BYD revealed Tuesday it expects to report record earnings for the third quarter on the back of robust sales of electric vehicles. BYD stock rose.
Archrival Tesla earns a spot on the IBD 50 list of top growth stocks.
Record BYD Earnings Driven By These 3 Factors
The Chinese EV and battery giant projects a net profit of between RMB 9.55 billion ($1.31 billion) and RMB 11.55 billion in the third quarter, CnEVPost.com reported Tuesday, citing a newly released earnings preview from the company.
That would surpass last year's fourth-quarter net profit of RMB 7.31 billion. It would also represent year-on-year growth of 67%-102% and quarter-over-quarter growth of 40%-69%, in local currency terms, the report said.
Amid China's EV price war, BYD said it showed resilience as its earnings power continued to improve.
In the earnings preview, the company cited three factors for that improvement: brand power, continuously expanding scale advantage, and strong industrial-chain cost control.
BYD will likely report full third-quarter results in early November.
A growing lineup of electric vehicles, spanning both the affordable and premium ends of the market, has enhanced BYD's brand power. BYD is also expanding EV sales overseas. The company also enjoys a big cost advantage vs. peers, because it makes it own batteries and automotive chips.
BYD Stock
Shares of BYD, which trade over the counter, gained 2.6% to 31.80 in Tuesday's stock market action. BYD stock has retaken the 50-day moving average this week after a slump since the end of July.
BYDDF has a 36.27 consolidation buy point. Investors could use Tuesday's move as an aggressive entry.
Tesla stock rose a fraction Tuesday, just above the 50-day line. Tesla shows a 278.28 buy point and 268.94 early entry, the MarketSmith chart shows. Tesla reports third-quarter earnings on Wednesday night.
In other EV news, Lucid reported Q3 EV deliveries that fell below consensus analyst views. Lucid stock fell 5.3%.
General Motors said it will delay production of the Silverado and Sierra electric trucks from late 2024 to late 2025, amid demand concerns. That follows a Ford Motor move last Friday to cut one shift at a plant building the F-150 Lightning truck.
Both GM stock and Ford stock rose further Tuesday off multimonth lows, amid the autoworkers' strike.
Futures: Market Stuck In A Range; Five Stocks Near Buy Points
EV Sales Boom
For Q3, BYD already reported sales of 824,001 electric vehicles, up 17% quarter over quarter. The tally included 431,603 battery electric vehicles (also known as BEVs, or "pure" electric vehicles), up 22.6% from the prior quarter.
In terms of BEV sales, BYD is now neck-and-neck vs. Tesla, which reported 435,059 global deliveries during the third quarter.
In the current fourth quarter, BYD is likely to seize the BEV crown from Tesla. The Chinese EV company is backed by Warren Buffett's Berkshire Hathaway.
BYD aims to sell at least 3 million electric vehicles (including hybrids) this year. Tesla is aiming for 1.8 million and doesn't make hybrid vehicles.
On Tuesday, BYD launched the Seal in Australia, priced substantially below the Tesla Model 3 in that country. Deliveries will start in December. BYD is expanding the Seal and low-cost Dolphin EVs to many new markets, as part of a big export push.
