Suffice it to say, China-based electric vehicle (EV) manufacturer BYD (OTCMKTS:BYDDY) isn’t afraid to wage war with Tesla (NASDAQ:TSLA). At least, that’s the impression left by a fresh report from Reuters. Meanwhile, BYDDY stock is in the green today. This is most likely because BYD’s quarterly net profit increased by over 300% on a year-over-year (YOY) basis.
Interestingly, many U.S.-based financial traders probably aren’t aware that BYD is the biggest EV maker in China. Most people are certainly aware of Tesla, though, and some folks probably assume that Tesla has little to no serious competition.
However, a Reuters report strongly suggests that BYD could give Tesla a run for its money, at least in the Chinese EV market. The report refers to BYD’s “[r]obust sales” and “product range broader than other EV competitors.” It also touts BYD’s “improved product mix” and significantly reduced per-vehicle costs.
Furthermore, the report states that BYD sold 1.2 million EV units during the first nine months of 2022. This growth indicates a 250% YOY increase. In comparison, Tesla apparently sold just over 318,000 EVs during that time frame.
What’s Happening With BYDDY Stock?
So, if BYD is indeed extending its “sales lead over Tesla Inc in the world’s largest auto market,” what does this mean for BYDDY stock investors? It could mean a slight profit for the day, as BYD shares moved moderately into the green in early morning trading.
There’s a bigger-picture consideration here, as well. Tesla is a growing business, no doubt, but it will have to compete in China with BYD. And BYD’s profit growth is indisputable.
BYD’s estimated net profit for the July-September quarter was between 5.5 billion yuan and 5.9 billion yuan. This range equates to $765 million to $820 million.
To put this in percentage terms, BYD’s estimated net profit grew 333% to 365% versus the comparable year-earlier period. Given this growth trajectory, it’s notable the BYDDY stock isn’t much higher today.
But again, BYD isn’t exactly a household name in the U.S., while Tesla is revered. If more American financial traders learn about BYD, though, there could be a fast, powerful rally in store.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.