Tesla and its hyper-active boss Elon Musk are having a bad month. On both sides of the Altantic, there have been protests against the ‘Nazi-mobile’ and the ‘Swasti-car’. The electric vehicle (EV) manufacturer’s sales are collapsing across Europe, and its stock is in freefall. On top of all that, its main rival, China’s BYD, has just announced a super-faster charger that allows you to ‘fill up’ your EV as quickly as you once could your petrol car. All companies go through bad patches, especially when they are leading a new industry. But Tesla is losing its technological lead to China. That could prove fatal.
There is growing evidence that China’s EVs are not just cheaper, but better as well
If it works as it says it does, BYD’s rapid charging system could transform the EV industry. Its ‘super-e platform’ takes five minutes to charge a car enough to cover 260 miles, and will be rolled out across China later this year. That is double the speed of the fastest Tesla charger on the market right now. Given that range anxiety is one of the main factors that has held back the EV market, this is a hugely significant announcement. An EV that you can charge that quickly is clearly a lot better than one where you have to get a coffee while it is plugged in – especially for long journeys where it will need a top up along the way.
There is growing evidence that China’s EVs are not just cheaper, but better as well. It is not just BYD. The smart phone manufacturer Xiaomi said this week that it was expanding production of its sporty EVs that are designed to integrate perfectly with your smartphone to provide a seamless driving and media experience. The upstart EV maker XPeng also announced that its output would rise by 300 per cent this year as it started to roll out production.
Against that backdrop, it is no great surprise that Tesla’s shares have been hammered. Its stocks are now down 53 per cent from their peak following November’s US presidential election and they have fallen by another 8 per cent over the last five days. Even President Trump’s high-profile support for the company, buying a new Tesla with his own money, did nothing to help the shares. It may well have made the crisis even worse, given that its affluent, eco-conscious customers loathe Trump.
The real problem for Tesla, however, is not Elon Musk’s libertarian, right-wing politics. Political controversies blow over. It is that it is losing its technological edge to its Chinese rivals. Tesla dominated the EV industry because it was the first manufacturer to produce slick, fast, and brilliantly designed cars that ran on batteries that were better than anything else on the market. That is increasingly no longer true. BYD’s five-minute charger is emblematic of how it is losing its lead – and if that continues, Tesla’s decline will soon be permanent.
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