Elon Musk told CNBC in an interview that he doesn’t “follow BYD”.
Tesla Inc’s billionaire CEO (NASDAQ: TSLA), also stated that he does not think of competitors.
He is focused solely on creating the best TSLA possible.
Musk may be committed to innovation with the comment above, but ignoring his rivals, especially BYD could turn out to be a mistake.
Here’s why.
BYD dominates the market
BYD is the largest electric vehicle seller in the world, surpassing Tesla Inc. – even though it does not sell vehicles on the second biggest auto market – the US.
BYD, a multinational based in Austin, Texas that was previously the leader in electric vehicles, has been rapidly expanding, with assembly lines already in place in Brazil, Hungary Thailand and Uzbekistan.
Elon Musk acknowledged that BYD, without any trade barriers in place, could “demolish the majority of other auto companies.”
If Tesla does not keep track of BYD’s movements, it may end up losing out in important markets.
BYD’s Cost Advantage
BYD’s ability to manufacture EVs for significantly less money is a serious threat to Tesla Inc.
Experts are convinced now that BYD is the only company who can compete with BYD’s price.
Tesla’s strategy of premium pricing works well in certain markets. However, affordability is the key factor that drives mass adoption.
If the US behemoth in electric vehicles doesn’t analyze BYD’s cost-saving strategies it could struggle to compete with other regions that are price sensitive.
Elon Musk has said that China is the “most competitive” auto market.
BYD’s technology advancements
BYD is now known as a global leader in the production of affordable electric vehicles. Its innovations are sometimes light-years ahead of those from its competitors.
If he ignores BYD’s technological advancements, TSLA could be blindsided by innovative ideas that can redefine the market.
BYD offers multiple levels of autonomous driving on their vehicles at a fraction the price of Tesla. Its latest charging technology is claimed to be able to charge an EV within 5 minutes versus 15 for TSLA.
Analysts are losing confidence in Tesla, as the current consensus rating is “hold.” The average price target indicates a potential decline of almost 20%.
China is the EV leader
BYD is a strong government-backed company in China, the largest EV market on earth.
BYD has received state subsidies totaling $4.3 billion between 2015 and 2020.
Tesla should be aware of how BYD uses this advantage in order to grow globally.
Musk said in an interview with CNBC today that ignoring BYD, or failing to follow it, was not an option.
Tesla Inc. must be competitive, so the billionaire needs to keep track of its pricing strategies and innovations.
The post Elon Musk: “I don’t Follow BYD” — But the Chinese EV Giant is Hard to Ignore may be updated as new developments unfold.
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