Tesla's Halved Profits vs. BYD's B-Class Blitz: A Final Dialogue on Valuation Logic

Late last night, I chatted with the CEO of a new EV startup in a teahouse on the East Third Ring Road until 1 AM. He put down his phone, which displayed news of Tesla's per-vehicle profit plummeting by 40%, and said something I haven't forgotten to this day: "Mr. Shen, do you think Tesla's moat is technology, or gross margin?"

That question is sharp. Because just a day prior, I had finished reading a BYD supply chain research memo, which mentioned that the BOM cost of the Qin MAX B-class fast-charging sedan was a full 30% lower than the same-tier Model 3. And Hainan announced it would become the first province to ban fuel cars, meaning by 2030, gas stations on that island will completely lose private car customers.

Putting these three things together isn't a coincidence; it's a signal. The valuation logic of the EV industry is switching from "tech premium" to "manufacturing efficiency," and the ceiling of the entire track will be redefined by cost control capabilities.

Tesla's 40% Profit Plunge is the Start of "De-bubbling"

Let's look at Tesla first. Per-vehicle profit in FY2025 dropped 40%, narrowing the gap with Toyota to less than 10,000 RMB. On the surface, it's due to US tariffs and slowing demand, but the deep-seated issue is: Tesla's "tech company" valuation is being pulled back to reality by manufacturing.

Over the past five years, the market valued Tesla as "Tech Company + Auto Company," giving the tech part a 50x P/E and the auto part only 15x. But the profit plunge means Tesla's "tech premium" is being diluted. When FSD (Full Self-Driving) fails to achieve large-scale commercialization, when 4680 battery yield remains consistently below CATL, and when Cybertruck deliveries fall far short of expectations, investors start asking: Why should you be twice as expensive as Toyota?

More critically, Tesla's moat is narrowing. Previously, it built barriers through first-mover advantage, direct sales models, and software services, but now BYD, NIO, and XPeng are desperately catching up in intelligence, and cost control capabilities—Tesla's proud "giga casting"—have been rapidly replicated by the Chinese supply chain. Last time I visited a die-casting equipment factory in Shenzhen, their technical director said bluntly: "We've basically bypassed Tesla's patents, and our yield rates are higher."

BYD's Blitz in the B-Class Segment is an Annihilation War on "Valuation Logic"

Now look at BYD. The Qin MAX B-class fast-charging sedan has an interesting name. Qin is the entry-level model of the Dynasty Series, MAX represents size upgrades, and B-class means it aims to kill directly into Model 3's core price band (150k-200k RMB). More crucial is "fast charging"—800V high-voltage platform + self-developed silicon carbide modules, providing 400km range with 10 minutes of charging. These parameters are crushing in the sub-200k RMB market.

From a financial perspective, let's do the math: BYD Qin PLUS has a gross margin of approx. 18-20%, while Qin MAX, through shared platforms and scale, is expected to achieve a gross margin of 22-25%. This means BYD can price 40-50k RMB cheaper than Model 3 while still earning more money. This isn't "cost-performance ratio"; this is "cost structure advantage."

Meanwhile, Tesla's Model 3 gross margin has fallen to around 15%. If BYD continues to cut prices, Tesla has only two paths: follow suit and see profits decline further; or refuse to follow and watch market share get eaten away. Any rational investor would choose to sell Tesla and buy BYD.

Hainan's Fuel Ban is the "Last Mile" of Policy Signals

Hainan becoming the first confirmed province to ban fuel car sales, set for 2030, is five years ahead of the national plan. As an investor, what I see is: Policy has shifted from "encouragement" to "forced promotion."

But what's more worth noting is that Hainan's ban uses "registration management" rather than a "blanket prohibition"—meaning existing fuel cars are unaffected, but new vehicles must be NEVs. This "gentle hard constraint" is precisely the smartest policy design. It avoids social backlash while thoroughly shifting consumer psychological expectations. When the country's largest free trade zone does this, it's only a matter of time before other provinces follow suit.

Investment Judgment: Three Core Conclusions

First, Tesla's valuation logic has collapsed. It is no longer a tech company but a high-cost automaker. If FSD cannot achieve large-scale commercialization before 2028, Tesla's stock price might halve again. I will gradually reduce holdings in Tesla-related assets over the next six months.

Second, BYD is becoming the "TSMC of the Auto Industry." Its cost control capability, depth of vertical integration, and product iteration speed have constructed a "manufacturing barrier." While other automakers are still worrying about chips and batteries, BYD can already self-develop silicon carbide, own lithium mines, and produce IGBTs. This "full-industry-chain profit" model gives it confidence in any price war. I recommend going all-in on BYD and its supply chain in this track.

Third, The B-class car market is the decisive battleground. Qin MAX is just the beginning; there will be Han B, Tang B, and a series of products afterward. This market has the largest capacity (accounting for 40% of total passenger vehicles), thickest profits, and fiercest competition. Whoever achieves "cost leadership + tech leadership" in this market will become the next combination of Toyota + Tesla.

In a nutshell: Tesla's profit halving is not a cyclical issue but a structural one; BYD's offensive in the B-class segment is not a tactical move but a generational shift in valuation logic. When manufacturing efficiency replaces tech premium as the core pricing factor, the investment paradigm of the entire automotive industry will be fundamentally reconstructed.

Original Link: https://www.ithome.com/0/976/261.htm