BYD may lead in EV deliveries and Tesla will overtake Toyota | Jobs Reply

Tesla rival and Chinese automaker BYD saw a significant jump in deliveries in November, and while the company could threaten Tesla’s crown as the world’s largest electric vehicle maker, some argue another metric is far more important. Analysts predict Tesla’s operating profit will overtake global leader Toyota, which could represent another industry-wide disruption from the US automaker.

Toyota has higher operating profits than any other auto company, and the Japanese automaker is expected to achieve operating profits of $20.1 billion in 2022, according to Barron’s. By comparison, some on Wall Street estimate that Tesla’s operating profit for next year will be $22.6 billion, which would likely be enough to outpace Toyota — especially if the electric car trend continues upward.

EV production volume will be closely watched by analysts and investors alike, but most view profitability as a more important indicator of stock performance. Some analysts forecast Tesla’s operating profit to grow by around 55% year over year in 2023.

Most expect Warren Buffett-backed BYD to sell roughly $84 billion worth of EVs in 2023, but it is expected to post an operating profit of $4.8 billion with free cash flow of $5.1 billion. According to Wall Street estimates, Tesla’s 2023 sales are around $120 billion, while its free cash flow is forecast to reach $14.1 billion.

BYD delivered 113,915 EVs in November, representing a 147% year-on-year increase from the 46,137 units delivered in the same month last year. The automaker delivered 116,027 plug-in hybrid EVs in November.

Tesla’s only challenger is Chinese EV giant BYD, said former Tesla board member Steve Westley. Video: CNBC/YouTube

While BYD has delivered around 800,000 EVs in 2022, Tesla has already reached roughly 929,000 EVs as of the end of September. Tesla doesn’t report its deliveries on a monthly basis, making estimates difficult, but it’s heading toward the end of 2022.

Some analysts expect Tesla to deliver about 1.4 million EVs in 2023, while BYD is forecast to deliver about 915,000 EVs next year. However, BYD also said it hopes to sell two million EVs in 2023, and while the goal is ambitious, the company’s overtaking of Tesla is not out of the question.

BYD Atto 3

BYD Atto 3, photo courtesy of BYD

To be sure, these projections will depend entirely on the industry-wide race to produce EVs, in which Tesla has a solid lead. Also, Tesla has a hold on sales this year, though increased competition is expected to shrink that lead.

Originally published Evanex. by Peter McGuthrie

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