00:00 Speaker A
BYD jumping this morning after notching record quarterly profit and sales topping 100 billion in 2024. The world’s largest EV maker topping Tesla’s annual sales of 4.2 million vehicles. Here with more, we got Sean Tucker, Kelly Blue Book lead editor. Sean, great to speak with you. Talk to me about how you are seeing this dynamic playing out. When you take a look at those revenue numbers, you’ve got BYD around 107 billion and Tesla around 98 billion. So pretty big leap frog there. Are you seeing that in terms of customer activity?
00:41 Sean Tucker
Globally, yes, absolutely. Um, you know, BYD has a price advantage in most of the globe. They have a cost advantage in that they are cheaper to build. And they’ve increasingly got a technology advantage. Last week, they showed off a charger that they claim will refill most of a battery in about five minutes. Um, it’s the kind of thing that’s more a perception issue than anything else, because in reality it would take years to deploy those to everywhere that they need to have them, but it convinces consumers that hey, this is the best technology out there.
01:17 Speaker A
And so with that in mind, as you’re thinking about what BYD needs to do to really capitalize more longer term on the mind share, because that is a larger shift that we’ve seen from purchases to mind share that some of the other automakers and EV makers have been able to acquire in addition to the market share from Tesla here. How does that kind of play out more long term from your own analysis and and what we’ve typically seen in the past when you do see a newer company capitalize on a moment where there is that consumer sentiment shift?
02:10 Sean Tucker
Yeah, they face a unique challenge in that both the United States and Europe are trying to slow them down in a sense. Um, and so you’re seeing most of the growth mostly outside of those markets. Um, but the mind share they are doing an outstanding job of growing as quickly as they can in growing markets outside of the West.
02:42 Speaker A
And talk to me more broadly about what you’re seeing in terms of Tesla activity in particular. I know that you specialize specifically in kind of researching and looking into consumer-driven activity and advice over at Kelly Blue Book. Have you seen a real sea change that is what some investors have told me unrecoverable when it comes to consumer demand for Teslas?
03:15 Sean Tucker
Uh yes, I don’t know if I would say unrecoverable, um, but what we’ve seen just recently is that the loyalty rates and the defection rates, which historically Tesla has been far better than the industry average, they’ve fallen to about the industry average right now, and that’s kind of a lagging indicator in that I don’t know that we’re getting a reflection of the last week in that. Um, so Tesla is essentially becoming an ordinary car company. And when you treat it as an ordinary car company, you look at it and you realize it’s got an aging lineup. Um, there’s nothing really exciting coming down the pike anytime soon. They gave up a major competitive advantage last year in sharing their charging tech, and they made a big bet on automation. Musk says that’s the future, but everyone else has also made a big bet on automation.
04:17 Speaker A
Right. So Sean, what does Tesla have to do next to turn that around and not be an average car company anymore?
04:26 Sean Tucker
So, you know, Musk tells us it’s not a car company, and if that’s the case, I don’t know how to what to tell you because I’m an analyst of car companies. But as a car company, what Tesla primarily needs right now are two things. Uh they need new interesting products. Um what they have is dated. Um they are bringing out, you know, refreshes and updates, but not new products. And it’s some of the technologies a little behind the curve now and that most Teslas are built on a 400-volt architecture and most of their rivals are on an 800-volt architecture. And then frankly, they’ve got a public relations problem in that I I don’t know what you do about Musk. Um I if we look at the numbers and we find that Tesla sales peaked all the way back in February of 2023, just no one quite knew that at the time. So it’s quite possible that with a politically quiet CEO, they would still be facing a lot of this, but they don’t have that.
