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Trang chủ » Analysts assert that Elon Musk’s visit highlights China’s significance in the global EV market.

Analysts assert that Elon Musk’s visit highlights China’s significance in the global EV market.

Elon Musk’s visit underscores China's importance to global EV market, analysts say

Elon Musk’s visit underscores China’s importance to global EV market, analysts say

Tesla CEO Elon Musk’s recent visit to Beijing has brought attention to China’s role in the global electric vehicle (EV) market. According to Anthony Sassine, senior investment strategist at Kraneshares investment manager, the visit is crucial for Musk, given that China accounts for 50% of Tesla’s vehicle sales and 20% of its production capacity. Sassine said the visit could be seen as a “political statement,” with Musk and other business leaders urging politicians on both sides of the Pacific to focus on political stability. However, competition in China’s EV market is intense, and local companies are introducing new models, which is forcing Tesla to cut prices to stay competitive.

FAQs

What is the significance of Elon Musk’s visit to Beijing?

Elon Musk’s recent visit to Beijing highlights the importance of China in the global EV market. China is responsible for 50% of Tesla’s vehicle sales and 20% of its production capacity.

What is the political significance of Musk’s visit?

According to Anthony Sassine, senior investment strategist at Kraneshares investment manager, Musk’s visit can be seen as a “political statement” regarding the need for political stability in China. The visit highlights the importance of business leaders like Musk and their role in shaping political policies.

Why is competition in China’s EV market intense?

China’s EV market is highly competitive, with Tesla competing against multiple local companies for supremacy. Chinese EV companies are introducing new models, which is forcing Tesla to cut prices to stay competitive.

Why is pricing important for Tesla in China?

Tesla must rely on pricing to maintain its competitiveness in China’s highly competitive EV market. Chinese EV maker BYD sells extended range hybrids, giving it a competitive advantage over Tesla. As such, Tesla has had to rely on pricing to compete.

Elon Musk’s visit underscores China's importance to global EV market, analysts say
Elon Musk’s visit underscores China’s importance to global EV market, analysts say

Analysts say Elon Musk’s visit emphasizes China’s significance in the global electric vehicle market.

Elon Musk’s visit to Beijing is shining a spotlight on China’s role in the global electric vehicle (EV) market, from his handshake with Chinese officials to visits to top Chinese ministries. China accounts for 50% of Tesla’s vehicle sales and 20% of its production capacity, making the country incredibly important to Musk and the company. Anthony Sassine, senior investment strategist at investment manager Kraneshares, called Musk’s visit a “very important one” for him and noted that it would help “set the story straight” by ensuring Musk and the Chinese Communist Party were on the same page. During Tesla’s earnings call in April, Musk identified US-China tensions as a potential risk.

Sassine also suggested that Musk’s visit could be a political statement to China, with business leaders like Musk and JPMorgan chief Jamie Dimon “telling politicians on both sides of the Pacific that business needs political stability”. Additionally, the macro environment for EVs in China has been tough, with the country ending subsidies on new EV purchases and interest rates rising in the US. In response, companies have had to slash prices to boost sales.

Tesla slashed prices for its EV sales in China last October and January, but raised them again in May after several rounds of price cuts across the world. Bill Russo, founder and CEO of strategy and investment advisory firm Automobility, noted that Tesla was forced to slash prices in the first place due to China’s importance to the US electric carmaker. Russo said Tesla needs the economies of scale that China provides to maintain its global cost advantage, but added that the company isn’t the only top dog in the country’s competitive market. Chinese EV maker BYD sells extended range hybrids, a tactic that Russo called “a weapon that Tesla doesn’t have” and noted that BYD outsells Tesla two-to-one in the pure battery electric business. That leaves Tesla having to rely on pricing to maintain its competitiveness, unlike other parts of the world where it doesn’t face such intense competition.

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