The year 2023 should prove decisive for the electric car and more particularly Tesla. Elon Musk’s brand remains the industry leader for now, but its position could change in the coming months. The company is indeed heckled from all sides, but especially from China. Decryption of the situation.
Since the launch of the Model S in 2012, Tesla has been the leader in electric cars around the world. In 2022, Elon Musk’s company broke all records, whether in terms of production or sales. In France, in Europe, and even in many countries, the Model 3 or the Model Y has risen on many occasions as the best-selling electric car of the month, of the quarter, or even of the year. But the tide could turn.
Tesla in the sights of BYD
In the fourth quarter of 2022, Tesla sold 405,000 electric cars. It’s huge and it’s a record. But the world number 2 in electric cars, the Chinese giant BYD, is coming very, very strong. The company has sold over 329,000 electric cars. But the progression is enormous: it was only 143,223 units in the first quarter of 2022, when Tesla was already selling 305,407. And if we take into account plug-in hybrids, BYD sold more than 680,000 cars in the last quarter of the year.
| Sales | You’re here | BYD | volkswagen |
|---|---|---|---|
| First quarter 2022 | 305 407 | 143 223 | 99 100 |
| Second quarter 2022 | 254,695 | 180 296 | 118,000 |
| Third quarter 2022 | 343,000 | 258,618 | 149,300 |
| Fourth quarter 2022 | 405,000 | 329,000 | – |
| Total 2022 | 1,308,102 | 911 137 | – |
In detail, in December, BYD sold 235,197 electric cars (mostly in China). Tesla does not give a monthly figure, but it is known that the Shanghai plant saw 55,796 cars roll off its production lines in December 2022, compared to 100,291 cars the previous month and 71,704 units in October.
A demand problem?
This is one of the reasons many industry experts believe Tesla has a demand problem in China. That’s why we’ve seen plenty of price cuts and giveaways from Tesla. The latest is this week, with a historic price drop in China. The Tesla Model Y and Model 3 have never cost so cheap there.
However, the problem also seems to be moving abroad, since Tesla has also made a few gifts to Europeans and Americans in recent weeks. But Elon Musk’s firm denies any demand problem. In China, Tesla explained that this price drop was made possible by production line optimizations. This would also explain the drastic drop in production in December, which would have made it possible to reorganize the factory.
We will therefore have to wait a few more months to find out if Tesla really has a demand problem or not. But the American brand should not rest on its laurels. In China, upon its arrival, the American manufacturer was seen as an innovative and revolutionary brand. This is much less the case now, with many local manufacturers offering even more innovative electric cars.
1,000 km range and charge in 5 minutes
We can cite the Zeekr 001, from the Geely group, which is the first electric car to integrate CATL’s new battery, the Qilin CTP 3.0. His particuliarity ? Offer a range of 1,000 km on the Chinese CLTC cycle, thanks to its exceptional capacity of 140 kWh (but high consumption). We suspect that Tesla could have done it, with its 4680 batteries (which are late) and the Tesla Model S Plaid+, which has been canceled. The reason: nobody needs a car with more than 600 km of autonomy according to Elon Musk. And the man is not wrong, as long as the car recharges quickly.
And precisely, on the question of fast charging, Elon Musk had shown in 2013, a Tesla Model S capable of “charging” in 3 minutes, thanks to the battery exchange. It was then faster than a full tank of gas! But the brand has since abandoned the idea… which has been taken up by Chinese manufacturers. And this is no longer an idea, but a reality, in China and also in Europe which already has 10 battery exchange stations, thanks to Nio. We were also able to try the function, which is stunning and fast.
Beyond the battery swap, while the v3 Superchargers can reach a peak power of 250 kW, it is rumored that the v4 Superchargers could reach 350 kW. But this figure pales in comparison to Geely’s 600 kW or Nio’s 500 kW. Enough to charge an electric car from 10 to 80% in just 10 minutes. Provided you have an 800-volt architecture, which Tesla’s electric cars do not have. Except the Tesla Semi, but this is an admittedly revolutionary electric truck.
BYD’s European offensive
Unfortunately for Tesla, the Asian competition is not limited to these technological demonstrations. In France, the Chinese giant BYD took advantage of the Mondial de l’Auto in its 2022 edition to arrive in the country with three electric cars: the BYD Atto 3, BYD Han and BYD Tang. These cars are a bit disappointing in terms of technical specifications if we compare them to Teslas. But their aggressive price positioning could well hurt other manufacturers in the long term.
A few days ago, BYD launched its new premium brand, YangWang. On the program: luxurious cars, containing all the best in terms of technology. We are entitled to an electric supercar, the YangWang U9, but above all an electric 4×4 competing with the Tesla Cybertruck, Land Rover Defender and Mercedes EQG: the YangWang U8, with more than 1,000 horsepower and advanced technologies.
Remember when Elon Musk announced a few months ago that the Cybertruck could be used as a boat on bodies of water? Well, BYD pulls the rug out from under Tesla’s feet with an impressive demonstration: its YangWang which ventures into a deep lake, while being able to regain solid ground by floating, aided by its four motors.
Autonomous driving: Tesla’s secret weapon?
On the autonomous driving side, Tesla currently remains the undisputed market leader, even if it is being caught up little by little, in particular by Mercedes, which was the first manufacturer to offer a car with level 3 autonomous driving, thanks to its 100% electric EQS.
But Chinese manufacturers do not intend to be left behind. Zeekr proved it again recently thanks to its partnership with Mobileye (Intel) and Waymo (Google). But this is also the case of the manufacturer Xpeng, whose cars are marketed in Norway, which is working on autonomous driving similar to Tesla’s FSD (Full Self-Driving).
And precisely, for the moment, Tesla’s FSD autonomous driving is only available in the United States. Other countries must make do with Autopilot, which is level 2 driving reserved for expressways and highways. Where FSD is a feature that can be activated everywhere, including in complex city centers.
2023: a decisive year for Tesla
Tesla is equipped with the weapons that can enable it to maintain its leadership: highly accomplished autonomous driving, cars with record efficiency and the most developed charging network (Superchargers) in the world. But its future hangs by a thread, since the Chinese threat is real and not just localized. The Chinese manufacturers have the will to invade the European market, but also American in the long term.
To thwart this offensive, Tesla must strike hard, and not just with price cuts. The American manufacturer must regain its level of innovation of yesteryear, and catch up on certain elements, such as ultra-fast charging (and this will notably involve the 800-volt architecture) and even more affordable cars.
Precisely, the firm of Elon Musk will announce certain details on the brand’s third electric platform in March 2023. It is rumored that this will form the basis of the future Model 2 and the autonomous robotaxi. Many imagine that Tesla’s compact electric car might look like Foxcon’s Foxtron Model B.
2023 could also become the year when Tesla becomes the first manufacturer to place an electric car on the podium of the best-selling cars of the year worldwide, all engines combined. Better, the Tesla Model Y could simply become the best-selling car of the year, overtaking the Toyota Corolla which currently holds the title.
Elon Musk’s firm is capable of this, since if its factories are running at full speed, 2.5 million electric cars could be produced each year. Compared to the 3 million electrified cars (rechargeable hybrids and electric) that BYD can produce each year.
What if Tesla deploys FSD in China to return to being the country’s innovation leader? This could precisely allow it to overshadow local competition. Hoping that the COVID, which goes back to China, does not hinder the plans of the firm of Elon Musk. Just like his antics on Twitter. The year 2023 therefore promises to be decisive for Tesla and Elon Musk.
Everything seemed to smile at Elon Musk until the takeover of Twitter which turned into an infernal spiral. But all has not always been rosy for the billionaire.
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