Picture supply: Getty Pictures
Tesla (NASDAQ: TSLA) inventory continues to be a well-liked funding. And I can perceive why – at the moment it’s almost 50% off its highs.
For these seeking to put money into electrical autos (EVs) and autonomous autos nevertheless, I feel it’s price contemplating one other inventory. This one’s held by legendary investor Warren Buffett, and at present it trades at a much more engaging valuation than Tesla.
BYD’s gross sales are surging
The inventory I’m speaking about is BYD (OTC: BYDD.Y). It’s a Chinese language EV producer that has inventory market listings in each China and the US.
You’ll have seen BYD’s EVs round in recent times. They’re fairly slick, and changing into highly regarded with shoppers. This reputation is illustrated by the corporate’s current gross sales figures. In 2024, the corporate offered 1.76m EVs, a rise of about 10% yr on yr. Total, it offered a file 4.3m autos in 2024, up 41% yr on yr.
As for Tesla, it offered 1.79m vehicles in 2024 (all EVs), a lower of about 3%.
Right here within the UK (the place it launched its EVs in March 2023), BYD offered 9,271 vehicles within the first quarter of 2025. That determine exceeds the corporate’s complete 2024 UK gross sales quantity. So its vehicles are clearly in style with Britons. Turning to Tesla, its UK gross sales have been weak this yr – in January they had been down 7% yr on yr.
Zooming in on revenues, BYD’s are surging. For 2024, its prime line jumped by 29% to CNY777bn ($107bn). This topped the $97.7bn reported by Tesla. Notice that Tesla’s 2024 income was solely up 1% yr on yr.
Rather a lot to be enthusiastic about
Wanting forward, there are many causes to be bullish. Lately, BYD launched a low price mannequin (the Qin L) to tackle Tesla’s Mannequin 3. In the meantime, earlier this yr the corporate launched new battery charging expertise, which might cost an EV in simply 5 minutes. It additionally introduced that its superior driver-assistance expertise (‘God’s Eye’) could be accessible free in all its fashions.
Low valuation
Maybe the most effective factor about BYD inventory nevertheless, is its valuation. Presently, it trades on a price-to-earnings (P/E) ratio of 25, falling to 21 utilizing subsequent yr’s earnings estimate. That’s a a lot decrease valuation than Tesla has, which is at the moment buying and selling at 98 instances this yr’s forecast earnings and 73 instances subsequent yr’s.
So on a relative foundation, there seems to be a number of worth right here.
Dangers to contemplate
In fact, there are many dangers to contemplate with BYD. One is competitors from different producers. At the moment, just about each main auto producer is producing EVs and competitors’s intense.
One other is tariffs. EU tariffs on its passenger vehicles, and US tariffs on its buses and vehicles may harm income. A serious international recession is one other threat. When financial circumstances weaken, shoppers have a tendency to carry off on the acquisition of recent autos.
All issues thought of nevertheless, I feel this inventory has a number of potential and is price taking a look at. For me, it’s a safer wager than Tesla.
