Tesla CEO Elon Musk expressed confidence in the potential global success of Chinese electric vehicle (EV) manufacturers, emphasizing their competitiveness on a global scale. Speaking during Tesla's earnings call, the tech mogul acknowledged Chinese car companies as the most competitive worldwide and predicted significant success beyond China's borders, contingent on the existence of trade barriers or tariffs.
Despite the intense competition faced by Tesla from Chinese automakers, Elon Musk further suggested that "if there are no trade barriers established, they will pretty much demolish most other companies in the world," as reported by CNBC.
The EU's executive body, the European Commission, is scrutinizing Chinese EV producer subsidies. While the investigation continues, the EU may consider raising tariffs on Chinese EVs as they aggressively enter the European market.
BYD started selling battery-powered vehicles in Europe, the Middle East, and Southeast Asia after outselling Tesla in the fourth quarter. Nio and Xpeng, Chinese firms, have also shown their electric cars at European auto trade shows.
Elon Musk's positive sentiments toward Chinese EV makers are not new, as he had previously lauded them as the most competitive globally. He envisioned these companies becoming major players in the global auto industry, potentially securing the second position after Tesla.
Competition Getting More Intense
The remarks of Elon Musk underscore the rising influence and competitiveness of Chinese electric automakers on the world stage as they continue to expand their footprint and challenge traditional auto firms.
Due to rising EV sales by competitors, Tesla has lowered its sales forecast. Tesla has constantly lowered pricing to boost sales despite increased competition, leading to a 38% rise in 2023 deliveries. Despite this apparent development, Tesla originally established a goal of 50% annual growth over many years.
On Wednesday, the business warned that its "growth rate may be notably lower" in 2024 than in 2023. Tesla (TSLA) shares fell 7.5% premarket Thursday after this statement. In the fourth quarter, Tesla lost its worldwide EV sales lead to BYD for the first time.
Chinese EVs Step-Up Features
Due to intense competition, Chinese EV makers are introducing advanced features and lower prices. Chinese EVs now emphasize consumer electronics, offering features like in-car projectors, refrigerators, and advanced driver-assistance systems.
Unlike Tesla's focus on functionality, Chinese EVs are positioned as entertainment gadgets with advanced tech specs, according to Li Yi, CEO of Appotronics, a laser display company. This trend is illustrated by the recently introduced Huawei Aito M9 SUV, which features a refrigerator, collapsible front seating, and an augmented reality head-up display. Pricing for the electric vehicle ranges from 470,000 to 570,000 yuan ($66,320 to $80,430), lower than Tesla's Model Y and Model S, priced at 258,900 yuan and 698,900 yuan, respectively.
Meanwhile, Li Auto's L9 SUV and Xpeng's G9 SUV are equipped with Augmented reality HUD, refrigerators, and driver-assist tech, aligning with consumer preferences for advanced in-vehicle tech and driver-assistance capabilities.
The dynamic Chinese EV market is set to launch over 100 new models in 2024, reflecting heightened interest in cutting-edge features. Yiming Wang, an analyst at China Renaissance Securities, notes that consumer priorities extend beyond traditional considerations, emphasizing advanced tech, driver-assist features, pricing, and mileage optimization.
Moreover, with more than 60% of the global battery market, China is becoming a more significant player in the EV battery industry, Korea JoongAng Daily reported. Chinese batteries quadrupled their European market share to 34% in 2022 from 15% two years earlier.
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