BYD makes US$1,250 Profit per Car

According to statistics from Late Finance BYD make an average net profit of 9,000 yuan per car, that’s about 1,250 USD. Tesla on the other hand made over 8,250 USD per car based on net profit of 14.9 billion dollars and sales of 1.81 million cars in 2023. What this clearly shows is that BYD is going after market share rather than profits.

Here is a link to BYD EV models:

Cheapest is $11,400. Most expensive $150,666.
5 models in $11,400 to $20,000 price range.
4 models in $20,000 to $30,000 price range.
3 models in $30,000 to $40,000 price range.
5 models in $40,000 to $50,000 price range.
1 model $78,000
1 model $150,666
What strikes me is the large number of models and wide price range. They have 8 new BYD models coming to the market in 2025.

Methinks Tesla needs to be pushing their new $25K model toward production ASAP. And we need more info on that new model. Will it just be a smaller model 3 with savings done via less metal and smaller battery pack?
Do Tesla’s offerings need to be updated? I know Tesla constantly does software updates. But what about body shapes?

It’d be easy to look at photos of the newly updated Tesla Model 3 and think,meh, not much has changed . Indeed, the new 3 qualifies as a heavy refresh, not an all-new design, meaning it carries over the 3’s batteries and motors from before, along with all of its hard points. But that lies beneath a freshened skin and seriously revised interior loaded with better materials and even more tech.

Such tactics are typical among Chinese businesses where a race to the bottom, winner takes all mentality pervades. Good examples have been bicycle sharing schemes, food delivery and to a lesser extent ride hailing schemes. All initially had multiple entrants who then undertook huge discounting and promotions in order to gain market share. With bicycle sharing this largely whittled the competition down to two companies Ofo and Mobike. The result though was that due to relentless competition they had created a business model that was not profitable and neither company exists anymore, although there are still a handful of bicycle sharing companies.

I dunno if the above is true or not. But it is something that a China competitor must keep in mind.

Another trend EV makers need to keep in mind:

China’s less expensive models are smallish in comparison to other nations offerings. So less metal and smaller battery packs are part of the reason for low entry price point. Many US potential buyers would reject due to size. But I suspect there is a market for them to lower income & younger buyers within USA.

EV sales in China market space is still growing but is slowing.
China’s first-quarter EV sales growth slowest in a year

BYD dominates that market space–36.6% market share.
Tesla is #2 at 8.8%.

With the advent of new models and new technology coming online in the next few years I foresee great changes in the EV market and change in ranking of EV makers and more EV makers disappearing from the market space. My crystal ball is fuzzy–so no predictions on how it shakes out.


Given that Musk says it won’t be “for sale” but will be used for Robotaxis, it seems unlikely that “smaller battery pack” is a viable option, at least until that battery pack can hold more energy and charge faster.

A average taxi now puts on about 150 miles a day, according to statistics. Tesla’s smallest now gives 267 as the nominal mileage (but likely a far amount less in reality). If that’s true, then the delta between what needs to be driven and “length of charge” is already fairly close, and a smaller battery pack would only make it worse.

That’s partly why I asked a couple days ago how to make it that much cheaper. Less metal? OK. Musk is supposedly pushing for “no steering wheel” and “no brake pedals” which could save a bit, but not really that much.

Otherwise it’s still going to need headlights, taillights, trunk, seats, fenders, and all the rest. Smaller motors? Maybe. It’ll be interesting, I’ll say that.

I might have missed it, but I don’t think he actually said that. Reuters reported the Model 2 was being canceled but Musk tweeted Reuters was “lying.” Musk then tweeted that the Robotaxi would be unveiled on 8/8.

So if you read between the lines, you can logically conclude the Model 2 will be the Robotaxi, but I don’t think that’s confirmed.

Since I’m reading between the lines, this does not seem like good news for Tesla. Tesla need a low cost entry to compete with BYD and others.

The Robotaxi would be cool, but as we’ve discussed here many times before, a certain percentage of people will always want their own car. I don’t think Tesla can make up the low end market share they would be losing by not producing a consumer version of the Model 2 in Robotaxis sales.

And the other part of this is the Robotaxi will be debuting on 8/8. The Cybertruck debuted in 2019. The Tesla Semi debuted in 2017. The Robotaxi could be years away for all we know.


Neither Tesla nor Musk ever directly stated that they planned for the “Model 2” to be any specific type of vehicle. They announced that there would be a next gen platform, made some statements about how it (and their new “unboxed” technique) would reduce their production costs. A number of observers applied those projections of production savings to what the Model 3 costs to produce and to the general idea of a $25K car, and speculated that the first next gen cars might include a $25K vehicle. But I don’t believe Tesla ever actually said that.

And does a $25K car make sense for a company that plans to have a Level 5 or a very capable Level 4 autonomy system within a year or two? Sure, it’s not like “robotaxi” is a defined term - but presumably it means a car that actually can drive itself, unlike FSD Supervised. Seems like you’d never get much of a take rate for a $12-15K option down in the smaller-than-a-Model 3 segment - so why “waste” batteries building those kinds of cars, rather than either a bespoke robotaxi or models at a price point that folks will buy the autonomy package for?


Wouldn’t Tesla need that FSD sooner as the Robotaxi is slated for an August debuted?

If the $25K EV was smaller dimension wise compared to the model 3 there would more metal savings. A smaller EV would mean a smaller battery pack which would result in less weight and more range perhaps. Of course we are just speculating as no details on the proposed $25K model have been divulged.

Probably not. Tesla is going to “unveil” the robotaxi in August. While we don’t have any details, in the past Tesla has usually unveiled a new model as a pre-production vehicle. Actual production of the vehicle certainly won’t start until many months after the unveil - and it’s always possible that it won’t begin until years later. Or that their initial production run will be more of a pilot program (like with the Semi), rather than going straight to production thousands and thousands of cars.

And depending on how the vehicle is designed, there may be regulatory obstacles between design and production. If they’re planning on deleting features necessary for human driving (steering wheel, brakes, mirrors, etc.) then they need approval of an exemption from safety regulations. Unlike the operation of motor vehicles, which is largely a matter of state law, the physical design of a vehicle has to meet federal requirements - and there’s a formal process for getting a waiver from those requirements that may take some time to obtain. GM/Cruise have been trying to get that exemption for over two years now:

Of course, they could always include things like steering wheels and brake pedals in the initial design and engineer them so they can be removed once they get regulatory approval. That would avoid federal problems, and let them go straight to production for use in whatever states allow the vehicles. Again, we don’t have any details, so there’s no way to know what approach they’re taking.

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That would not be a good idea for Tesla. More info on the new model too early and you Osborne sales of existing models.

Here is my guess as to what Tesla will do. The next generation platform will be used to make both the robotaxi and the Model 2 (what I call the car for mass market sales). The unboxed production method and steer-by-wire will make that pretty simple to do. Just need a base with two different seating arrangements and the ability to plug in an electronic steering system if needed. They will initiate sales with the robotaxi and use that model to figure out how to ramp up production. During this period, Tesla will continue to be vague about the Model 2 and discount the Models 3 and Y even if it hurts stock values. Once they get the next generation production optimized they will mass produce the Model 2 while announcing upgrades (and higher prices) for the Models 3 and Y.

Production savings will come from the unboxed production process and the battery price war that is just starting. CATL has announced a 50% reduction in EV battery costs by the end of this year with Tesla already setting up to produce the new CATL batteries in the US. Since batteries are the costliest part of a BEV, this is pretty significant.

There is a lot of talk about BYD competing with Tesla but I think most of it is nonsense. Tesla is using the newest BYD Blade batteries in Model Ys produced in Berlin because these have faster charging times. Both Tesla and BYD understand that the real competition is with the 80%-90% of the global automotive market that still use gas. That’s why BYD sells their best batteries to Tesla while Tesla allows BYD to use their European supercharger network. BYD points to strong partnership with Tesla, wants to fight ICE together | Electrek

Ultimately, the timing of the roll outs is being determined by battery availability. Ironically I think the remarkable advances in battery performance is delaying the introduction of new Tesla vehicles. Why rush a new model now when CATL and BYD announced that by the end of the year, prices will be cut in half for batteries that can charge in half the time?

I think the Cybertruck was built before the Model 2 primarily because battery technology wasn’t good enough to build a $25K BEV that was both profitable and better than similarly priced ICEs/hybrids. That will change by the end of this year. In the meantime Tesla designed a luxury truck where it could introduce new tech (steer-by-wire, 48V electronics) and new production methods and generate a lot of free advertising buzz, while still selling a million models in the next few years.

Anyway, I’m guessing Tesla will start producing small numbers the robotaxi within a year that will be tested in certain locations with human supervision. This will be used to gather data that will then be used in another year or so to convince regulators that FSD is safer than human drivers, setting the stage for autonomous robotaxis. While everyone is distracted by dissing the robotaxi, they will prep for mass production of the Model 2.

Remember, you read it here first.

Meanwhile, Tesla can now install prefabricated superchargers in just four days.
Tesla can now deploy pre-fabricated Superchargers in a game-changing 4 days | Electrek.


Can you provide a link to that announcement? The link in your story doesn’t quite say that. It notes:

The world’s two largest EV battery makers - CATL and BYD - are reportedly restructuring their production lines and introducing cost saving technologies and practices with the goal to drop the price of their LFP cells down to $0.04/Wh.

“Reportedly” making changes “with the goal” to get battery costs cut in half is not the same as the company actually announcing a 50% reduction in battery costs by the end of the year.

I think the $25k car is the razor, and the $40,000/yr price of FSD once it actually works is the blade – to use the shaving analogy.



Those prices don’t make a whole lot of sense to me. Someone who can afford to pay $40K per year for FSD isn’t going to want to buy a $25K car instead of a Model 3 or Y.

I mean, it feels like there’s some tension between these two future paths for Tesla - cheap mass-market car and high-price FSD. A $25K car is going to be smaller than a Model 3, which doesn’t seem like a good fit for either a robotaxi or a TaaS vehicle. In a world where Level 5 (or very broad Level 4) autonomy exists and is a very expensive option, is there still room in the mass-market for inexpensive small cars? Or is that exactly the market segment that gets eaten by TaaS - non-luxury transportation for people with moderate- to low-incomes?

Let’s assume that CATL and Tesla get half price batteries by the end of the year.
I doubt that Tesla could rush out a new Model 2 in any quantity by the end of the year anyway.
They have no assembly line setup as of now (that we know of) and they haven’t even shown a prototype, there have been no leaks from their supply chain getting ready to ramp up.
IMO, “rushing” at this point is a mid to late 2025 for the first product shipping…so I doubt they are waiting for battery prices to drop.


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Nope. FSD is a market-destroying piece of software. Build a quality base vehicle and lease it out at various trim/equipped levels. People can afford it because they are not paying a separate company for a variety of things they no longer need to have–like car insurance (responsibility of the lessor). If part of a robotaxi fleet, then just pay-per-ride = taxi fare.

Lots of vehicles based on the same basic framework, just different body shells. Automated delivery vehicles (UPS/FedEx use them exclusively for local delivery as far cheaper than running their own fleet of trucks).

Car insurance companies shrink massively, with many going under. And so on.

It’s even possible that the next gen platform (48V, steer-by-wire, more unitized battery packs, etc) will be used for the model 2, the robotaxi, the model 3, the model Y, and the model 7 (a large 3-row SUV). Though it may be more likely that the model 7 uses the cybertruck platform instead (if they can get the efficiency up a bit).

If the new platform is truly substantially less costly, then it would be folly to not move 3 and Y to it!

The original report was from CNEVPOST who wrote that CATL will make it fast charging VDA LFP cells (that can be fully charged in 30 min) available to automakers “in mid-2024 at a price not exceeding RMB 0.4/Wh”. The cells were selling at about RMB 0.8/Wh early last year. Battery price war: CATL, BYD pushing battery costs down further - CnEVPost

This is the Korean perspective of the situation:

The price of CATL and BYD’s prismatic LFP battery cells, which were 0.8~0.9 yuan at the beginning of last year, were reduced to 0.6 yuan in August, and recently it has fallen below 0.5 yuan. CATL has agreed with electric vehicle manufacturers to provide prismatic LFP battery cells for less than 0.4 yuan per Wh in the current year. When converted to the price per kilowatt-hour (kWh), this is about 75 dollars. S. Korean companies’ concerns grow as China lowers battery prices

Remember that experts had estimated years ago that BEV price parity with ICEs would not occur until battery prices dropped below $100 per kWh.

One of the most interesting results of the analysis was that battery pack prices need to drop well below $100 per kilowatt hour (kWh) for EVs to reach parity — that rate has long been held out as the benchmark for reaching this point. But given consumer preferences for higher ranges and heavier vehicles the magic number looks closer to $80/kWh in Europe and the U.S., and even lower in some other markets with cheaper vehicles. Taking it a step further, $60/kWh is a good benchmark for when EVs are cheaper than combustion vehicles in all segments and countries. BNEF expects battery prices to reach $80/kWh in 2026 and $60/kWh in 2029, down from $137/kWh in 2020.

Chances are the costs will be even less for Tesla because of its growing partnership with CATL, which includes leasing CATL equipment to produce batteries and collaborating on developing new battery chemistries:

Rather than import battery modules or use the raw materials sourced by CATL, it is speculated that Tesla will instead lease the tooling from the Chinese company and collaborate on new battery chemistries. Robin Zeng, chairman of CATL, confirmed to Bloomberg that the companies are already working on new electrochemical structures that would allow for faster battery recharging. The model could potentially allow Tesla to produce more advanced battery cells at a low price point and ensure that CATL still has its claws in the Western market without actually needing to export batteries to the U.S.

In short, battery prices will have reached the price parity threshold at about the time the Tesla next generation vehicle will be entering into final development mode. I don’t think that is a coincidence. The Tesla strategy seems obvious even if not explicitly stated. The Model 2 is not profitable at $25K without this cheaper battery (that also charges fast even in the cold). As this battery was being developed, Tesla cultivated partnerships with CATL and planned expansion of facilities for domestic mass production of the battery. They will be coordinating that production with the mass production of the Model 2. This vertical integration will allow them to compete price wise with anyone, even BYD if necessary. But they are also in partnership with BYD to buy their Blade batteries for production in Europe where using a Chinese-produced battery doesn’t matter. I think this is brilliant strategic leadership.

No one has yet answer my question: what about the last 100 feet problem? Or does the truck just push the package out the back door onto the street?

At the end of the day Tesla is just a car company. FSD probably won’t work as needed in full. Musk’s dreams won’t come true. The tens of billions of hours Musk wants the general public surfing on the internet while traveling by car won’t come to pass.

Human folly on a scale never seen before unless you include all of human history. A footnote in galactic being.

The only thing that makes sense, as usual, is a 90-something Warren Buffett won’t invest in Elon Musk.

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LOL. Maybe? More likely, it’ll have a cute little robot that’ll bring it to the door and place it there, and then return to the truck. Or maybe a LONG armed device connected to the truck will place the package at the door. Or maybe they will have different types of trucks servicing different areas - single family home areas can have robot trucks with arms, apartments with no doorman can have human assisted trucks, apartments with a doorman can have robot trucks with a little assistant robot, etc. If we knew exactly what the future looks like, life would be boring, it’s much more exciting when new stuff happens to astound and delight us!

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Easily solved. Lots of unemployed people due to FSD, so they can be low-paid “to the door” delivery people, from the vehicle to the door. Perfect jobs for the rural residents who lack education and training due to education cuts by their states and are thus unable to get well-paying jobs in an urban/suburban area.

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OK, then you’re paying someone to ride around in a FSD truck, which sort of collapses the “more efficient” argument. And say, finding those low-pay workers is proving to be devilishly difficult these days, or haven’t you noticed the “help wanted” signs in front of McDonald’s, Kohl’s, and Lowe’s on every block?

I’m trying to envision the time that would take for a tracked vehicle to load the package atop itself, deploy a ramp to exit the vehicle, get to the front porch (doorman, garage, etc.) put down the package, return to the truck, go up the ramp, retract the ramp, and be ready for the next stop.

Oh, I know! Humanoid robots: a mere $250,000 each, more that the cost of the truck itself. That’ll save a ton of money!


The $40k EV and $25k Ev are aimed at different consumers.
The $25K EV is pointed to the consumer that wants the absolute cheapest reliable mode of transportation.
That type of consumer bought many VW bugs in the 1960’s-1970’s.
IMO there is room for the basic, reliable small EV.
Most EVs sold in China are small in size. And China is the world’s largest
market space for EVs.
BYD will bring out a new lithium battery that is cheaper, lighter, nonexplosive, and smaller in size but has MORE range which bring manufacturing cost down as batteries are the biggest expense of an EV.

Price now is where the battleground is. So cutting production cost while maintaining quality will determine the victor.