How far is BYD ahead of Tesla?

2021, the first year of new energy vehicles. Tesla has sold 940,000 vehicles, and no one seems to be able to catch up with Musk's devilish pace.

But the people who challenged Musk eventually appeared. He is BYD Chairman Wang Chuanfu.

Just this past February, BYD Automobile's domestic sales surpassed SAIC Volkswagen, and it was close to the position of boss.

This is not final. BYD's sales surge relies on new energy vehicles. Its ambition is to surpass the current electric king Tesla and become the boss of the new world in the future.

After electric vehicle sales were surpassed by Tesla three years ago, this year will be a key year for BYD to turn around.

15 years ago, Wang Chuanfu proposed to be the world's first in the automobile industry. Over the past two years, BYD's soaring stock price and nearly trillion-dollar market capitalization have proved the value of his dream, an exciting picture of modern industry and business that investors are happy to see.

However, BYD is also facing problems such as capacity constraints and brand high-end, especially production capacity, which has become the key to whether BYD can surpass Tesla.

At present, BYD must break upwards, show itself to the world, and prove itself. It's a game of racing against time and against the mighty.

ambition

This is the closest month wang Chuanfu has been to his dream.

According to the data of the Association, in February this year, BYD's retail sales of automobiles surpassed SAIC Volkswagen and ranked second, second only to FAW-Volkswagen.

In addition, there were five car companies with wholesale sales of new energy vehicle manufacturers exceeding 10,000 units in February, WITHD ranked first with 88,000 units, followed by Tesla China with 56,500 units.

BYD's monthly sales surpassed SAIC Volkswagen and Tesla, and new energy vehicles contributed to it.

According to the data, its total sales in February were 91,000 units, up 335% year-on-year, of which sales of new energy vehicles exceeded 88,000 units, a year-on-year surge of 753%, and it has exceeded 80,000 units for five consecutive months.

In the first two months of this year, new energy vehicles accounted for more than 97% of ATD's total model sales, and last year this proportion was still about 81%.

In December last year, BYD also gave a clear timetable for the suspension of fuel vehicles. Now this node seems to be much earlier.

It is worth noting that BYD achieved the above results under the off-season.

Yu Te, an auto analyst at Tianfeng Securities, pointed out that February is usually the off-season for automobile sales, coupled with the decline in subsidies for new energy vehicles this year, and the continuous rise of battery raw materials, the overall market situation is not conducive to sales.

The data from the Multiplication Association confirms this. Wholesale sales of new energy passenger vehicles reached 317,000 units in February, up 189.1% year-on-year and down 24.1% month-on-month.

Coupled with the lack of core and lack of electricity, production capacity constraints and other factors, "Wei Xiaoli" delivery in February is not good. Among them, the ideal delivery of 8414 vehicles in February, down 45.8% month-on-month; WEILAI delivered 6131 vehicles, down 57.42% month-on-month.

Bydir took advantage of its own batteries and chips to achieve a counterattack in February.

For a long time, in the monthly sales list of new energy vehicles in China, BYD has ranked first for 9 consecutive months. So much so that BYD's "iron powder" Citibank predicts that BYD's sales will surpass Tesla's in 2023.

This is indeed Wang Chuanfu's goal. Last year, BYD sold 59 new energy vehicles, "this year's sales are expected to be 1 million guaranteed, more than 1.5 million units is the initial small target," said an institutional source familiar with BYD.

On the issue of sales and capacity planning goals, BYD told Wall Street That the company is actively increasing production capacity, and the specific information is inconvenient to disclose.

If sales reach 1.5 million units, BYD could overtake Tesla this year and next to become the new global king of electric vehicles.

At the same time, BYD may also surpass FAW-Volkswagen. Wang Chuanfu's dream of becoming China's "car brother" has also come true.

It won't be an easy battle. Tesla sold 940,000 units worldwide last year, compared to BYD's 620,000 units; and this year Tesla also has plans to expand production capacity, and is expected to sell more than 1.5 million vehicles in the whole year.

Faw-Volkswagen, on the other hand, sold more than 1.7 million vehicles last year.

Cui Dongshu, secretary general of the Association, expects that China's new energy vehicles will continue to develop rapidly this year, and annual sales are expected to reach 5.5 million, an increase of 60% year-on-year.

The boom continues, and for BYD, this year will be a key year to determine whether it can become the number one in the industry.

Dilemma

2 Behind the performance of moon eyes, the pressure on BYD is not small.

Although BYD can produce its own chips and batteries, and has a certain ability to control costs, at present, production has still become the main constraint on sales, and it is the biggest "roadblock" on the road to BYD's king.

BYD's sales of new energy vehicles have risen sharply in the past year, and the DMi series has contributed to it. Some industry insiders have analyzed that this series can be green carded, unlimited number, free of purchase tax in some cities, and is popular with everyone.

Cui Dongshu also said that BYD was able to grow at a high level in sales in February, thanks to the breakthrough of plug-in hybrid technology, which had a greater impact on the joint venture brand. In the case of high oil prices this year, there will continue to be good market performance.

However, this piece is limited by production capacity, the pressure of delivery is very large, and the possibility of short-term improvement is very low. Many car buyers said that after waiting for 4-6 months and failing to pick up the car, they had to turn to other brands.

The marine series, which aims at young consumers and female consumers, is priced at about 100,000 yuan. This is still the mid-to-low-end market that BYD is familiar with.

And in this area, the pressure from the cost of raw materials is also surging. Aiming at the same customer group, Great Wall Euler, its two main models, white cat and black cat, have stopped receiving new orders, mainly because of chip shortages, limited supply of spare parts, and a long pick-up cycle.

Wang Chuanfu also said that the company's current delivery capacity depends on materials and IC chips.

"Wang Chuanfu is looking around at the factory, hoping to buy some production lines and quickly expand production capacity," revealed an investor close to BYD.

In addition to the mismatch between production capacity and orders and potential orders, BYD's product competitiveness is not very prominent.

In 2003, BYD, which had long achieved success in the field of mobile phone batteries, entered the market by acquiring Qinchuan Automobile to build cars, but was not optimistic about capital. Within a week of the acquisition, BYD plunged 54 percent, wiping out nearly HK$3 billion in market value.

Wang Chuanfu was not discouraged by this. Relying on new energy vehicles and fuel vehicles, BYD's sales have gradually risen, reaching about 100,000 units in 2007 and 448,000 units in 2009.

But in the 8 years from 2013 to 2020, BYD sales have been stagnant, even falling to 390,000 vehicles in 2020.

Focusing on cost-effective routes, focusing on A0 and A-class markets, BYD is not dominant in the "car sea tactics" used by traditional car companies. Comparable to other domestic independent brands, such as Great Wall, Geely, etc., the annual sales of more than one million vehicles in 2020.

In 2014, Musk visited China, he heard that BYD is still because of Buffett's investment, "Have you seen BYD's car, I think it is not good enough from the product level." ”

BYD electric vehicles sold more than Tesla in 2015, but in 2019, they were overtaken by Tesla with a gap of nearly 140,000 vehicles, and the gap was further widened.

An institutional person who has long tracked BYD believes that Tesla is product thinking and BYD is industrial thinking, which makes BYD's cars look less beautiful and cool.

New energy vehicle users are obviously more concerned about product appearance and novel interactive experience, and Wei Xiaoli's pursuit is a vivid example.

BYD is also changing. The birth of the "Han" series in 2020 allowed BYD to cut into the high-end new energy vehicle market, and even become the first brand in China's independent automobile brands in 2021 with an average price of more than 200,000 and annual sales of more than 100,000 vehicles, but there is still a big gap from the threshold of the top 10.2 million car sales.

Some BYD sales people said that Han is targeting the BBA mid-range model, and many orders come from BBA car owners to increase and buy. But in the eyes of many consumers, the purchase of Han is still based on practicality, and other DMi series are nothing more than this.

Obviously, the owners who buy BYD and the owners who buy Tesla and Weilai are not the same kind of people. In order to seize more diversified consumers, BYD's car also needs greater recognition.

king

Wang Chuanfu's dream of "world first" cars has been done for 15 years.

When the F6 model rolled off the production line in 2007, he said this bold remark: IND will be the first in China in the automotive industry in 2015, and the first in the world in 2025. At this time, it was only four years since he actually built the car.

He was lucky enough to bet on the new energy vehicle track and catch up with this popular outlet. After the "Great Leap Forward" burst of new energy vehicles in the past two years, BYD has once again come to the crossroads of its destiny.

As with its recent stock price performance, investors are still wondering whether it can move further forward and become a true "light of domestic goods".

BYD's A-share share price was 333.33 per share at the end of October last year, up 138% from the year's low. Now it has fallen for 4 months in a row, down 30%, and has recently hovered around 240 yuan / share.

Investor controversy over BYD is also large. Optimistic such as Citibank, according to the price-to-sales ratio to BYD pricing, PE directly to Tesla; conservatives expect BYD's net profit this year at the level of 9-10 billion, thinking that the current valuation is reasonable.

There are also pessimistic investors who have been bearish on BYD since last year, believing that the era of buying BYD with closed eyes and making money has passed, and the future competition in the new energy automobile industry will be extremely cruel.

In the voice of doubt, BYD seems to be holding back a momentum to prove its "king's face" to the outside world.

This year will still be a year of rapid expansion for the new energy giants. Including Tesla, Weilai, Xiaopeng, etc., new energy vehicle manufacturers are expanding production capacity, sales, and seizing the market.

BYD's capacity expansion plan is also in full swing. The "small target" of 1.5 million units means more than tripling from last year's level.

ACCORDING TOD sources, from about 20,000 vehicles in January last year, the production capacity increased to more than 90,000 vehicles in November, and the company is maintaining a full capacity at full capacity.

People familiar with BYD said that as of February, BYD had more than 200,000 orders in hand. February was also full capacity production, production capacity reached the limit, "at present, the production capacity and sales volume are basically the same."

According to BYD's plan, starting from May this year, a number of automobile production bases including Changzhou, Hefei and Changsha will be put into operation, and Fudi Battery is also expanding production in many places.

With the release of capacity in these plants during the year, BYD's production will be further increased.

According to public information, after BYD's new production capacity is put into operation, the overall production capacity will be increased to 2.2 million units in 2022, and it will further rise to 3.6 million units in 2023.

On the synchronous sales channels, people familiar with BYD pointed out that in the off-season in February, BYD mainly focused on opening up channels, allowing more dealers and 4S stores to come in, with the goal of increasing the number of channels from 1200 to 1500-2000.

While solving the problem of production capacity and sales channels, brand high-end is also another important starting point for BYD's sprint this year. BYD said, "Will take out the most ferocious sharks and crocodiles in the technical fish pond and shock everyone's eyes." ”

For car brands that start from the middle and low end, high-end has always been a problem. For example, Geely also used its Volvo to let its high-end brand Geely Lynk & Co occupy a place in the high-end market.

At the same time, this market has long been a red sea. Traditional car companies have been entrenched in this field for a long time; the new car-making forces have also cut into this market together, and gradually through the sinking hope to occupy more cakes.

If it wants to compete with Tesla for "world first" and become a real king, BYD still needs a real "blockbuster" car to become the ballast stone of its sales.

15 years ago, when Wang Chuanfu set the ambition of "world first" in the automotive industry, no one could predict how far he would go; and in the era of new energy vehicles that has arrived, Wang Chuanfu's BYD is already dancing on the same stage with Musk's Tesla.

BYD, may live up to the times.