"Severe electric vehicle (EV) price wars have already started in China. Some BYD cars cost under $23,000. And these are not tiny, urban commuter EVs. They are real sedans that carry four or five people. Tesla Inc. ( NASDAQ: TSLA) has needed to drop the price of its long-range Model 3 rear-wheel drive in the world's largest EV market. It is now priced at $37,000."
"BYD has started an assault on Europe. That will damage companies like Volkswagen. Tesla has two problems. First, Elon Musk's image in Europe has eroded. Tesla's unit sales have been dropping all year. Across the entire region, Tesla registrations are down by more than half in some months in Europe's largest countries. Second, BYD has pulled ahead of Tesla in unit sales."
"Tesla is protected by the U.S. government with tariffs of 100%. Even so, Musk's image has taken Tesla's market share below 50%. Car companies, including GM and Hyundai/Kia, have fractions of the market but continue to push several EV products into the market every year. The federal government's $7,500 EV tax credit disappears in a month. Finally, there is no guarantee that the Trump administration will hold the tariff in place."
A severe EV price war in China has led BYD to sell full-size sedans for under $23,000, prompting Tesla to cut its long-range Model 3 rear-wheel drive to $37,000. Lower-priced competitors with comparable features are pressuring Tesla's brand value and market share in China. BYD's push into Europe threatens legacy automakers such as Volkswagen while Tesla faces eroding image and falling registrations across major European markets. U.S. tariffs and the imminent expiration of a $7,500 federal EV tax credit complicate competitive dynamics. Recent declines in Tesla's automotive revenue, gross profit, and net income heighten the need to stabilize margins as AI and autonomy initiatives mature.
Read at 24/7 Wall St.
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