Tesla vs. BYD: Elon Musk warns of fierce rivalry and the impending collapse of Chinese automakers

Tesla vs. BYD: Elon Musk warns of fierce rivalry and the impending collapse of Chinese automakers

Tesla vs. BYD: Elon Musk warns of fierce rivalry and the impending collapse of Chinese automakers

Elon Musk, the CEO of Tesla, has highlighted the fierce competition confronting the US leader in the electric car industry by announcing that Chinese manufacturers might surpass global competitors in the absence of trade obstacles.

Elon Musk, the CEO of Tesla, said on January 24 that "Chinese automakers should 'demolish' global rivals without trade barriers," referring to the fierce competition that the leading US electric car market player, BYD, is facing from its aggressive worldwide expansion. Report by Reuters.

According to the source, Elon Musk's remarks come after BYD, which is funded by Warren Buffett, recently became the world's best-selling electric vehicle (EV) manufacturer last quarter despite a large price decrease in 2023 because to its more inexpensive models and diversified portfolio. as abandoned.

Elon Musk claims that Chinese automakers are "the most competitive" and that, depending on trade obstacles, they may succeed greatly outside of China. The article went on to say that he stressed the possibility that Chinese automakers may surpass most of their international competitors in the absence of such restrictions, characterizing them as "extremely good."

In reaction to Musk's remarks, the Chinese Foreign Ministry emphasized the need of preserving an impartial, open, and fair business environment while acknowledging that it was unaware of the claims during a regular briefing on January 25.

Investors are becoming concerned about Tesla's profit margin compression as a consequence of Musk's pricing battle, which he started last year to entice customers with expensive financing fees. Tesla is getting close to "the natural limit of cost reduction" with its existing portfolio, Musk warned on Wednesday.

Musk said that Tesla intended to launch a mass-market small crossover with a lower price tag, nicknamed "Redwood," in the middle of 2025 to take on competitors with lower prices. However, Tesla is up against more competition as Chinese EV manufacturers are skilled at controlling costs and quickly growing their global footprint.

Industry analysts claim that although Chinese automakers are making headway thanks to their competitive pricing as well as stable supply chains, their low brand awareness in the US and perceived issues with durability, safety, and reliability are impeding their efforts to gain market share in the US. Can't.

Musk's remarks come as momentum is building for the US presidential race. Concerned about China's intention to control the EV industry, President Joe Biden promised not to allow it to happen. A potential Republican nominee and former president Donald Trump has indicated that he would be prepared to levy high taxes on Chinese goods if elected.

Musk made it plain on Wednesday that there isn't a viable chance to collaborate with Chinese competitors right now. However, Tesla is willing to provide Chinese businesses access to its network of charging stations and licenses for technology such as self-driving cars.

Protectionist sentiments against Chinese electric vehicle (EV) producers have surfaced in Europe; the European Commission is looking at applying tariffs to offset the purported advantages of state subsidies for Chinese EV imports.

Industry experts argue that rather than imposing tariffs, the US and Europe should implement measures that help domestic automakers gradually develop broad supplier networks.