Tesla has taken a significant lead in the race for electric vehicles.
But the other car manufacturers around the world have not given up on closing the gap separating them from Elon Musk’s company.
They thus announced billions of dollars of investments in order to develop electric vehicles. Each of these automakers just targets Tesla. Legacy carmakers like GM (GM) – Get Free Report, Ford (F) – Get Free Report, Volkswagen (VWAGY) – Get Free Report, Porsche (POAHY) , Mercedes-Benz (DMLRY) , BMW (BMWYY) , Nissan (NSANY) , Honda (HMC) – Get Free Report all align their ambitions in this segment considered as the future of the automotive industry.
They all see themselves as Tesla’s main rival.
But Musk doesn’t see everyone as threatening competitors. Moreover, to show that Tesla was playing in a league of its own, the company announced on Jan. 12 a massive price drop on all its models ranging from 7% to 20%, thus challenging all its competitors to do the same. Convinced of its superiority, Tesla is aware that other car manufacturers risk putting themselves in the red if they try to respond with comparable price cuts.
But on Tesla’s fourth quarter earnings’ call on Jan. 25, Musk was asked who he thought would be Tesla’s main rival within five years.
“I’m curious how you see the current competitive landscape changing over the next few years, and who you see as your chief competitors in five years from now,” an analyst asked him.
‘They Work the Hardest’
“Five years from now, I guess long time,” the billionaire smiled. “I don’t think you could see second place with telescope.”
Then he continued: “I don’t think it’s any of the companies that we’re aware of. I’m just guessing that someone might pick it up, eventually.”
But a few minutes later he revealed that Chinese car makers might be Tesla’s biggest competition.
“We have a lot of respect for car companies in China. They are the most competitive in the world. That is our experience and the Chinese market is the most competitive. They work the hardest, and they work the smartest. We have a lot of respect for the Chinese car companies that we’re competing against.”
Elon Musk Reveals His Top Competition
As a result, “I would guess there would probably be some company out of China [which] is most likely to be second to Tesla,” he concluded without giving a name.
Chinese automakers are indeed formidable rivals to Tesla. BYD, a group backed by legendary billionaire Warren Buffett, is thus the second largest electric vehicle group in the world in terms of sales volumes. Apart from BYD, there are NIO, XPeng and Li Auto.
They took advantage of tax credits and other aid from the Chinese government to become car powerhouses.