Looking at Tesla stock? Consider this Warren Buffett-held EV rival instead

Tesla (NASDAQ: TSLA) inventory continues to be a well-liked funding. And I can perceive why – at present it’s practically 50% off its highs.

For these trying to put money into electrical automobiles (EVs) and autonomous automobiles nonetheless, I believe it’s value contemplating one other inventory. This one’s held by legendary investor Warren Buffett, and at the moment it trades at a much more enticing valuation than Tesla.

BYD’s gross sales are surging

The inventory I’m speaking about is BYD (OTC: BYDD.Y). It’s a Chinese language EV producer that has inventory market listings in each China and the US.

You might have seen BYD’s EVs round lately. They’re fairly slick, and turning into very fashionable with customers. This recognition is illustrated by the corporate’s latest gross sales figures. In 2024, the corporate offered 1.76m EVs, a rise of about 10% 12 months on 12 months. Total, it offered a report 4.3m automobiles in 2024, up 41% 12 months on 12 months.

As for Tesla, it offered 1.79m vehicles in 2024 (all EVs), a lower of about 3%.

Right here within the UK (the place it launched its EVs in March 2023), BYD offered 9,271 vehicles within the first quarter of 2025. That determine exceeds the corporate’s total 2024 UK gross sales quantity. So its vehicles are clearly in style with Britons. Turning to Tesla, its UK gross sales have been weak this 12 months – in January they have been down 7% 12 months on 12 months.

Zooming in on revenues, BYD’s are surging. For 2024, its high line jumped by 29% to CNY777bn ($107bn). This topped the $97.7bn reported by Tesla. Notice that Tesla’s 2024 income was solely up 1% 12 months on 12 months.

So much to be enthusiastic about

Looking forward, there are many causes to be bullish. Lately, BYD launched a low value mannequin (the Qin L) to tackle Tesla’s Mannequin 3. In the meantime, earlier this 12 months the corporate launched new battery charging expertise, which might cost an EV in simply 5 minutes. It additionally introduced that its superior driver-assistance expertise (‘God’s Eye’) could be accessible free in all its fashions.

Low valuation

Maybe one of the best factor about BYD inventory nonetheless, is its valuation. Presently, it trades on a price-to-earnings (P/E) ratio of 25, falling to 21 utilizing subsequent 12 months’s earnings estimate. That’s a a lot decrease valuation than Tesla has, which is at present buying and selling at 98 instances this 12 months’s forecast earnings and 73 instances subsequent 12 months’s.

So on a relative foundation, there seems to be a number of worth right here.

Dangers to think about

In fact, there are many dangers to think about with BYD. One is competitors from different producers. Right now, just about each main auto producer is producing EVs and competitors’s intense.

One other is tariffs. EU tariffs on its passenger vehicles, and US tariffs on its buses and vans might harm income. A serious international recession is one other threat. When financial circumstances weaken, customers have a tendency to carry off on the acquisition of recent automobiles.

All issues thought-about nonetheless, I believe this inventory has a number of potential and is value wanting at. For me, it’s a safer wager than Tesla.