery raw materials.

Musk has discussed Tesla getting involved in lithium mining, but hasn't done so. Tesla has proposed a lithium processing plant in Texas.