Chinese Manufacturers Can Destroy Their Rivals

This is not an apocalyptic forecast but simply Elon Musk’s observation in the face of the Chinese automakers’ offensive.

Tesla has been continuously lowering its prices for over a year to boost its sales in the face of this fierce competition. As a result, the company’s deliveries in 2023 increased by 38% compared to the previous year. Although this may seem extraordinary, Elon Musk believes an average annual growth rate of 50% over several years would be needed to keep up. Evidence of this is that, despite these excellent results, Tesla for the first time lost the global electric vehicle sales lead to the Chinese car manufacturer BYD in the fourth quarter of 2023.

“the most competitive car manufacturers in the world” and “will achieve significant success outside of China.”

Musk, who once mocked Chinese electric vehicle brands, now considers them a existential threat. “Honestly, I think if there are no trade barriers in place, they will destroy most other automakers around the world,” he notably declared. If the U.S. government aligns with the European approach to impose higher tariffs on subsidized vehicles, a united front could emerge, restoring a healthier and more peaceful market environment, but this would inevitably come with a strong retaliation from China. A new Cold War in essence, thankfully purely commercial but equally dramatic.