Tesla Shifts Gears to Overtake BYD as Chinese Giant Stalls Amid Price War

Chinese EV giant BYD (SZ:002594) (HK:1211) experienced a slowdown in the first quarter of 2024, raising concerns despite a net income increase of 10.6% year-on-year to 4.57 billion yuan ($632 million).

While revenue reached 124.94 billion yuan ($17.3 billion), representing a 4% increase year-on-year, it fell short of analyst expectations by roughly $1 billion and marked the lowest annual growth rate in the past four years.

BYD's struggles extend to sales, with only 300,000 battery-powered cars sold in Q1, significantly lower than the record 526,000 in Q4 2023. This decline resulted in Tesla reclaiming the global electric car sales crown after BYD's brief leadership.

Meanwhile, Tesla (NASDAQ:TSLA) started 2024 with job cuts and disappointing results. However, recent announcements like the earlier-than-expected arrival of a new low-cost model and a partnership with Beijing for autonomous driving technology in China have boosted investor sentiment, pushing the stock price up over 8% in the past month.

Both companies now face a fierce battle for market share, which will likely impact their stock performance.

BYD's Outlook: Analysts Remain Bullish/h2

Despite the recent stumbles, analysts remain largely optimistic about BYD's future.

Source: InvestingPro

While the stock's fair value is estimated at $41.79 per share, representing a 45.2% increase from its current price, the average target price among analysts is set at $36.96 per share, suggesting strong potential for growth.

Tesla's Stock: Neutral Sentiment with Some Upside Potential/h2

Tesla's stock currently faces a more neutral sentiment, with a fair value of $183.23 per share and an average target price of $181.85.

Source: InvestingPro

However, some analysts predict a significant rise, with Cantor Fitzgerald initiating coverage with an "overweight" rating and a $230 target price.

Conclusion/h2

While Tesla has regained the electric car sales lead, BYD's strong analyst support and potential for future growth make it a compelling investment option. Both companies offer exciting opportunities, but investors should carefully consider their individual risk tolerance and investment goals before making a decision.

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