While much of the world remains a bit hesitant to fully commit to electric vehicles, that hasn’t been the case in China, which has long sought to replace ICE models with EVs. Flush with government funding, a number of EV automakers have emerged in China over the past several years as a result, which – coupled with the fact that most raw materials used in EV battery construction come from that same country – has more than one automotive executive worried about the future. Ford CEO Jim Farley previously said that Chinese EV makers are the company’s biggest rivals now – sentiments echoed by chairman Bill Ford – and he also believes that they’ll soon be sold in the U.S., though the current administration is mulling an increase in tariffs to level the playing field. Now, Tesla CEO Elon Musk has also expressed his own concerns about the burgeoning Chinese EV scene, according to Reuters.
“If there are no trade barriers established, they will pretty much demolish most other car companies in the world,” Musk said on a post-earnings call with analysts this week. “They’re extremely good.” Musk also noted that Chinese automakers are the “most competitive” and “will have significant success outside of China, depending on what kind of tariffs or trade barriers are established.”
Musk is already well aware of the threat posed by Chinese EVs after BYD overtook Tesla as the best-selling EV maker on earth in Q4 2023, and that same company is working to expand its global reach by entering other markets right now. This occurred even in spite of deep price cuts that Tesla rolled out in China last year.
After years of state-issued subsidies helped Chinese EV automakers grow their business domestically, it seems as if they’re now looking to take the competition to a world stage, and given that country’s stronghold on the supply chain, analysts seem to agree with both Farley and Musk on this topic. “The completeness and resilience of China’s multi-decade state-directed battery materials processing infrastructure build out is biting hard,” said Ross Gregory, a partner at Melbourne-based consultant New Electric Partners.