Profitability analysis of new energy vehicle accompanies: Tesla vs. BYD
Liang Wang
Co-Presenters: Individual Presentation
College: College of Business and Public Management
Major: Finance
Faculty Research Mentor: Huaibing Yu
Abstract:
The rapid expansion of the new energy vehicle (NEV) market has positioned companies like Tesla and BYD at the forefront of the automotive industry’s transformation. This study conducts a comparative analysis of the profitability of these two leading NEV manufacturers over the five-year period from 2019 to 2023. Key financial metrics, including gross profit margin, operating profit margin, net profit margin, return on assets (ROA), and return on equity (ROE), were examined to assess each company’s financial performance.Data was sourced from publicly available financial statements and reputable financial databases. The analysis reveals that Tesla’s gross profit margin increased from 16.56% in 2019 to a peak of 25.60% in 2022, before declining to 18.25% in 2023. Similarly, Tesla’s operating profit margin and net profit margin peaked in 2022 at 16.76% and 15.41%, respectively, with a subsequent decrease in 2023. In contrast, BYD’s gross profit margin showed a steady increase from 14.84% in 2019 to 20.21% in 2023. BYD’s operating profit margin and net profit margin experienced a dip in 2021 but recovered in 2023 to 5.81% and 4.42%, respectively.These findings suggest that while Tesla has historically maintained higher profitability margins, it faced a downturn in 2023, potentially due to increased competition and market dynamics. Conversely, BYD exhibited a consistent improvement in profitability, reflecting effective cost management and strategic positioning in the NEV market. This comparative analysis provides insights into the financial health and strategic approaches of leading NEV manufacturers, contributing to a better understanding of the evolving dynamics within the automotive industry.