Tesla and BYD post record sales on increase in demand for electric cars

(Bloomberg) — Tesla Inc. and BYD Co . set sales records in the second quarter, extending their lead as the world’s best-selling electric car manufacturers.

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Elon Musk-led Tesla delivered 466,140 cars worldwide, beating Wall Street estimates. BYD, China’s best-selling car brand, posted its best quarter ever, selling 700,244 all-electric and plug-in hybrid vehicles.

Tesla’s shares rose more than 6% in premarket trading in the US, while BYD’s rose as much as 5% in Hong Kong. The shares of EV battery suppliers Contemporary Amperex Technology Co. Ltd. and LG Energy Solution Ltd. also went further.

Tesla has vowed to push for more volume, even if it comes at the expense of profitability, putting more pressure on older automakers that haven̵[ads1]7;t kept up with EVs and have lost market share. Volkswagen AG last week announced new management for the Audi brand, which fell behind Tesla in the first quarter.

Analysts surveyed by Bloomberg had expected Tesla to deliver 448,350 cars in the past three months.

“It’s a big beat,” Ben Kallo, a Robert W. Baird analyst, said by phone Sunday. “People were still preparing for another round of price cuts, and this big delivery number makes it less of a risk.”

The deliveries are the most ever in a quarter for Austin-based Tesla, and an 83% increase from a year ago. The company produced 13,560 more vehicles than it delivered in the quarter, after production exceeded sales by nearly 18,000 vehicles in the first quarter.

“Everybody was worried about stockpiling, and it looks like they’ve normalized,” Kallo said. “The gap between production and deliveries is shrinking, and that’s what Tesla said they would do.”

As well as cutting prices across the range this year, Tesla has introduced benefits such as three months of free fast charging in the US to entice buyers. Some analysts have predicted price cuts will continue into next year.

Read more: Tesla approaches another delivery record after price cut

Tesla does not break out its quarterly delivery numbers by individual vehicle or region. Model 3 and Y accounted for 96% of sales last quarter. Tesla also makes the Model S and X.

Tesla is by far the best electric car maker in the US, but it faces stiff competition worldwide from companies with newer lineups. The newest vehicle – the Model Y – debuted in 2020.

In China – its No. 2 market – the company has fallen well behind BYD, which has increasingly global ambitions. Tesla announced last week that it was cutting the prices of its premium car models in the country by more than 4.5%, following a decision to hand out cash subsidies to some buyers of its Model 3 sedan.

Read more: Watch Asia EV stocks after Tesla tops delivery estimates

Tesla will report results for the second quarter on July 19.

World record

BYD gained ground on Tesla in sales of all-electric vehicles, nearly doubling deliveries from a year ago to 352,163 units in the second quarter.

The Shenzhen-based company’s total sales rose 98% from a year ago. BYD’s previous best quarter was the last three months of 2022. The company sold a record 251,685 new energy vehicles in June.

Smaller Chinese upstart Li Auto Inc. posted a new monthly high of 32,575 deliveries, while Xpeng Inc. and Nio Inc. saw modest gains. Guangzhou Automotive Group Co.’s EV brand Aion stood out with another strong sales month, with 45,013 deliveries.

June sales “show that demand for new energy vehicles is still quite strong” despite China’s economic woes, said Joanna Chen, an auto and electric vehicle analyst at Bloomberg Intelligence.

–With assistance from Charlotte Yang.

(Updates with Tesla shares are moved to the third paragraph.)

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