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

For these seeking to put money into electrical autos (EVs) and autonomous autos nevertheless, I believe it’s value contemplating one other inventory. This one’s held by legendary investor Warren Buffett, and immediately 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’ll have seen BYD’s EVs round in recent times. They’re fairly slick, and changing into highly regarded with shoppers. This reputation is illustrated by the corporate’s latest gross sales figures. In 2024, the corporate offered 1.76m EVs, a rise of about 10% yr on yr. Total, it offered a report 4.3m autos in 2024, up 41% yr on yr.

As for Tesla, it offered 1.79m automobiles 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 automobiles within the first quarter of 2025. That determine exceeds the corporate’s complete 2024 UK gross sales quantity. So its automobiles are clearly well-liked with Britons. Turning to Tesla, its UK gross sales have been weak this yr – in January they had been down 7% yr on yr.

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. Be aware that Tesla’s 2024 income was solely up 1% yr on yr.

Loads to be enthusiastic about

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

Low valuation

Maybe the most effective factor about BYD inventory nevertheless, is its valuation. At present, it trades on a price-to-earnings (P/E) ratio of 25, falling to 21 utilizing subsequent yr’s earnings estimate. That’s a a lot decrease valuation than Tesla has, which is presently buying and selling at 98 occasions this yr’s forecast earnings and 73 occasions subsequent yr’s.

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

Dangers to think about

After all, there are many dangers to think about with BYD. One is competitors from different producers. In the present day, just about each main auto producer is producing EVs and competitors’s intense.

One other is tariffs. EU tariffs on its passenger automobiles, and US tariffs on its buses and vans might damage earnings. A serious international recession is one other threat. When financial situations weaken, shoppers have a tendency to carry off on the acquisition of recent autos.

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