Warren Buffett-Backed BYD Seeks Tesla's Support Amid Tough Competition In China's EV Market: 'Brands That Aren't Able To Compete...Will Be Eliminated'
Portfolio Pulse from Benzinga Neuro
BYD Co Ltd, backed by Warren Buffett, is preparing for intense competition in China's EV market and is open to collaboration with Tesla Inc. BYD has outperformed Tesla in vehicle production in 2023 and expects tough competition to lead to the elimination of weaker brands within two to three years. BYD's GM of Branding and PR, Yunfei Li, praised Tesla and suggested cooperation to grow the EV market. Tesla's CEO Elon Musk confirmed BYD as a supplier. BYD anticipates being profitable amidst competition and has invested heavily in vehicle intelligence and NEV evolution. The company expects a significant profit increase for the last year, while Tesla saw a 15% gross profit decline in 2023. Berkshire Hathaway has reduced its stake in BYD.
January 30, 2024 | 5:32 am
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POSITIVE IMPACT
BYD Co Ltd is facing strong competition in China's EV market but is positioned to remain profitable and is open to collaboration with Tesla. The company has seen a significant increase in profits and is investing in vehicle intelligence and NEV evolution.
BYD's positive profit outlook and strategic investments in vehicle intelligence and NEV evolution, along with its openness to collaborate with Tesla, suggest a strong position in the market. This could lead to a positive short-term impact on BYDDY's stock price.
CONFIDENCE 80
IMPORTANCE 85
RELEVANCE 90
NEUTRAL IMPACT
Tesla Inc, acknowledged by BYD as a supplier, may benefit from potential collaboration with BYD as both companies aim to expand the EV market. However, Tesla reported a 15% decline in gross profit for 2023, with China being a significant revenue contributor.
While a potential collaboration with BYD could be beneficial for Tesla, the reported 15% decline in gross profit for 2023 tempers expectations for immediate positive impact on TSLA's stock price.
CONFIDENCE 75
IMPORTANCE 75
RELEVANCE 70