SAN FRANCISCO -- Tesla CEO Elon Musk said that Chinese automakers will "demolish" global rivals without trade barriers, underscoring the pressure the U.S. electric vehicle market leader faces from rivals such as BYD, who are racing to expand worldwide.
Musk's comments come after Warren Buffett-backed BYD - with its cheaper models and a more varied lineup - overtook Tesla as the world's top-selling EV company last quarter, despite the U.S. automaker's deep price cuts through 2023.
Chinese car companies were the "most competitive" and "will have significant success outside of China, depending on what kind of tariffs or trade barriers are established," Musk said on a post-earnings call with analysts on Wednesday.
"If there are no trade barriers established, they will pretty much demolish most other car companies in the world," he said. "They're extremely good."
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Still, brand awareness of Chinese car companies in the U.S. is extremely low and their reliability, durability and safety is middling, so they have a long way to go to win U.S. market share, said Spencer Imel, a partner at consumer insights firm Lansgton.
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Former President Donald Trump, who is the frontrunner for the Republican nomination for president this year, has signaled that he would double down on stronger tariffs if elected, calling for a universal 10 percent tariff on all imports into the U.S. and revoking China's most-favored-nation trading status.