Like , Elon Musk said on Wednesday that Chinese auto companies pose a serious threat to manufacturers in other parts of the world. He added that the Chinese are “exceptionally good” at producing cars (especially electric ones) and can “succeed outside China.” However, everything depends on the legal conditions.
Elon Musk on Chinese car manufacturers. “They will destroy most other companies”
Musk believes that the strong expansion of Chinese electric producers may accelerate significantly if additional restrictions, such as tariffs and other trade barriers, are not introduced. – If no trade barriers are put in place, they will largely destroy most other car companies in the world. They are exceptionally good, said the billionaire, quoted by Reuters. He added that Chinese cars are “the most competitive”, referring to the low prices of vehicles from the Middle Kingdom.
Musk’s words are a reaction to Tesla’s financial results for the fourth quarter of 2023 announced on Wednesday, which – to put it mildly – do not impress market analysts. The manufacturer of electric vehicles led by a billionaire recorded an increase in revenues, but it was small, only 3%. Numbers? USD 25.17 billion against the expected USD 25.6 billion. Tesla’s margin also dropped to 8.2%. with 16 percent a year before.
However, the company’s net profit doubled – to USD 7.9 billion (USD 3.7 billion a year earlier). However, this was mainly due to a one-time tax equalization of as much as USD 5.9 billion. The station adds that the very slight increase in revenues is the result of the reduced average selling price of cars forced by sharp price reductions around the world in the second half of last year. In reaction to the results announced on Wednesday, Tesla’s shares fell by almost 6%.
Will Chinese electric cars flood Europe and America? Biden: We won’t let that happen
In the last quarter of 2023, the Chinese automotive giant BYD produced 526,000. battery-powered cars (only electric cars, i.e. no hybrids), and Tesla boasted a result of 484,000. pieces. On an annual basis in 2023, BYD overtook Tesla if we take into account both fully electric cars and hybrids (1.6 million electric cars + 1.4 million hybrids in the case of BYD and 1.84 million cars in the case of Tesla).
As we wrote, Chinese brands aimed to conquer the European and American markets, competing with Western producers, among others. lower price and rich offer. It is no secret that local companies receive significant subsidies from the Chinese government, which help reduce the final price of the product. Brussels is already monitoring the situation. In September 2023, the European Commission initiated an anti-subsidy investigation against Chinese car brands. According to regulators, they are subsidized by the Chinese government, which leads to artificially low prices and may ultimately contribute to flooding European markets with cheaper electric cars from Asia.
As EC President Ursula von der Leyen said when announcing the initiation of the investigation, “Europe is open to competition, but not to a race of attrition.” The EC’s investigation may result in the imposition of additional duties on cars exported from China to Europe. As Reuters reminds, similar sentiments prevail overseas. President Joe Biden recently claimed that China is determined to dominate the electric vehicle market, but the U.S. “will not let that happen.”
Source: Gazeta
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