This warning comes against the backdrop of Tesla confronting price competition and high borrowing costs, which have squeezed its financial margins over the past year. Furthermore, he noted that Tesla is reaching "the natural limit of cost down" with its current vehicle lineup.
BYD, a Warren Buffett-backed Chinese automaker, recently achieved a significant milestone by surpassing Tesla as the world's top-selling EV company in the last quarter. The success of Chinese EV firms has been attributed to their competitiveness and growing international presence—developments heavily influenced by existing tariffs and trade barriers.
Musk also confirmed on the day following a Reuters report that Texas will be manufacturing Tesla's next-generation EVs by the second half of 2025. The new model, codenamed "Redwood," is reported to be a less expensive, mass-market compact crossover aimed at broadening Tesla's customer base.
In response to Elon Musk’s comments during the post-earnings call, China’s foreign ministry expressed advocacy for a "fair, just, and open business environment" in their regular briefing on Thursday. This position aligns with the concerns raised by Musk regarding equitable conditions for competition among EV manufacturers.
Thus far through 2023, Tesla has enacted multiple price cuts in an effort to maintain its status as a leader in the U.S. electric vehicle market and fend off mounting competition from other automakers. With BYD's notable triumph and increasing pressure from other companies within what many consider to be an already aggressive industry, Tesla's strategy now includes bringing its awaited "Redwood" model into production at its Texas facility by mid-2025—a move eyed cautiously within industry circles given current market dynamics.
Source: Reuters
