Written by Abhirup Roy
SAN FRANCISCO (Reuters) – Tesla Chief Executive Officer Elon Musk said on Wednesday that the Chinese automaker would “defeat” its global rivals without trade barriers, saying the U.S. electric vehicle market leader He emphasized that the company is facing heat from companies such as BYD, which is rushing to expand globally.
Musk's comments come despite Tesla's deep price cuts through 2023. This was announced in response to the company becoming the best-selling EV company in Japan.
Musk said in a post-earnings conference call with analysts on Wednesday that Chinese car companies are “the most competitive” and that “depending on what tariffs and trade barriers are set, we could have great success outside of China.” We will be able to accommodate that,'' he said.
“If trade barriers are not established, most car companies around the world will go out of business,” he said. “They are very good.”
Mr. Musk has reason to be concerned.
Last year, he triggered a price war to woo consumers hit by high borrowing costs, squeezing Tesla's margins and spooking investors. Musk warned on Wednesday that Tesla is reaching a “natural limit for cost reduction” with its existing lineup.
Tesla plans to begin production of an inexpensive, mass-market compact crossover codenamed “Redwood” in mid-2025 to compete with cheaper rivals, Reuters reported on Tuesday. Musk confirmed Wednesday that Tesla plans to begin producing next-generation EVs at its Texas factory in late 2025.
But Chinese EV makers, who are good at keeping costs down with stable supply chains, are moving quickly. Due to increased competition and overcapacity in China, many companies are now rapidly expanding their overseas locations.
For example, SAIC Motor Corporation is ordering more ships for its fleet in order to reduce transportation costs as it aims to expand sales overseas.
“Automakers like BYD and Nio enjoy high demand in China due to innovations such as in-vehicle technology and battery swapping, even though they have middling reliability, durability, and safety,” Consumer Insights Partner , said Spencer Imel. Solid Langton.
“We believe that will be a key element and differentiator in our future international growth,” Immel said. However, he pointed out that Chinese car companies still have very low brand awareness in the United States.
Musk's comments come as the US presidential election accelerates. President Joe Biden said China is determined to dominate the EV market and “will not allow it.”
Former President Donald Trump, who is seeking the Republican nomination again in this year's presidential election, has announced his intention to double the tariffs if elected, imposing a flat 10% tariff on all imports into the United States and They demanded that the most preferential tariff be withdrawn. Country's trade situation.
Musk said Wednesday that there is “no obvious opportunity” to partner with a Chinese rival, but that Tesla is open to providing access to its charging network and licensing other technologies, such as self-driving. .
Europe has also taken a protectionist stance toward Chinese EV manufacturers. Last year, the European Commission launched an investigation into whether to impose punitive tariffs to protect EU producers from cheaper EV imports from China, which it says benefit from state subsidies.
(Reporting by Abhirup Roy in San Francisco; Additional reporting by Akash Sriram in Bengaluru; Editing by Stephen Coates)
