Everybody knew that Tesla (TSLA 15.31%) was going to see increasing competition in 2024. Ford was ramping up production of its F-150 Lightning and General Motors would be greatly expanding its electric vehicle (EV) lineup.
It turns out that the competition has increased, but not so much from those domestic legacy automakers. Both Ford and GM have greatly throttled back EV production plans. But another big automaker has somewhat unexpectedly become what looks to be Tesla's biggest competition. It turns out Chinese EV maker BYD (OTC: BYDDY) has ultimately surpassed Tesla to become the biggest seller of fully electric cars. Investors might want to dig into what that means for Tesla.
Growth stocks don't need to be a monopoly
Tesla has looked like anything but a growth stock this year. Shares have dropped 20% so far in 2024. But BYD's success also points to why Tesla can be a great growth stock again. When BYD released a preliminary fourth-quarter and full-year 2023 update, it said 2023 profit should come in 75% to 86% higher than the prior year due to record high sales. And that's after another big jump in sales in 2022.
BYD's success is coming as it has focused on lower priced, mass market EVs. BYD became the biggest seller of fully electric EVs beating Tesla with over 525,000 battery electric vehicles sold in the fourth quarter.
The Chinese automaker is increasing its exports, too. It recently introduced its least expensive EV in South America, starting at $20,000. It also is reportedly thinking about building a factory in Mexico to ship vehicles into the U.S. market.
Tesla has been teasing a lower priced EV for some time now, and is expected to announce a launch of that product late this year. That is likely the catalyst that could get Tesla stock back in growth mode. It's working for BYD, and investors shouldn't count out Tesla from successfully joining that market. There should be room for more than one major supplier.
