Core Viewpoint - Tesla Inc reported a 13.5% year-over-year decline in vehicle deliveries for the second quarter, with significant impacts attributed to the Chinese market [1] Group 1: Delivery Performance - Tesla's vehicle deliveries in the second quarter were down 4.3% quarter-over-quarter and down 11.7% year-over-year, totaling 128,803 vehicles delivered in China [2] - The company experienced a decline in first-quarter deliveries as well, indicating ongoing demand struggles globally [1] Group 2: Market Dynamics - Despite initial expectations that the Model Y refresh and discounts would boost demand in China, the anticipated increase in deliveries did not materialize [3][5] - Tesla offered record discounts, including 0% financing on the Model 3 and Model Y during parts of the second quarter, yet this did not lead to improved sales [5] Group 3: Competitive Landscape - Tesla faces increasing competition in China from local manufacturers such as Xpeng and Xiaomi, which offer electric vehicles priced lower than the Model Y, contributing to the decline in demand [6] - The competitive pressure in China is compounded by brand damage and boycotts faced in Europe and the U.S. [6]

Core Viewpoint - Tesla is experiencing declining demand for its vehicles in the United States due to increased competition from foreign automakers, particularly Hyundai, which is gaining market share in the electric vehicle (EV) segment [1][2][8] Group 1: Tesla's Performance - Tesla reported second-quarter deliveries of 384,122 units, reflecting a 13.5% decrease year-over-year [1] - In 2024, Tesla had the two top-selling EVs in the U.S., but faced challenges as Hyundai's Ioniq 5 became the fourth-best-selling EV with 44,400 units sold, marking a 30.9% increase year-over-year [6] Group 2: Hyundai's Growth - Hyundai achieved record sales in the U.S. with 439,280 vehicles sold in the first half of 2025, representing a 10% increase year-over-year [2][3] - The Ioniq 5 EV had sales of 19,092 units in the first half of the year, up 2% year-over-year, while the Ioniq 9 began deliveries in May with 1,013 units sold [4] - Hyundai's U.S. EV market share reached 4.7% in 2024, trailing only Tesla (48.7%), Ford (7.5%), and Chevrolet (5.2%) [7] Group 3: Competitive Strategies - Hyundai's new EV plant in Georgia has the capacity to produce up to 300,000 vehicles annually, with potential expansion to 500,000 units [4] - The company has been reducing lease prices for the Ioniq 5, making it one of the most affordable EVs on the market, with deals starting at $170 per month [5] - Hyundai's increasing lineup of American-made vehicles and new marketing campaigns are contributing to its growing momentum in the EV market [4][8]

Investment Rating - The report assigns a "Buy" rating for BYD Co. with a 12-month price target of Rmb424 for A shares and HK$416 for H shares, indicating an upside potential of 11.3% for A shares and a downside of 2.2% for H shares [11][12]. Core Insights - The impact of BYD's "618" promotions on its sales may be less severe than initially feared, as the price reductions include existing government and OEM trade-in subsidies [2][3]. - The promotion affects 12 models with an average price reduction of Rmb10k, translating to a 9% discount, which could lead to an estimated Rmb2.6 billion impact on BYD's top line, equating to 5% of the projected net profit for 2025 [3][4]. - If competitors follow suit with similar pricing strategies, the potential impact on BYD could escalate to Rmb12.4 billion [4]. Summary by Sections Promotion Impact - BYD's "618" promotions involve discounts on 22 models, primarily priced below Rmb200k, with limited-time pricing until the end of June [1]. - The average blended ASP of the 12 models affected is Rmb114k, and these models accounted for significant portions of BYD's volume, revenue, and gross profit in Q1 2025 [3]. Financial Estimates - Following the promotion announcement, net profit estimates for 2025E-2027E have been reduced by 3%-5%, and target prices have been adjusted downwards by 3% [6]. - The report provides updated revenue forecasts, projecting Rmb777.1 billion for 2025, with a gradual increase to Rmb1.18 trillion by 2027 [11]. Competitive Landscape - The report highlights that traditional OEMs dominate the NEV sales volume mix in the below Rmb200k segment, indicating a competitive pricing environment [5][10]. - BYD's market position is reinforced by its strong competitive moat due to its vertical integration business model, positioning it as a leading global auto OEM [8].