The company name Tesla and the adjective "world's largest" have gone hand in hand for years. For a long time, the US manufacturer led by Elon Musk dominated the market for electric vehicles. But now the Californians could lose their supremacy. A spectacular overtaking process took place in the fourth quarter of 2023: BYD delivered 526,409 battery-powered vehicles in this period. The Chinese company thus surpassed Tesla's sales by more than 40,000 units. Although both companies posted a record quarter, the Chinese company grew significantly faster. BYD increased sales by 60% in the fourth quarter, while Tesla's delivery figures were a fifth higher than at the end of 2022. For the year as a whole, the US company is still ahead in terms of vehicle sales. Tesla sold a total of 1.8 million electric vehicles in 2023, a good 200,000 more than BYD.
On the stock market, the race between the two rivals was even clearer. Boosted by the general enthusiasm for US technology stocks, Tesla's share price roughly doubled last year. Meanwhile, BYD, which is listed in Hong Kong, only rose by around a tenth. The industrial giant felt the effects of doubts about the recovery of the Chinese economy. In 2022, BYD generated more than three quarters of its sales in the People's Republic - in addition to its dominant vehicle division, the Group is also active in the smartphone and photovoltaic business and as an industrial service provider. In the automotive segment, China even accounts for around 90%. Despite the current macroeconomic headwinds, BYD is benefiting from its "home advantage". China is now the largest market for new vehicles. At the same time, the share of electric cars is particularly high.
Globally, only just over one in ten cars delivered is an "electric car". The low penetration offers growth opportunities for Tesla and BYD. However, neither the North American industry pioneer nor the up-and-coming rival from the Far East is immune to the trade disputes between the USA and China. International expansion is also a major challenge for BYD. The Chinese have long been beating the advertising drum. For example, BYD was very present at the recent IAA Mobility 2023 in Munich. Among other things, the SEAL U, an SUV offshoot of the Seal electric saloon, was presented on the old continent for the first time. The luxury sub-brand Denza also made its European debut. In this joint venture with Mercedes Benz, BYD is pushing into the premium segment, for example with the D9 MPV.
The BYD share lacks a clear direction after the zigzag course of recent months. Soft callable barrier reverse convertibles therefore offer an interesting alternative. Leonteq has launched two new variants on BYD. The guaranteed coupon is 8.00% p.a. in the product currency CHF. This yield opportunity is offset by a barrier of 65% of the initial level. The risk buffer is the same for the USD-denominated variant. There is a striking difference in the quarterly distribution: the coupon is 11.00% per annum. Both BRCs have a term of 12 months. However, Leonteq has the option of calling the issue prematurely for the first time after 6 months and then quarterly. If the provider makes use of the soft callable function, product holders will receive the pro rata coupon in addition to the full nominal within a few days. Important: As soon as the barrier is breached, the partial protection expires.
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