The billionaire sounded the alarm
Tesla CEO Elon Musk said on Wednesday that Chinese automakers will «destroy» global competitors without imposing trade barriers, highlighting that the U.S. EV market leader faces competition from companies like BYD that are looking to expand their presence around the world.
Chinese car companies were «the most competitive» and «will achieve significant success outside of China depending on what tariffs or trade barriers are put in place,— Musk said. — Unless trade barriers are put in place, they will pretty much wipe out most other car companies in the world. They are very good».
Musk sparked a price war last year, slashing Tesla's profits and worrying investors. On Wednesday, Musk warned that Tesla was reaching «a natural limit to cost cutting» in its existing line.
Tesla plans to begin production of a cheaper mass-market compact crossover, codenamed Redwood, next year to compete with other companies' low-cost crossovers. Musk confirmed that Tesla plans to begin production of its next-generation electric vehicle at its Texas plant in the second half of 2025.
But Chinese electric vehicle makers, able to control costs with a stable supply chain, are moving quickly. With increasing competition and excess capacity in China, many are now working to rapidly expand their overseas presence.
Musk said there was “no obvious opportunity to partner with Chinese competitors,” but Tesla was willing to give them access to its charging network and license other technologies, such as self-driving.