Monday, March 4, 2024

Elon Musk says China is Tesla’s biggest rival in the EV war

Must read

  • Elon Musk said at the NYT Dealbook conference that Tesla’s biggest rivals are in China, not the US.
  • It comes as BYD looks set to eclipse Tesla as the world’s biggest electric carmaker this year.
  • Musk said that the manufacturing prowess of Chinese car companies made them “extremely competitive.”

Chinese car companies are Tesla’s biggest rivals in the battle for EV supremacy, according to Elon Musk.

The billionaire said at The New York Times’ Dealbook conference on Wednesday that China is by far Tesla’s most competitive market, as Chinese EV manufacturer BYD prepares to eclipse Tesla as the world’s biggest electric carmaker this year.

“Electric car sales in China are gigantic … the Chinese car companies are extremely competitive,” said Musk.

“By far Tesla’s competition is in China. There’s a lot of people out there who think that the top 10 car companies are going to be Tesla followed by nine Chinese car companies. I think they might not be wrong,” the Tesla CEO added.

Musk said that the manufacturing prowess of Chinese EV companies meant that China was Tesla’s most competitive market.

“China is super good at manufacturing, and the work ethic is incredible. If we consider different leagues of competitiveness at Tesla, we consider the Chinese league to be the most competitive,” he said.

China is the world’s most important EV market, accounting for 59% of global sales in 2022, according to the World Economic Forum.

It’s also especially important to Tesla, which opened a flagship gigafactory in Shanghai in 2019.

The company’s large presence in China has come under scrutiny in recent years over fears that it could provide the Chinese government with leverage over Musk and his other companies — something the SpaceX boss and X owner refuted in the Dealbook interview.

“Tesla has one of four factories in China, and China is a quarter of our market,” he said.

“The same is true, by the way, of all the other car companies — they also have something in the order of a quarter of their sales in China. So if that’s a problem for Tesla it’s a problem for every car company.”

Tesla has dominated the global EV market for years, selling 1.3 million cars worldwide last year with Musk aiming to sell 20 million a year by 2030.

However, its position is now being threatened by Chinese automakers such as BYD.

The Warren Buffett-backed EV manufacturer, which does not sell its cars in the US, looks set to take Tesla’s crown as the world’s top seller of electric cars, having sold just 3,000 fewer EVs than Tesla in the three months to September 30.

BYD has been able to capitalize on surging Chinese demand for EVs by offering more affordable options than US rivals like Tesla.

The company’s Seagull hatchback, which launched this year and has quickly become the fourth best-selling EV in China, costs around 74,000 yuan ($10,000). Tesla’s cheapest EV in this market is the Model 3, which starts at around 259,900 yuan ($36,000).

The booming Chinese market, which also includes other Tesla challengers like Wuling and Zeekr, stands in contrast to the US EV market.

Major US automakers are cutting spending and ditching targets in the face of slowing demand for electric vehicles, with Ford postponing $12 billion in investment and General Motors abandoning its target of building 500,000 EVs by mid-2024.

Despite this, sales are on the rise, with more than 1 million electric vehicles expected to be sold in the US this year for the first time, according to Atlas Public Policy.

Tesla did not immediately respond to a request for comment from Business Insider, made outside normal working hours.

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