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During a telephone conversation with analysts, the CEO of Tesla and Space X made it clear that automobile companies from the Middle Kingdom are “the most competitive,” so without trade barriers, automakers from other countries have little chance. Elon Musk stated bluntly: Chinese automakers are capable of “virtually destroying” most of their competitors.

Elon Musk was generous with his compliments to Chinese automakers, calling electric cars from China “incredibly good.” And although the Tesla Model Y became the absolute bestseller of the car market in 2023, the businessman has reasons to worry. The price wars have pushed Tesla to a “natural limit to cost reduction” and squeezed profits. At the same time, the auto giant BYD came out on top in terms of electric vehicle sales.

The advantages of automakers from the Middle Kingdom are an extensive range of models, stable supply chains, and government support. Tesla plans to release an inexpensive crossover in the second half of 2025, but in terms of the pace of expansion of its product line, the American brand is far behind the Chinese.

China has excess production capacity and relatively cheap labor, so the presence of automakers from the Middle Kingdom in foreign markets will only grow. In the US, awareness of Chinese brands is very low and car sales are hampered by Trump-era restrictions, but in other countries concerns about the expansion of Chinese brands are growing, and calls for trade barriers are growing louder.

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