After overtaking Tesla (NASDAQ:TSLA) as the world’s top electric vehicle (EV) seller in the fourth quarter of 2023, Chinese automaker BYD (HK:1211) surrendered the crown to the Elon Musk-led company due to lower-than-anticipated sales in the first quarter of 2024. BYD’s battery EV sales declined 43% quarter-over-quarter to 300,114 units in Q1 2024 and lagged Tesla’s deliveries of 386,810 units.
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Interestingly, Tesla reclaimed the top EV maker position but failed to impress investors as its Q1 2024 deliveries declined 8.5% year-over-year.
BYD’s Hong Kong-listed shares were down 2% as of writing and have declined nearly 13% over the past year.
BYD Failed to Save its Dominance
It is worth noting that BYD’s Q1 2024 EV sales fell sequentially but grew 13.4% year-over-year, thanks to strong sales in March. The company’s battery EV sales in March surged over 36% year-over-year to 139,902.
Overall, BYD delivered 626,263 vehicles (including plug-in hybrids and EVs) in Q1 2024, down about 34% from Q4 2023 but up 13.4% year-over-year. This marked the slowest pace of year-over-year growth since the second quarter of 2022 for the Chinese EV maker.
While BYD’s price cuts boosted its March sales, the company failed to retain its dominance over Tesla due to the subdued demand for EVs in China amid macro uncertainties and the impact of the Chinese New Year holiday. Moreover, the competition in the Chinese EV market is growing rapidly and there are increasing concerns about price wars weighing on the margins of EV makers.
BYD is trying to boost its business through continued innovation and expansion beyond the domestic market, seeking growth in lucrative markets like Europe. Overall, the company is targeting 3.6 million sales in 2024, reflecting a 20% year-over-year growth.
Is BYD Stock a Good Buy?
With seven Buys, one Hold, and one Sell recommendation, BYD stock scores a Moderate Buy consensus rating on TipRanks. The average 1211 share price target of HK$257.89 implies 27.3% upside from current levels.
