During Tesla's recent earnings call, Elon Musk openly acknowledged and showed respect for the competition posed by Chinese automakers. In response to a question from Morgan Stanley analyst Adam Jonas, Musk emphasized that, if not for restrictions, Chinese car manufacturers could potentially dominate the global market.
As Tesla's primary vehicle export hub, Gigafactory Shanghai has given Musk and his team firsthand experience with the intensity of the Chinese auto market. Despite Tesla's success with the Model 3 and Model Y in China, the growing competition from companies like BYD is undeniable. Jonas raised the topic of Chinese automakers during the earnings call, asking about their potential success in Western markets and the possibility of collaboration between Tesla and a Chinese OEM to boost sustainable transport adoption.
Musk's response was straightforward. He stated that, based on his observations, Chinese car companies are the most competitive globally. Musk expressed a willingness to assist other electric vehicle makers, particularly in areas like the Supercharger Network and Full Self-Driving technology.
In Musk's words: "Our observation is generally that the Chinese car companies are the most competitive car companies in the world. So I think they will have significant success outside of China depending on what kind of tariffs or trade barriers are established. Frankly, I think if there are no trade barriers established, they will pretty much demolish most other companies in the world. So, they’re extremely good."
He also highlighted Tesla's openness to collaborating with other electric car companies by providing access to the Supercharger Network and licensing technologies to advance sustainable energy.
Musk's assessment of Tesla's Chinese rivals is well-grounded, considering his intimate familiarity with the competitive landscape of China-based automakers. This competitiveness is evident in the rise of BYD, which surpassed Tesla as the world's largest maker of battery electric cars in the fourth quarter of 2024. With Tesla yet to produce its affordable car, the gap in battery electric vehicle volumes between the two companies is expected to widen in the coming quarters.
--------The article excerpted from TESLARATI.