In China, Tesla Is a Catfish, and Turns Auto Companies Into Sharks (Published 2021) (2024)

FAQs

What is going on with Tesla in China? ›

Tesla has also reached an agreement with Baidu to use the Chinese giant's mapping license for data collection on China's public roads, according to two people, who described that as a step toward FSD rollout in China. Musk's meetings included one with Chinese Premier Li Qiang, who praised Tesla's development in China.

The move is aimed at addressing weakening demand for the U.S. automaker's aged model in China, its second largest market into which a majority of the cars produced at the Shanghai plant are sold and where a brutal price war has erupted among electric vehicle makers amid an economic slowdown.

BYD — or Build Your Dreams — is probably Tesla's best-known competitor in China. The Shenzhen-based automaker kicked off a new price war by unveiling a smorgasbord of new and updated models. That includes both the dirt-cheap e2 and Seagull electric hatchbacks and the pricey Yangwang U9 electric supercar.

BYD has emerged as the dominant player in China's electric-vehicle market. It's now investing heavily and growing sales in markets worldwide. Its 2023 exports of 240,000 cars accounted for 8% of its 3 million in global sales.

China's dominance in battery production

CATL accounts for two-thirds of global battery production, and is a supplier for Tesla, as well as other major automakers such as Volkswagen AG and Toyota Motor Corp.

China: Report by environmental groups reveals pollution issues in Tesla's supply chain. In 2021, two environmental groups conducted investigation regarding Tesla's supply chain and found that a number of Tesla's suspected suppliers had severe pollution issues.

While Tesla owns the factory, it does not own the land it is built on, as is typical in China. The government granted Tesla land use rights with an initial term of 50 years.

Chinese market is the missing piece

This shift comes amid Tesla's pressing issues, such as declining quarterly revenue, a shrinking presence in China's electric vehicle market, global workforce cuts, and reports of halted new hires, particularly among Chinese college graduates.

A recent analysis of publicly-available information about Tesla's supply chain has reportedly revealed that almost 40% of the suppliers for materials used in the company's batteries are Chinese companies.

Who Are Tesla's Top 3 Competitors? Ford, GM, NIO, and Volkswagen are four of Tesla's main competitors. In 2022, the Chinese manufacturer BYD sold more than 1.85 million plug-in electric cars, more than tripling its 2021 result of 593,745.

What does BYD stand for? ›

What does BYD stand for? BYD stands for "Build Your Dreams." This name reflects the company's commitment to innovation and its vision of creating a sustainable future by developing electric vehicles, renewable energy technologies, and other innovative solutions.

The incredible rise of Chinese Tesla rival BYD, which recently revealed 2 hybrid sedans that can go 1,250 miles without stopping. The Chinese automaker BYD briefly eclipsed Tesla as the world's top seller of electric vehicles.

The final factor that lets China defeat foreign companies like Tesla is scale. China has a vast number of people and a vast amount of land, and so it can make a vast amount of whatever you need.

According to analysts, even if BYD did want to start selling its cars in the US, a combination of geopolitical challenges and weak demand would leave it facing an uphill battle.

It's a small hatchback with vague Honda Fit overtones. It will reportedly go 190 miles on a charge, and if you want more there's the Dolphin Mini Plus with 252 miles of range—and a $23,000 bottom line. According to BYD, there are no plans to sell these very affordable EVs in the US.

Tesla announced it will lay off nearly 2,700 workers at its factory in Austin a week after the company said it would cut more than 10% of its global workforce. The carmaker also said it plans to launch new, more affordable vehicles next year. That news boosted shares more than 10% in after-hours trading Wednesday.

Tesla, which had more than 140,000 workers as of December, is in the process of cutting 10% of its employees as it copes with a slump in demand for its electric vehicles.

The Tesla chief executive chose China because its market is bigger. But competition is intense even there. Cheaper cars might hold the key. Elon Musk's recent trip to China kicked up intense debates in India.

Tesla shares jumped 15% Monday following reports CEO Elon Musk's weekend trip to China brought a number of wins for the electric vehicle maker. Elon Musk reportedly won tentative approval to deploy Tesla's Full Self-Driving system in China.