TMTPost -- Tesla Inc. shares surged 10% on Tuesday after the U.S. electric vehicle (EV) giant narrowly trailed its Chinese arch rival BYD Co. Ltd by quarterly sales.

Credit：BYD

Tesla said it made 410,831 vehicles and delivered 443,956 vehicles for the quarter ended June 30. The delivery volume represented a 4.8% year-over-year (YoY) decline, beating analysts expected 439,000 units, though it jumped 14.8% from the previous quarter. BYD has been closing the sales gap with Tesla. BYD sold 426,000 full-electric vehicles that quarter, 17,596 units fewer than Tesla’s deliveries.

The second quarter saw Tesla’s deliveries recovered from three months ago. Tesla posted in April that its delivery for the first quarter of the year fell 8.5% YoY to 386,810 vehicles, much worse than analysts’ estimates of 454,200 units. The last time the company recorded a sales drop was in the second quarter of 2020 when the Covid-19 pandemic forced it to shut down production. Revenue from March to June this year shed 13% YoY to $21.30 billion, missing Wall Street projection of $22.15 billion. The sales drop was even deeper than Tesla’s last decline in 2020, which was due to disrupted production during the pandemic.

Wells Fargo warned earlier this week that Tesla shares could take a hit in the third quarter owing to its strategy of boosting sales with price cuts. “We remain concerned with recent moderating trends, across all three key regions (U.S., EU, China),” Wells Fargo analysts led by Colin Langan told clients in a note on Monday.Few levers remain to increase volumes outside of pricing & model refreshes, as the company has resorted to financing promotions with seemingly little effect, the analysts wrote. They expected Tesla will deliver 1.55 million units this year, down 14% YoY, and fell short of consensus estimates by 13%.

BYD announced on Monday that it sold 341,658 NEVs, including battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs), in June. China’s top NEV maker for the first time broke its monthly sales record this year. With a 35.02% YoY increase and a 2.97% month-over-month (MoM) increase, the sales were 615 vehicles, or 0.18% more than the previous record set last December. June is the fourth month for BYD to return to monthly sales of more than 300,000 units to the year date. With the highest monthly sales volume among Chinese EV makers, BYD maintained double-digit YoY growth since the beginning of the year.

BYD’s NEV sales rose to a new record of 982,747 units for the second quarter, bringing its cumulative sales for the first half of the year to 1.613 million, up 28% YoY. Price cuts and technology update drove the sales higher. BYD released late May its fifth generation DM (dual mode) hybrid technology for plug-in hybrid electric vehicles with a comprehensive driving range of 2,100 kilometers. In the meantime, the company rolled out two models powered by the new technology, the Qin L DM-i and the Seal 06 DM-i, which use only a third of the fuel consumed by traditional cars and triple the range. Prices range from RMB99,800 ($14,000) to RMB139,800.

BYD’s exports in the second quarter first topped 100,000 units despite increasing trade tensions. BYD launched the Seal EV, its third EV in Japan last week, starting at ¥5.28 million, or around $33,100. The affordable model Seal is expected to reach South Korea by the end of the year.