The company noted during the call:
“China is a critical market for Tesla, not just because it is the home of the company’s biggest plant, but also because it is the second-largest market for the automaker, accounting for roughly two-thirds of the global electric-vehicle sales in 2022,”
The country is also a hub of competition, with numerous players, including Xpeng, Nio, and BYD Co., vying for supremacy in terms of style and price.
During the call, Elon Musk touched upon Tesla’s competition in China, stating that it is the “most competitive market in the world.” He spoke highly of Chinese automakers, acknowledging their hard work and intelligence. He added, “We believe there is probably some company out of China as the most likely to be second to Tesla,” though he did not mention any specific name.
In a recent move, Tesla promoted its China chief, Tom Zhu, to run its factories and sales operations in North America and Europe. Musk expressed his confidence in the company’s team in China, stating that they have been winning in the region and attracting the best talent. He also expressed hope that this trend will continue.
To boost demand and reduce costs, Tesla has recently cut prices in response to growing competition and slowing demand in China, followed by cuts in other markets such as the United States. This move is part of the company’s larger strategy to grow through what Musk sees as a potential recession in the coming year.
Musk has a history of praising Chinese workers and competitors. In 2021, he referred to Chinese automakers as “the most competitive in the world” and acknowledged their skills in software development. He also acknowledged the hard work of Chinese workers during the COVID lockdowns, who kept Tesla’s factories running.
In conclusion, China remains a crucial market for Tesla, and the company is facing intense competition in the region. Despite the challenges, Tesla is confident in its team and its ability to attract the best talent in China. The recent price cuts are aimed at boosting demand and reducing costs, with a view towards future growth.