Elon Musk stated {that a} Chinese language automaker is more likely to be the closest competitor to Tesla, whereas stressing the corporate is “profitable in China” proper now.

Tesla has quite a lot of challengers in China within the electrical car area, together with a slew of start-ups similar to Nio, Xpeng and Li Auto.

Tesla’s greatest rival in China proper now could be Warren Buffett-backed automaker BYD. Final yr, BYD offered 911,140 battery electrical autos globally and a complete of 1.8 million autos, when factoring in plug-in hybrids. Tesla delivered 1.31 million vehicles in whole in 2022.

Musk answered a query concerning the aggressive panorama for electrical vehicles on Tesla’s earnings name on Wednesday, saying the corporate is “fired up concerning the future and, effectively, it’ll be nice.”

“We now have plenty of respect for the automotive corporations in China. They’re probably the most aggressive on the planet … they work the toughest they usually work the neatest … so a number of respect for the China automotive corporations that we’re competing in opposition to,” Musk stated on the Tesla earnings name on Wednesday.

“And so, if I had been to guess … most likely some firm out of China is the more than likely to be second to Tesla,” Musk stated.

Musk stated that the “Tesla China staff is profitable” within the nation with out clarifying additional.

Tesla’s Mannequin 3 was the fifth finest promoting new power car automotive in China in 2022, based on the China Passenger Automobile Affiliation. Automobiles made by BYD and SAIC-GM-Wuling offered extra in 2022 than did Tesla’s Mannequin 3. Tesla’s Mannequin Y was the second-best promoting electrical sports activities utility car in China, behind a mannequin from BYD.

Musk’s automaker confronted quite a lot of challenges in China final yr, together with manufacturing disruptions at its Shanghai manufacturing facility due to the nation’s strict Covid insurance policies and element shortages.

Tesla additionally minimize the costs of its vehicles in China in 2022, amid a tricky macroeconomic surroundings and softening shopper demand.

It is not simply the Chinese language automakers competing with Tesla. Conventional automotive giants within the U.S. and Europe additionally desire a slice of the electrical car pie.

Herbert Diess, the previous CEO of German automaker Volkswagen, informed CNBC in Could that he believes his firm can overtake Tesla to develop into the world’s largest vendor of electrical autos by 2025.