Benzinga - by Shanthi Rexaline, Benzinga Editor.
After Warren Buffett-backed Chinese electric vehicle maker BYD Co. Ltd. (OTC:BYDDY) (OTC:BYDDF) dethroned Tesla, Inc. (NASDAQ:TSLA) as the market leader in terms of volumes sold in the fourth quarter, social media users quickly drew comparisons between the two companies. And CEO Elon Musk was quick to chime in with his own opinion.
What Happened: Tesla enthusiasts pointed out that BYD sells low-priced battery EVs solely in China and is yet to prove its credentials in Europe or North America.
YouTuber and blogger Alex Voigt said BYD is unlikely to sell at the same prices in these regions, and Tesla will likely continue to outsell the Chinese company once its $25,000 model is launched. The full-self-driving software, which gives Tesla a head start with respect to profit and margins, and its massive cost competitiveness, once FSD and Optimus become commercial, give the Musk-led company an edge, he said. The Tesla fan also sees the company as being able to sell at more attractive prices than any other rival.
Another Tesla influencer, going by the handle @MatHias8719, said Tesla and BYD are not comparable. He reasoned that the former is a hardcore technology company that now makes the most profits from cars and is poised to transition to a company that will rely more on its energy subsidy, FSD, and Optimus Bot. He termed BYD as a company manufacturing merely cars and batteries.
A third Tesla enthusiast made a comparison between the two companies on several metrics, including revenue, profit, number of employees, products, and factory count,, and concluded that Tesla is way better than BYD, as the latter sells “small to medium cars with low standard and bad safety features,” mostly in China and is not a believer in self-driving technology.
Musk chimed in and clarified regarding Tesla’s core mission. “Tesla is an AI/robotics company that appears to many to be a car company,” he said.
Tesla is an AI/robotics company that appears to many to be a car company— Elon Musk (@elonmusk) January 3, 2024
Why It’s Important: Tesla’s future revenue opportunity is enormous, provided it executes on its plans. That said, assigning too much value to the FSD, which has so far remained a questionable and half-baked technology, and other opportunities could prove to be a risky proposition for investors.
Cathie Wood’s Ark Invest has a $2,000 price target for Tesla by the 2027 timeframe, way ahead of the stock’s current price. Tesla closed Tuesday’s session down 0.02% at $248.42, according to Benzinga Pro data.
“Tesla's prospective robotaxi business line is a key driver, contributing 67% of expected enterprise value and 64% of expected EBITDA in 2027,” the firm said in its April 2023 assessment. Self-driving tech is core to robotaxi operations.
After Cybertruck failed to rev up excitement following its late-November launch, Tesla analysts pin their hope on the $25K car that is widely expected to launch either in late 2024 or early 2025.
Check out more of Benzinga’s Future Of Mobility coverage by following this link.
Read Next: Tesla ‘Is The Only Investable’ EV Play, Says Analyst, As Electric Vehicle Industry Navigates A Tough 2023: Year In Review
(Image created with artificial intelligence on MidJourney and Mike Mareen on Shutterstock)
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.