Musk Fears Without Tariffs; Chinese EV Makers Will Demolish Competitors

(RTTNews) - Tesla (TSLA) CEO Elon Musk cautioned that Chinese automakers could potentially outperform their global counterparts and "demolish" competitors if there are no tariffs or trade barriers in place.

He stated that Chinese automakers are highly competitive and could achieve significant success beyond China, depending on the existence of trade barriers.

Musk acknowledged that Tesla was approaching the "natural limit of cost reduction" with its current products. 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.

This sentiment comes after Chinese electric car company BYD surpassed Tesla as the top-selling electric vehicle company last quarter. In response to Musk's comments, the Chinese foreign ministry emphasized the importance of maintaining a 'fair, just, and open business environment.'

Meanwhile, the European Commission is contemplating the implementation of new higher tariffs on Chinese electric vehicle imports to protect EU manufacturers, as it has expanded sales to various markets including Europe, the Middle East, and Southeast Asia. Reports state that China has been striving to achieve dominance in the global electric vehicle market and aims for its two largest electric vehicle makers to generate 10% of their sales overseas by 2025.