Elon Musk His temporarily lost his “Mr. Tweet” cap for Wednesday’s Tesla earnings call to identify the biggest He is up against a challenger car China is the new giant

Tesla is coming off the worst year on markets. Musk, who has been the company’s CEO since 2008, had some tough questions to answer during the investor call covering the company’s performance during the fourth quarter of 2022. The company’s shares have fallen 50% over the past year after a meteoric rise in 2020 and 2021, nestling in at a two-year low in November of last year. 

The electric vehicle investor have worried about Musk He is now spreading his wealth too thin since acquiring Twitter last January, as his appearance at court this week due to his alleged misleading Tesla investors 2018 with his “funding secured” Tweeting has definitely not helped. 

Tesla shareholders were most likely pleased when Tesla reported record revenue This Wednesday Musk The company had seen the footage during the phone call. “strongest orders year-to-date than ever in our history” The first week of January was a good time to be aware that a series of price cuts worldwide had helped boost demand. 

However, when I asked about the current state of China’s electric vehicle industry, Tesla lost ground over the last year. Musk Recognized Chinese companies These are most likely to challenge Tesla’s dominance.

“We have a lot of respect for the car companies in China. They are the most competitive in the world in our experience and the Chinese market is the most competitive,” Musk said. “They work the hardest and they work the smartest and we have a lot of respect for the Chinese companies that we are competing against.”

“If I were to guess, it would probably be some company out of China as the most likely to be second to Tesla,” He concluded.

China’s growing EV industry

China’s electric vehicle market is booming. two thirds Of EV demand in 2017, Tesla was the leading player. However, Tesla’s Shanghai Gigafactory production began in 2019. 

China has a huge demand for electric vehicles; a record six million electric cars China was home to more than 25% of the new car sales in China. Chinese elektrisch car companies To meet the demand, they are increasing. Chinese Warren Buffett has backed carmaker BYD. raced past Tesla in electric car Last year, China saw record sales

Around 300 electric vehicle manufacturing plants will be available in 2021 companies China: The benefit of being based in China over a decade Investments are encouraged and subsidies provided by the Chinese Government to help grow this industry which currently includes approximately four million charging stations spread throughout the country’s provinces, one of which has three times as many charging units As the whole U.S. 

In the beginning, EV subsidies were intended to help electric vehicles reach the same price as combustion engines. However, the industry has grown and diversified in the ten years since their first implementation. Mini EVs are small and compact. Chinese Wuling company cost only over $5,000 Last year it was ranked the number one, while in 2021 it was ranked at number 2. best-selling electric car in China

Consumer subsidies were scaled back In 2021, and eventually scrapped January 1, 2019. some tax exemptions Industry analysts disagree and insist that they remain the same. forecasted This industry will The next decade will see the economy becoming more market-oriented than policy-driven.

Tesla is under threat

Musk It has been highly praised Chinese automakers in the pastThey are called the “most competitive in the world” Add that in 2021 Chinese Electric car manufacturers boast advanced software design that can be used to control their vehicles. “shape the future of the automobile industry.”

But they also represent an enormous threat to Tesla’s waning power as demand for its vehicles softens in China, which currently makes up 40% of the company’s sales. BYD, Tesla’s main competitor in China, and other Chinese manufacturers posted huge sales growth towards the end of last year, while Tesla’s numbers slumped more than 40% in December.

Tesla lowered car prices In China, twice within the last few months was the Chinese To support sales during slowing demand, the government ended its EV subsidies. In the meantime, prices have been cut by the company in the U.S. and other markets too.

Musk suggested during the earnings call that the price cuts seemed to have worked, given Tesla’s record profits last quarter, and added that the outlook for demand in the year ahead was optimistic, despite “probably a contraction in the automotive market as a whole.”

BloombergNEF analysis The forecasts for Tesla sales growth of 40% by 2023 are supported by its in-demand Model Y car It could be the fastest-selling EV globally and possibly even crack the top three of all cars. But while Tesla is still performing in some places, increasing competition from China’s domestic automakers might push that all-important market further out of reach.

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