Without trade barriers, Chinese automakers will “ruin” their global competition, warns Tesla boss Elon Musk. In the last quarter, the Chinese car manufacturer BYD was already able to beat the e-car pioneer from the USA in terms of sales figures.
• Chinese competition for Tesla & Co. is growing
• Elon Musk warns against car manufacturers from China
• Tesla calls for trade barriers
For a long time, Tesla was considered the electric car company par excellence, but for some time now there have been more and more relevant companies in the industry. Tesla boss Elon Musk recently warned of competition from Chinese companies in the field of electromobility as part of the results presentation.
Sobering outlook at Tesla
Tesla’s rapid growth is slowing down; the electric car manufacturer missed Wall Street’s expectations for the past quarter. Tesla now expects a “significant” slowdown in sales growth for the current year. “It is the most sobering outlook from Tesla that I have seen so far,” noted analyst Gene Munster from asset manager Deepwater.
After the figures were presented on the NASDAQ, Tesla shares ended the day more than 12 percent lower at $182.63.
Chinese car manufacturers will “ruin” Tesla & Co.
Without trade barriers, Chinese electric car manufacturers like BYD, which score points with more affordable models but also a broader product range, would put even greater pressure on their global competitors like Tesla. The Chinese car manufacturer BYD, supported by Warren Buffett, had already overtaken Tesla as the world’s best-selling electric car company in the last quarter. BYD sold around 526,400 purely electric vehicles between October and December last year – almost 40,000 more than Tesla.
“Our observation in general is that Chinese automobile companies are the most competitive automobile companies in the world,” Musk said during a recent conference call with analysts as part of the figures. And further: They “will have significant success outside of China, depending on what kind of tariffs or trade barriers are introduced.” Musk warned: “If there are no trade barriers, they will essentially ruin most other car companies in the world. They are extremely good.”
The Tesla boss sees “no obvious possibility for a partnership,” he further emphasized. However, it grants every electric car manufacturer access to the Tesla charging infrastructure. “We are also happy to grant licenses for autonomous driving, perhaps also for other technologies and anything that could help advance the energy transition,” Reuters quoted the head of the US electric car pioneer as saying.
Strong competition in the field of electromobility
Competition in the field of electromobility continues to increase. “The comprehensiveness and resilience of China’s state-run battery materials processing infrastructure, built over several years, is impressive,” Reuters quoted Ross Gregory, partner at Melbourne-based consultancy New Electric Partners, as saying. However, according to the news agency, Spencer Imel, partner at consumer insights firm Lansgton, reminds that Chinese automakers’ brand recognition in the United States remains extremely low, their reliability, durability and safety are mediocre, and they still have a long way to go Road ahead to gain market share in the USA.
But Tesla doesn’t want to give in without a fight. Musk also recently confirmed that the electric car manufacturer would probably start producing its next-generation electric vehicle at its factory in Texas in the second half of 2025. According to Reuters, this is likely to be a cheaper compact crossover for the mass market, codenamed “Redwood” in order to keep up with the cheaper competition.
Nonetheless, what the US and Europe need above all is policy measures – not just trade barriers and tariffs – that would give automakers time to build a diversified supply chain, Reuters continued. The US is currently imposing a 25 percent import tariff on Chinese automakers to keep them out of the US market.
The battle between car manufacturers for supremacy in the electromobility market is likely to remain exciting. Last year, Musk had already expressed criticism of the competition from China: “If I were to guess… a company from China would probably be the second largest behind Tesla.”
Editorial team finanzen.net
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