Elon Musk Warns of Chinese Electric Car Brands' Potential to "Demolish" Rivals as Tesla Earnings Decline

[Social Media]

 

Tesla, once the world's most valuable automaker, is facing challenges to its sales growth targets amidst increasing competition from Chinese electric car brands. In its recent earnings report, Tesla acknowledged a slower growth rate for 2024 compared to previous years, marking a departure from its ambitious sales projections. The company's shares dropped by 7.5% in premarket trade following the announcement.

 

Tesla's growth rate for 2023 was 38%, falling short of its earlier target of achieving a 50% annual growth rate over several years. Elon Musk, Tesla's CEO, conceded that Chinese carmakers, particularly BYD, are becoming formidable competitors globally and predicted they could "demolish" most other car companies without trade barriers. BYD recently surpassed Tesla in global electric vehicle (EV) sales during the fourth quarter of 2023.

 

Musk, who once dismissed Chinese EV brands, now recognizes them as "the most competitive car companies in the world" and foresees their significant success beyond China. BYD, backed by Warren Buffett, has expanded into international markets, pledging to open a factory in Hungary. The growing influence of Chinese automakers, including BYD, has prompted an anti-dumping investigation by EU officials, potentially resulting in higher tariffs.

 

Tesla's slower growth rate projection for 2024 is attributed to its focus on launching the next-generation vehicle, likely a more affordable model. The company's most recent vehicle, the Cybertruck pickup, faced production delays and challenges due to its manufacturing complexity. Musk acknowledged that the ramp-up for the Cybertruck to become profitable might take longer than other models.

 

Despite the slowdown in growth and disappointing earnings, Musk remains optimistic about Tesla's future. The company reported adjusted earnings of 71 cents a share, slightly below analysts' forecasts, and a 40% decline from the previous year. Revenue for the quarter reached $25.2 billion, up only 3% from a year earlier, reflecting the impact of lower average sales prices resulting from price cuts.

 

Tesla's evolving market dynamics underscore the intensifying competition in the electric vehicle sector and the formidable position of Chinese automakers in reshaping the global automotive landscape.

 

26.01.24

Source

 

[impulse]

Here in China I see lots of Teslas.  And lots of BYDs.

 

I don't think Tesla has to worry about BYD as an existential threat.  Ford and GM?  They're toast unless there are more trade barriers erected.

[sirineou]

4 minutes ago, impulse said:

Ford and GM?  They're toast unless there are more trade barriers erected.

there is already a 27.5% tariff on Chinese cars in the US. And I don't think (but not sure) Chinese made EVs qualify for the tax credit. 

Europe has a 10% tariff and just announced 

"EU's Von der Leyen Announces Anti-Subsidy Probe Into Chinese EVs "

 

[hotchilli]

2 hours ago, impulse said:

Here in China I see lots of Teslas.  And lots of BYDs.

 

I don't think Tesla has to worry about BYD as an existential threat.  Ford and GM?  They're toast unless there are more trade barriers erected.

My neck of the woods I've seen more Chinese affordable EV's, only Two Teslas 

[JBChiangRai]

6 minutes ago, hotchilli said:

My neck of the woods I've seen more Chinese affordable EV's, only Two Teslas 

 

BYD are outselling Tesla by a factor of 10 in Thailand.  It's Tesla's own fault, half a dozen price cuts everywhere except Thailand.  Tesla cars are a little old looking now.

Edited January 26 by JBChiangRai
context

[impulse]

2 minutes ago, hotchilli said:

My neck of the woods I've seen more Chinese affordable EV's, only Two Teslas 

 

Where's that?  Not doubting you, just curious where that's happening.

 

The fact that I see so many Teslas in China, where Chinese EVs are so much cheaper indicates to me that there's a market for a premium product, even at a higher price.  "Premium" could mean better quality, or just more status.  Tesla delivers that.  GM and Ford don't.

 

 

[JBChiangRai]

1 minute ago, impulse said:

 

Where's that?  Not doubting you, just curious where that's happening.

 

The fact that I see so many Teslas in China, where Chinese EVs are so much cheaper indicates to me that there's a market for a premium product, even at a higher price.  "Premium" could mean better quality, or just more status.  Tesla delivers that.  GM and Ford don't.

 

 

 

I drove both Tesla Model 3 and BYD Seal when buying, there was no comparison, the Seal was far more comfortable and a superior car.

[impulse]

1 minute ago, JBChiangRai said:

BYD are outselling Tesla by a factor of 10 in Thailand.

 

Scooters probably outsell cars by a factor close to 10 in Thailand, too.  That's an entirely different economic environment than the US and EU.

 

[KhunLA]

Competition is a bi-atch.  As MG found out here/TH.

 

As BYDs & GWMs get sent internationally, Tesla is definitely feeling it.  I was surprised of some of the QC issues that came out of the factory, the on YT'er pointed out.  For the price, no, they shouldn't exist.

 

Fit & finish and cost of some parts,, from another vid, owner having for years, loves it, but cost of some of the replacement/upgrade parts over those years were eye watering. 

 

 

Edited January 26 by KhunLA

[ozimoron]

TSLA stock is crashing. 12% last night alone. This is capitulation. Investors have woken up that Musk is all hype and that TSLA is not an AI company, it's an EV company.

[impulse]

1 minute ago, JBChiangRai said:

I drove both Tesla Model 3 and BYD Seal when buying, there was no comparison, the Seal was far more comfortable and a superior car.

 

I like the BYD's, especially for the price.  I'm more likely to buy one of them than a Tesla.  But I'm a cheap buzzard.  Let's see how they hold up over a few years' time and a few tens of thousands of km.

 

The ones that really intrigue me are the Wuling's that sell for about $5,000 in China here.  They're so ugly they're cute.  Horrible range of about 100 miles.  2 doors and tiny.  Perfect for an in-town car where space is scarce.  But I doubt they'd pass highway crash tests...  Still, if I could buy one in the states, they'd be perfect for my daily 20 mile round trips to the store and back, where I never get close to highway speeds.

 

 

 

[hotchilli]

14 minutes ago, impulse said:

 

Where's that?  Not doubting you, just curious where that's happening.

 

The fact that I see so many Teslas in China, where Chinese EVs are so much cheaper indicates to me that there's a market for a premium product, even at a higher price.  "Premium" could mean better quality, or just more status.  Tesla delivers that.  GM and Ford don't.

 

 

My profile should show Nakhon Pathom province, one hour west of Bangkok

[Dickie Dee]

9 hours ago, Social Media said:

 

Tesla, once the world's most valuable automaker, is facing challenges to its sales growth targets amidst increasing competition from Chinese electric car brands. In its recent earnings report, Tesla acknowledged a slower growth rate for 2024 compared to previous years, marking a departure from its ambitious sales projections. The company's shares dropped by 7.5% in premarket trade following the announcement.

 

Tesla's growth rate for 2023 was 38%, falling short of its earlier target of achieving a 50% annual growth rate over several years. Elon Musk, Tesla's CEO, conceded that Chinese carmakers, particularly BYD, are becoming formidable competitors globally and predicted they could "demolish" most other car companies without trade barriers. BYD recently surpassed Tesla in global electric vehicle (EV) sales during the fourth quarter of 2023.

 

Musk, who once dismissed Chinese EV brands, now recognizes them as "the most competitive car companies in the world" and foresees their significant success beyond China. BYD, backed by Warren Buffett, has expanded into international markets, pledging to open a factory in Hungary. The growing influence of Chinese automakers, including BYD, has prompted an anti-dumping investigation by EU officials, potentially resulting in higher tariffs.

 

Tesla's slower growth rate projection for 2024 is attributed to its focus on launching the next-generation vehicle, likely a more affordable model. The company's most recent vehicle, the Cybertruck pickup, faced production delays and challenges due to its manufacturing complexity. Musk acknowledged that the ramp-up for the Cybertruck to become profitable might take longer than other models.

 

Despite the slowdown in growth and disappointing earnings, Musk remains optimistic about Tesla's future. The company reported adjusted earnings of 71 cents a share, slightly below analysts' forecasts, and a 40% decline from the previous year. Revenue for the quarter reached $25.2 billion, up only 3% from a year earlier, reflecting the impact of lower average sales prices resulting from price cuts.

 

Tesla's evolving market dynamics underscore the intensifying competition in the electric vehicle sector and the formidable position of Chinese automakers in reshaping the global automotive landscape.

 

26.01.24

Source

 

No business has a “right” to exist. Build your dreams. 

[Purdey]

9 hours ago, Social Media said:

BYD, backed by Warren Buffett

Seems like he is not backing America. Ironic.

[spidermike007]

I'm not an expert so I don't know all the reasons for the drop in sales, but I do know that the newer models are much uglier than the previous models and I do know that the interior of a Tesla is very cheap and junky looking. It's does not have any level of luxury, feel cheaply made, and the only thing that's the tiniest bit interesting in the interior is the display monitor. that's it. Otherwise the car feels really junky. 

[JBChiangRai]

19 minutes ago, spidermike007 said:

I'm not an expert so I don't know all the reasons for the drop in sales, but I do know that the newer models are much uglier than the previous models and I do know that the interior of a Tesla is very cheap and junky looking. It's does not have any level of luxury, feel cheaply made, and the only thing that's the tiniest bit interesting in the interior is the display monitor. that's it. Otherwise the car feels really junky. 

Tesla doesn’t have the margins to compete with BYD who make everything from plastics to semiconductors in house.

 

If Tesla can’t compete, how will that play out with American, German and Japanese auto manufacturers who can’t even manufacture cars for the price Chinese manufacturers retail them.

 

The world is changing (I feel it in the water, I feel it in the earth, and I smell it in the air).

Edited January 26 by JBChiangRai

[vinny41]

2 hours ago, JBChiangRai said:

Tesla doesn’t have the margins to compete with BYD who make everything from plastics to semiconductors in house.

 

If Tesla can’t compete, how will that play out with American, German and Japanese auto manufacturers who can’t even manufacture cars for the price Chinese manufacturers retail them.

 

The world is changing (I feel it in the water, I feel it in the earth, and I smell it in the air).

I think you will find that Chinese global dominance will be curtailed by rules regulations and import taxes

Some auto manufacturers have tried to circumvent USA 1964 chicken wire tax ( light trucks ) and most times they have failed with having to pay huge back taxes and  penalties

In Turkey the cheapest new car is an ICE kia picanto 1.0 manual at B954K

Chinese auto imports into Turkey come with a whopping 50% customs duty

China is the largest EV exporter to Turkey.

During January-October, China is believed to have sold $184 million worth of EVs to Turkey, almost double the figure in the whole of 2022. Such imports are subject to a 50% customs duty, after Turkey added a 40% tariff on Chinese EV imports earlier this year.  

https://www.seaisi.org/details/23996?type=news-rooms

It should be remembered  global dominance doesn't always bode well for the end consumer thinking about early 70s when the Bunker Hunts tried to corner and control the price of Silver

[ozimoron]

8 hours ago, Purdey said:

Seems like he is not backing America. Ironic.

 

Where are most Teslas made?

[spidermike007]

Things are rapidly changing in China, the economy is in big trouble, millions of people are leaving the urban centers to go back to the farms, and villages, and who knows what the future holds for them? It's very possible that communism could completely collapse, Xi will be exiled with his billions, and the whole Politburo and CCP will be dismantled. One can only hope and dream. 

 

Lock up the commie organ harvesters! 

[The Theory]

EV will be replaced by hydrogen powered vehicles. Hydrogen is greener than electric. But as usual auto industry need to make $ as much as possible by EVs before next generation. EV life span is noting near diesel, but buyers idea is saving on fuel cost. In the US EVs are pretty much all "leased", not owned. That's why it makes a big difference. We will see how much repair cost of EVs will be after warranty period. 

[ozimoron]

31 minutes ago, The Theory said:

EV will be replaced by hydrogen powered vehicles. Hydrogen is greener than electric. But as usual auto industry need to make $ as much as possible by EVs before next generation. EV life span is noting near diesel, but buyers idea is saving on fuel cost. In the US EVs are pretty much all "leased", not owned. That's why it makes a big difference. We will see how much repair cost of EVs will be after warranty period. 

 

Hydrogen cars are expensive. They use an electric engine as well. They are heavy as hydrogen tanks need to be heavy. Hydrogen is expensive to produce and hard to store and transport.

[bendejo]

9 hours ago, Purdey said:

Seems like he is not backing America. Ironic.

He knows the most important thing in this world is himself: his wealth and his ego.  He has a near-infinite array of words to make it look like he cares about other things, but don't be fooled.  E.g.:

Warns of Chinese Electric Car Brands' Potential to "Demolish" Rivals

in this phrase rivals means "me."

 

[JBChiangRai]

8 hours ago, The Theory said:

EV will be replaced by hydrogen powered vehicles. Hydrogen is greener than electric. But as usual auto industry need to make $ as much as possible by EVs before next generation. EV life span is noting near diesel, but buyers idea is saving on fuel cost. In the US EVs are pretty much all "leased", not owned. That's why it makes a big difference. We will see how much repair cost of EVs will be after warranty period. 

 

7 hours ago, ozimoron said:

 

Hydrogen cars are expensive. They use an electric engine as well. They are heavy as hydrogen tanks need to be heavy. Hydrogen is expensive to produce and hard to store and transport.

 

There is a place for Hydrogen powered vehicles, but alongside BEV's, not instead of.

 

The reasons are simple, but the biggest one is cost.  Green Hydrogen is obtained by using renewables (typically solar) to make Electricity. At this point you can put it into your BEV and get an efficiency level of (let's call it) 1.  For Hydrogen production you then have to electrolyse water to get your Hydrogen, you then have to compress it using some of your electricity, transfer it to tankers, send those tankers to Hydrogen fuel stations (using some of your Hydrogen to run the tanker), transfer it into the fuel stations tanks, then later pump it into vars using more electricity.

 

Your car can either use the hydrogen like a CNG or LPG car would, giving you an efficiency level of about 0.15 (6 times more expensive than a BEV) or the car can have a fuel cell giving you an efficiency level of about 0.2 (5 times more expensive than a BEV).

 

So it will come down to consumer choice, do you want a BEV which is 5 times cheaper per kilometer than a Hydrogen powered car? or do you want the Hydrogen car?

 

Now let's look at fuel tax.  I can't see how a government can charge more tax on the electricity for a BEV, but they may want to tax Hydrogen, increasing the cost of running a Hydrogen car even further.

 

Market dynamics will take care of the rest.  Obviously the consumer will want the car that's cheaper to run, the BEV.  So to sell Hydrogen cars they will have to be cheaper.

 

Hydrogen powered vehicles are likely to be buses, large trucks and the like.

 

There is no way Hydrogen powered cars are going to be preferred by the consumer.

[JonnyF]

I'd be more concerned about the battery fires "demolishing" parking lots, shopping malls, charging stations etc.

 

Not to mention the roads being smashed by the weight.

 

Oh, and the natural environment being destroyed by the lithium and cobalt mines. 

 

Not to mention the child labour used in said mines. 

 

The battery disposal could be interesting in certain countries that are not too concerned about the environment as well.

 

Apart from that they're sure to save the planet. Which is obviously Musk's main motivation. 

[impulse]

14 hours ago, spidermike007 said:

I'm not an expert so I don't know all the reasons for the drop in sales,

 

As I read it, sales didn't drop.  They only went up 38% year on year instead of the predicted 50%.  Musk's problem there is that the stock price and capital investment plans have the growth baked in.  Then it didn't meet expectations.  Still, GM, Ford and other legacy automaker CEOs would kill their Moms for 38% YoY growth.

 

[JBChiangRai]

40 minutes ago, impulse said:

 

As I read it, sales didn't drop.  They only went up 38% year on year instead of the predicted 50%.  Musk's problem there is that the stock price and capital investment plans have the growth baked in.  Then it didn't meet expectations.  Still, GM, Ford and other legacy automaker CEOs would kill their Moms for 38% YoY growth.

 

 

In some countries Tesla's sales actually dropped 2023 compared to 2022, Germany, UK and China IIRC

[ozimoron]

48 minutes ago, impulse said:

 

As I read it, sales didn't drop.  They only went up 38% year on year instead of the predicted 50%.  Musk's problem there is that the stock price and capital investment plans have the growth baked in.  Then it didn't meet expectations.  Still, GM, Ford and other legacy automaker CEOs would kill their Moms for 38% YoY growth.

 

 

The reason sales didn't drop more was because Tesla was forced to make fairly dramatic price cuts several times during the year to meet the competition. Trump has since warned of reduced production for the coming year. The drop in the TSLA stock in the face of peers rising to new all time highs is far more than any baked in price. The investor euphoria behind TSLA was unfounded.

 

 

Edited January 27 by ozimoron

[impulse]

3 minutes ago, JBChiangRai said:

In some countries Tesla's sales actually dropped 2023 compared to 2022, Germany, UK and China IIRC

 

I wonder how they did compared to their competition in those countries?  German and UK economies aren't so hot right now.

 

Also, in the USA, the ICE fans have been forecasting market saturation, where everyone who wants an EV has already bought one.  I don't know that I agree with them, or that milestone has been reached, but it could explain why so many EVs are sitting in dealer lots in the USA for a loooong time.

 

[ozimoron]

Electric cars will soon become a cheap commodity item instead of the second largest purchase most people will ever make.

 

Competition heats up

Companies wanting a slice of China’s fast-growing electric car market have flooded the space with new models. Chinese smartphone maker Xiaomi

last week detailed its plans to launch an EV to compete with Porsche

and Tesla.

Li Auto

, whose monthly deliveries have surged to record highs, is set to launch its first purely battery-powered vehicle, MEGA, on March 1 and begin deliveries later that month, according to an announcement Sunday.

 

https://www.cnbc.com/2024/01/02/byd-produced-more-than-3-million-cars-in-2023-set-to-beat-tesla.html

[impulse]

26 minutes ago, ozimoron said:

The investor euphoria behind TSLA was unfounded.

 

On that, we agree,  But I always got the sense that cars weren't the big play.  I was intrigued when they announced an insurance product (because who knows better how to forecast payouts?)  And I hope it doesn't happen, but I can foresee the day you'll be looking down at your navigation display and it will be pointing you to that restaurant or theme park you're approaching.  Not to mention selling your driving data to advertisers.  Where you go, how often, where you stop for breaks, where you spend your dinnertime on the town...  Then there's subscription services for basic and advanced features on your navigation display.

 

There's a whole Orwellian market to tap related to cars.  Just like they're making $$ billions on computers and smartphones.  And the money's not coming from the consumer.  We're just the product.