Elon Musk has said that a Chinese automaker is likely to be the closest competitor to Tesla. He has stressed that the company is "winning in China" right now.
Tesla's electric vehicle dominance in China is being challenged by a number of start-ups, including Nio, Xpeng and Li Auto. These companies are making inroads in the Chinese market with their innovative products and competitive pricing. Tesla will need to continue to innovate and offer compelling products if it wants to maintain its market share in China.
Tesla's biggest rival in China right now is Warren Buffett-backed automaker BYD. According to sales figures from last year, BYD sold 911,140 battery electric vehicles globally and a total of 1.8 million vehicles when factoring in plug-in hybrids. This means that Tesla delivered 1.31 million cars in total in 2022.
Musk was asked about the competitive landscape for electric cars on Tesla's earnings call on Wednesday. He said that the company is "fired up about the future and that it is going to be great."
Musk said on the Tesla earnings call on Wednesday that he has a lot of respect for the car companies in China. He said they are the most competitive in the world, and they work the hardest and the smartest. Musk said he respects the China car companies that Tesla is competing against.
Musk said that if he had to guess, the most likely company to be second to Tesla would be one from China.
Musk said that the “Tesla China team is winning” in the country, though he did not clarify further.
Tesla's Model 3 was the fifth best selling new energy vehicle car in China in 2022, according to the China Passenger Car Association. Cars made by BYD and SAIC-GM-Wuling sold more in 2022 than did Tesla's Model 3. However, Tesla's Model Y was the second-best selling electric sports utility vehicle in China, behind a model from BYD.
Musk's automaker faced a number of challenges in China last year, including production disruptions at its Shanghai factory because of the country's strict Covid policies and component shortages. However, the company has continued to invest in China, and its sales there have been growing.
Tesla has cut the prices of its cars in China for 2022, in response to a tough macroeconomic environment and softening consumer demand.
It's not just the Chinese automakers competing with Tesla. Traditional car giants in the U.S. and Europe are also eyeing the electric vehicle market.
Herbert Diess, CEO of German automaker Volkswagen, told CNBC in May that he believes his company can overtake Tesla to become the world’s largest seller of electric vehicles by 2025. Diess said that Volkswagen is investing heavily in electric vehicles and that he is confident the company will be able to achieve its goal.
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