Tesla's biggest rival is now mocking Elon Musk

Tesla's biggest rival is now mocking Elon Musk

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In the world of Tesla, there are currently three letters that are giving investors sleepless nights: BYD. This company is the competitor that is rapidly gaining market share in China, the world's largest auto market - globally, with the exception of the United States, where there are ongoing trade restrictions on Chinese imports.

Successful figures from BYD

On Monday, BYD reported revenue of $107 billion for 2024 — the first time the brand has surpassed $100 billion, surpassing Tesla's annual revenue by about $10 billion. This impressive result came just a week after BYD Charging system revealed, which is said to provide the latest electric vehicle model with a range of 250 miles after just five minutes of charging.

Rising stock prices and competitive pressure

Shares of BYD, listed on the Hong Kong stock exchange, have already gained more than 50% this year. The impressive news from China should be for Tesla's CEO Elon Musk, who once ridiculed the idea of ​​competing with BYD, all the more satisfying. Musk is currently a rather unpopular member of the Trump administration.

BYD's finest hour coincides with a crisis at Tesla. Tesla investors have been selling their shares for nine weeks in a row, mostly out good old business reasons, including:

• Die globalen Verkaufszahlen sanken im letzten Jahr zum ersten Mal überhaupt, und auch dieses Jahr sieht nicht viel besser aus.
• Wettbewerber verringern Teslas Marktanteil, besonders in China.
• Teslas Kernprodukte haben seit Jahren keine signifikanten Updates erfahren, und das lange angekündigte kostengünstige Modell steht noch aus.
• Obwohl Tesla ein Pionier bei Elektrofahrzeugen ist, hinkt das Unternehmen hinter Googles Waymo im Rennen um autonomes Fahren hinterher.

The impact of Elon Musk

But these are by no means the only reasons. Musk's involvement as a Trump confidant has transformed the Tesla brand — once a favorite among aspiring, progressive buyers — into a symbol of the American right. The prices for used Teslas sink, as interest in used electric vehicles increases.

The White House's response to these developments has been a series of actions — including a live broadcast of a presidential statement on the White House lawn, the Commerce Secretary promoting Tesla stock on Fox News, and the FBI threatening vandals with terror charges — all of which smack of desperation. (You are like that too outside the legal convention that ethics experts have difficulty understanding them.)

Stock decline and market analysis

Tesla shares began rising on Friday after Musk called a meeting with all employees where he asked them to hold onto their shares. Individual investors poured into the market, helping stocks rise 5% on Friday and 12% on Monday. Still, the price remains more than 40% below December's record high, and several analysts have cut their expectations for the year.

BYD isn't the only Chinese competitor eating into Tesla's market share. In Europe, Tesla sales fell 44% in February, while sales of Chinese brands rose 82%, according to one report from JATO, which analyzes market data.

Part of this decline is related to a delay in the renewal of Tesla's best-selling Model Y, according to JATO analyst Felipe Munoz. But Musk's support for a far-right German party that has been accused of to sympathize with Nazis, probably didn't help the improvement — sales in Germany, Europe's biggest car market, fell 75% last month.

BYD as a serious rival

Perhaps the biggest threat BYD poses to Tesla is its ability to produce a variety of stylish, technologically advanced cars — both electric vehicles and plug-in hybrids — at a fraction of the cost. BYD's entry-level model now costs less than $10,000 in China. Tesla's Model 3, the cheapest model, costs three times as much at $32,000.

On Monday, BYD launched a new electric sedan that has roughly the same specs as the Tesla Model 3, but at half the price Elektrek reported. The new Qin L EV features BYD's intelligent driving technology and offers a range of over 330 miles, starting at $16,500.

Tesla is reportedly working on a smaller, cheaper version of its Model Y to regain some ground in China. However, according to initial sources, mass production is said to be possible only start in 2026.

Conclusion: Tesla's challenges from BYD

In summary, Musk seriously underestimated BYD, which stands for "Build Your Dreams," in 2011 when he responded to a Bloomberg interviewer's question about the Chinese automaker's threat with the words "Have you seen their car yet?" rhetorically dismissed. More than a decade later, BYD has overtaken Tesla in annual sales and upended the global electric vehicle market. Tesla remains the top-selling electric vehicle maker in the U.S. thanks to tariffs aimed at protecting U.S. production. In the absence of these trade barriers, BYD could quickly become Musk's worst nightmare.