Tesla CEO Elon Musk on Wednesday warned that Chinese automakers will “demolish” their global competition without tariffs or other trade barriers.
His comments come after Chinese electric car company BYD, which makes cheaper cars and is backed by Berkshire-Hathaway, surpassed Tesla as the top-selling EV company last quarter.
Chinese automakers were the “most competitive” and “will have significant success outside of China, depending on what kind of tariffs or trade barriers are established,” Musk told investors on a post-earnings call 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.”
Asked about Musk’s comments, the Chinese foreign ministry said at a regular briefing on Thursday that it was unaware of the reports but advocated “maintaining a fair, just and open business environment”.
China has made an aggressive push to achieve dominance in the global EV market.
The communist nation wants to have its two biggest EV makers generate 10% of their sales overseas by 2025 but has not indicated which companies that would include — though, analysts believe BYD must be one of those two due to production and sales volume, The South China Morning Post reported.
BYD’s sales were bolstered by discounting programs in Europe aimed at increasing the EV maker’s presence in foreign markets. BYD dropped the price by about 8% on its Han-branded sedans, with a much smaller discount on its Dynasty series of pure and hybrid models.
European Commission President Ursula von der Leyen has said that the price for vehicles remained “artificially low” thanks to state subsidies.
Tesla slashed prices for its EV models last year as Musk has sought to make his cars more affordable for customers who face steep loan costs. But the company’s margins have suffered and investors have voiced concerns. On Wednesday, Musk admitted that Tesla was reaching “the natural limit of cost down” with its existing products.