Did BYD Just Say "Checkmate" to Tesla?

Electric car maker Tesla (NASDAQ: TSLA) has been under all sorts of pressure in 2025. The stock is trading down nearly 33% so far this year (as of March 26), and several analysts seem torn on the company. Some think the sell-off is overblown and that Tesla has numerous catalysts ahead. Others are very concerned about first-quarter deliveries and how CEO Elon Musk's involvement in government affairs is affecting the company.

Meanwhile, Chinese electric car maker BYD Company (OTC: BYDDY) just reported a huge quarter. Did BYD just say "checkmate" in the electric vehicle (EV) chess match they are playing with Tesla?

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Sales at BYD just rocketed past Tesla

Tesla has become a battleground stock, with 14 analysts issuing a buy rating over the last three months and 11 saying to sell the stock, according to TipRanks. Several data points have led some analysts to believe that Tesla could report one of its worst quarters of deliveries in over three years. Earlier this month, JPMorgan Chase analyst Ryan Brinkman cut his first-quarter delivery forecast from 444,000 units to 355,000, which would represent an 8% decline year over year.

While the debate goes on, BYD just reported its fourth-quarter earnings. The company reported full-year profits that grew 34% year over year and revenue that leaped 29%. BYD's full-year revenue of $107 billion topped Tesla, which generated just under $98 billion. BYD, which is Tesla's main rival in China, also delivered 1.76 million battery EVs in 2024, compared to Tesla's 1.79 million. BYD's total deliveries were 4.27 million. BYD also continues to outpace Tesla in sales in China.

While there has been a lot of talk over whether Musk's involvement in politics has had negative ramifications for Tesla, BYD also appears to be winning with its competitive product offerings. For instance, BYD recently launched a new electric vehicle that has a driving range of roughly 340 miles and starts at a price equivalent to $16,524. Tesla's least expensive vehicle is nowhere near that cheap.

BYD also has reportedly built a new charging system called the Super e-Platform, which can charge one of its vehicles with 250 miles of driving power in just five minutes. Tesla's fastest charger can only do a quarter of this.

Will Tesla be forced to concede defeat?

While Tesla's stock has struggled this year, share prices of BYD have risen nearly 53%. BYD stock also still trades at a much cheaper multiple on a price-to-earnings basis (as of March 24).

Data by YCharts.

Much of the hype around Tesla remains focused on future catalysts related to the company's self-driving division and robotics division. Tesla is planning to build robots that can take care of household chores. At a recent company meeting, Musk reportedly told employees that it will make its first 5,000 Optimus robots this year and that its autonomous long-haul truck will also be extraordinarily profitable.

A lot of these products seem to have immense potential and certainly could be material drivers of revenue and profits at the company if they come to pass. So I don't think BYD's recent accomplishments are necessarily checkmate for Tesla. That said, I think the bigger issue at hand is that Tesla seems to be losing ground in its core business, which it has been a leader in.

It's concerning to see investors placing such a high emphasis on future businesses that haven't yet made any revenue for the company when the core business seems to be slowing. I think the even bigger issue is the valuation. Tesla's stock rocketed higher right after Donald Trump won the U.S. presidential election, for no apparent reason other than Musk's ties to the president and potential regulatory windfalls. So the sell-off this year does not strike me as that harsh, and the valuation still looks quite elevated. I think Tesla still has many hurdles to overcome to warrant such a valuation. Meanwhile, any slip-ups could lead to a big sell-off, leaving Tesla with an unfavorable risk-reward proposition.

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JPMorgan Chase is an advertising partner of Motley Fool Money. Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends JPMorgan Chase and Tesla. The Motley Fool recommends BYD Company. The Motley Fool has a disclosure policy.