Tesla and BYD record sales, driving demand for electric cars

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

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

Tesla stock rose more than 6% in premarket trading in the United States, while BYD stock jumped 5% in Hong Kong. Electric vehicle battery suppliers Contemporary Amperex Technology Co. also advanced. Ltd. and LG Energy Solution Ltd.

Tesla has vowed to push for more volume even at the cost of profitability, putting more pressure on legacy automakers that haven’t kept up with electric cars and have given up overall market share. Volkswagen AG announced last week the new flagship of its Audi brand, which trailed Tesla in the first quarter.

Analysts polled by Bloomberg predicted that Tesla would deliver 448,350 vehicles in the past three months.

“It’s a big hit,” Ben Callow, an analyst at Robert W. Baird, said by phone Sunday. “People were still preparing for another round of price cuts, and this high delivery number makes that less of a risk.”

The deliveries are the largest 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 first quarter, after production outsold sales by about 18,000 vehicles in the first quarter.

“Everyone was worried about building inventory, and it seems like they’ve normalized,” Callow said. “The gap between production and delivery is closing, which Tesla said they would do.”

In addition to cutting prices across the lineup this year, Tesla has offered perks like three months of free express shipping in the US to entice buyers. Some analysts expected the price cuts to continue into the next year.

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Read more: Tesla locks in another delivery record after price cut

Tesla does not break down quarterly delivery numbers by individual vehicles or regions. The Model 3 and Y accounted for 96% of sales last quarter. Tesla also makes the Model S and X.

Tesla is by far the largest maker of electric cars in the United States, but it faces stiff competition around the world from companies with more modern lineups. The latest car – the Model Y – debuted in 2020.

In China — Market No. 2 — the company has fallen far behind BYD, which has growing global ambitions. Tesla announced last week that it would cut the prices of its luxury car models in the country by more than 4.5%, following the decision to give cash subsidies to some buyers of the Model 3 sedan.

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

Tesla will report its second quarter earnings on July 19.

BYD Record

BYD has gained ground over Tesla in all-electric vehicle sales, nearly doubling deliveries year-over-year to 352,163 units in the second quarter.

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

Small Chinese startup Li Auto Inc. A new monthly high of 32,575 deliveries, while Xpeng and Nio Inc. modest increases. The Aion brand of Guangzhou Automotive Group Co., Ltd. Another strong month of sales, with 45,013 deliveries made.

June sales “show that demand for NEVs remains very strong” despite China’s economic hurdles, said Joanna Chen, a Bloomberg Intelligence auto and electric vehicle battery analyst.

— with assistance from Charlotte Yang.

(Transfer updates with Tesla’s involvement in the third paragraph.)

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