EV manufacturers slash prices to keep up with Tesla
Yahoo Finance’s Pras Subramanian joins the Live show to discuss how EV manufacturers are reacting to Tesla’s recent price cuts.
RACHELLE AKUFFO: Right, well, EV manufacturers are feeling the fallout from a Tesla-driven price war. China's BYD erased $18 billion in value the past month. So Pras, what does that mean for BYD's outlook.
PRAS SUBRAMANIAN: Well, I guess it's more of a China story when you talk about BYD and not so much a Tesla story. There's a lot of competition there in the lower end, the cheap EV, hybrid space that BYD operates in. And BYD had a good year-- a good-- end of good February last month. Their sales were up 87% year over year.
So they're doing well. It's just the fact that their stock price has been getting hit. A lot of it is peculiarities of the Chinese stock market. Not exactly in the best spot right now-- you also talk about Buffett-- Warren Buffett, that is, unloading shares of BYD in the last few months. That's sort of not helping the matters there.
So BYD sort of feeling a little bit of a pinch there in the stock price. But from an operations point of view, they're still selling a lot of cars. They may have had to discount some of them to kind of compete. But if you look at it from a point of view of competition, Tesla, in China at least, operates it at much higher-end, almost luxury market. So they're sort of operating there. They're cutting prices there to deal with NIO and other brands like that. Whereas BYD is still growing share but at a cheaper-- hybrid cars, smaller EV sort of market there for them.
RACHELLE AKUFFO: So Pras, do you think it will make it difficult if Tesla does decide to come out with a much cheaper model then to compete with the BYDs of the world?
PRAS SUBRAMANIAN: Well, I think that's going to be-- that's going to happen, right? I think we're going to see that happen with the sub-$25,000 car that may come-- I mean, it may come to the US-- I think not at sub-25 but around 25 to 30-- maybe even cheaper in China with smaller batteries. I think that's the goal for Tesla is to keep growing their sort of footprint, and not at the expense of the higher-end vehicles.
They want to grow that lower end, where they can actually-- maybe they will be taking it to BYD. But in China, you have more-- kind of a more mature market there for the cheaper, smaller cars. We don't have that in the US here for cars of like 100-150-mile, around, range. It's not really a thing we do here. But in China, it's a big deal. So I think that BYD might be looking over their shoulder, thinking of maybe Tesla'll be coming in a few years.
RACHELLE AKUFFO: Certainly one to watch indeed. Pras Subramanian, thanks so much.