Tesla CEO Elon Musk says protectionism is the only thing stopping China’s cheap EVs from demolishing the competition

Competition from Chinese EV automakers may be starting to get to Elon Musk and Tesla. After a long battle for market share in China, Tesla's CEO issued a warning to his fellow automakers: That, on a level playing field, Chinese carmakers will outcompete almost everyone else.

"Our observation is generally that Chinese car companies are the most competitive car companies in the world," Musk said Wednesday, during Tesla's earnings call. "If there are no trade barriers established, they will pretty much demolish most other car companies in the world," he continued.

Musk's tune on Chinese EVs has changed significantly since 2011, when he downplayed the quality of cars made from companies like BYD. Last May, he acknowledged that BYD's cars were "highly competitive." Then, in November, he suggested that the world's top ten automakers could end up being Tesla and nine Chinese carmakers.

Tesla, an early mover in the industry, faces intense competition from BYD. The Chinese EV maker took Tesla’s crown as the world’s top-selling EV brand in the final quarter of 2023. BYD sold 526,409 pure electric vehicles in the October-December period last year, about 40,000 more than Tesla over the same period.

Beijing lavished manufacturing subsidies on the Chinese EV sector in a bid to develop a globally-competitive industry. That government support is now attracting scrutiny from lawmakers in the West.

Last September, the European Commission launched an anti-subsidy probe into Chinese EV brands. A few months later, the Biden administration barred vehicles that used Chinese-made batter parts from being eligible for consumer tax credits. (Tesla sources some of its parts from CATL, a Chinese battery manufacturer).

Ref:  Tesla CEO Elon Musk says protectionism is the only thing stopping China’s cheap EVs from demolishing the competition (finance)

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