Given that Tesla’s share price has increased since the start of the time, the stock price has increased on little covering and the return of unwavering optimism.
However, the Beijing International Automotive Exhibition should serve as a reminder that rivals in growing numbers have surpassed the electric vehicle ( EV ) pioneer and are increasingly making it appear like an ordinary car company.
The exhibition, which runs from April 25 to May 5, will feature about 1,500 manufacturers of new energy vehicles ( NEVs ) and components. NEVs include hydrogen gas cell-powered vehicles, electric motors and internal combustion engine variants, and battery-powered electric cars.
According to the event’s organizers, there are 278 NEVs on screen, including 117 fresh ones. 30 of the new models come from foreign businesses, which goes against the animosity shown by American politicians toward China.
Foreign vendors include major NEV companies BYD, Geely and Changan, power EV specialists GAC Aion, Li Auto, Nio and Xpeng, and Xiaomi, a cell phone manufacturer and technology firm that has started selling attached cars.
Huawei and Horizon Robotics, a Chinese company that ranks second only to Nvidia in autonomous driving processing systems, are aspect manufacturers.
European vendors include VW Group models Audi, Porsche and Volkswagen, BMW and Mercedes- Benz, Hyundai and its affiliates Kia, Ford and Japan’s leading three manufacturers, Toyota, Nissan and Honda.
Tesla is not there.
Toyota and Tencent made the announcement on April 25 that they would work together to create energy cars for domestic consumption in China. Tencent, which has experience in cloud computing, information processing and high- size online services, has turned to autonomous driving ( which it refers to as AD ) as a new development industry.
Google Intelligent Mobility Vice President Shuman Liu notes that,” With its intricate road systems, megacities, deep populations and exclusive traffic behaviors, China … provides richer scenarios, abundant data and greater numbers of unusual and unexpected so- called  ,’corner cases ‘ essential for the safe and effective evolution of AD technology”. Engineer-talk for a problem outside of the bounds of the core case.
Add to that a distinctive Gen-Z segment that wants to buy a car with Level2 driver assistance functions, and you have ideal training conditions for AD, he says. Toyota will almost certainly use the information it learned in China to expand internationally. Additionally, it is reported that Tencent is working with Audi and Mercedes-Benz.
Nissan, Toyota’s trailblazing rival, and Baidu, a Chinese internet service provider, have signed an MOU to look into working together on self-driving electric vehicles. Nissan has also revealed two new plug-in hybrids and two battery-electric vehicles that it and its Chinese manufacturing partner Dongfeng Motor have developed.
The Volkswagen Group has announced four world premieres in Beijing: the Volkswagen ID, the Porsche Taycan 4, the e-tron, the Lamborghini Urus SE, and the Audi Q6 L . Code, a concept car designed exclusively for China. Volkswagen, which first entered the Chinese market 40 years ago, intends to invest 2.5 billion euros in its production and R&, D center in Hefei to support joint development of electric vehicles ( EVs ) with Xpeng and the release of 30 new electric vehicles by 2030.
Volkswagen now has 39 plants, more than 90, 000 employees and an almost entirely domestic supply chain in China that includes Horizon Robotics. Its goal is to remain the top foreign car manufacturer in China and one of the top three in the country, where it is currently ranked second only to BYD in sales of all kinds of vehicles. To do that, it must rapidly expand its sales of NEVs.
Meanwhile, Tesla has dropped to third place in the NEV retail sales ranking in China. Data from the China Passenger Car Association ( CPCA ) shows BYD selling 586, 000 units in the first quarter of 2024, Geely 137, 000, Tesla 132, 000 and Changan 126, 000. BYD sold hybrid vehicles in the fourth quarter of 2023, which makes that comparison less relevant. However, BYD also sells battery-powered EVs.
Tesla’s NEV unit sales were down 3.6 % year- on- year while BYD’s were up 15.2 %. Geely’s were up 2.4 times, Changan’s up 2.1 times and SAIC- GM- Wuling’s up 35.2 %. The second tier of Chinese EV manufacturers, with the exception of GAC Aion, also experienced significant unit sales growth.
Tesla’s production and sales in China have dropped for two straight quarters, according to CPCA data. Tesla’s NEV market share in China, which was 7.5 % in the three months to March, no longer supports its standing as an industry leader.
Tesla’s first- quarter financial results were as bad as preliminary reports had indicated, with sales down 9 % year- on- year and net profit down 55 %. The company’s operating margin declined from 11.4 % to 5.5 %. Operating activities ‘ cash flow decreased by 90 %, and free cash flow decreased.
The main causes of this were the unit shipments’ and the average selling price’s decline. The recall of every Cybertruck shipped since November 2017 to fix a sticky accelerator pedal and the resignation of two senior executives have only added to these issues.
Elon Musk, the CEO of Tesla, is handling the situation by firing more than 10 % of the company’s workforce and conducting a thorough review of operations in order to reduce other costs and increase efficiency. ” This”, he said,” will enable us to be lean, innovative and hungry for the next growth phase cycle”.
That may be true, but the Seagull EV, the basic model from BYD’s mass market, is not. Musk intends to expedite the development of more reasonably priced vehicles, but Tesla’s concept of a low EV price is said to be around$ 25, 000.
Fortunately for Tesla, the US will almost certainly not permit entry of ultra-cheap Chinese electric vehicles into its market. The EU has already slashed import subsidies for electric vehicles ( EVs ) and may have to raise tariffs to prevent them. Although Tesla’s factory in Germany is subject to potential European tariff barriers, it may also participate in the job cuts.
Tesla’s earnings call in January revealed that” the Chinese car companies are the most competitive car companies in the world.” Musk stated to investors and other parties. ” Frankly, I think, if there are not trade barriers established, they will pretty much demolish most other companies in the world”.
Last November, he said,” There’s a lot of people out there who think that the top 10 car companies are going to be Tesla followed by nine Chinese car companies. I think they might not be wrong”. He appears to have been overly optimistic about Tesla’s future rankings at the time.
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