I show the financial figures for the electric vehicle and battery manufacturers in China, namely Tesla, BYD, Nio, XPeng, Li Auto and CATL (battery manufacturer).

Tesla, BYD and CATL are profitable. Tesla has the highest profit margin of 15.4%, followed by CATL at 9.3% and BYD at 3.9%.

Three high profile EV startups, namely Nio, XPeng and Li Auto, are still incurring large losses. 

Tesla has cut its prices to boost its sales volume. It will remain profitable in spite of the price cut.

Tesla buys batteries from CATL and BYD for its vehicles. It is able to tap into the innovative battery designs from these manufacturers. Tesla is also developing its own battery design, which will be produced in 2023.

Although Tesla has a higher price earning ratio compared to BYD and CATL, it has the potential to increase its profits due to its sales growth at a fairly attrcative profit margin.

Tan Kin Lian