Western carmakers, including U.S. giant Tesla (TSLA) have given in to Chinese competition in the U.K. car market.
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According to a report in The Daily Telegraph, affordable Chinese EVs are set to dominate the U.K.’s roads as Western makers turn to more luxury models.
Chinese Surge
Figures from the FIA Foundation have revealed that 10% of new cars sold in the U.K. already come from China, but that number is set to surge.
“China, which now accounts for 27% of global passenger car sales, has secured a competitive edge in manufacturing smaller EVs, with strengths across key aspects of EV production, including battery supply chains, manufacturing efficiency and software,” it said in a report. “It means China has evolved from a net importer of passenger cars before 2020 to the world’s largest net exporter.”
European and UK carmakers have largely ceded the affordable car market to the Chinese and are instead focused on upmarket SUVs and other large cars, the report claimed.
As an example, Range Rover is planning a new all-electric model in 2026 with starting prices predicted around £130,000 to £150,000. This compares with the £17,000 BYD (BYDDY) Dolphin or the £16,000 MG3.
Tesla Reacts
The article said that there are over 130 EV models available in the U.K. A third of these are priced under £30,000, with more set to come.
It means increasing pressure for Tesla, which is trying its best to compete with its Chinese rivals on price. It was recently forced to offer up to a 40% discount to its EV leasing companies in the U.K. to counter a slump in sales.
British motorists can lease a Tesla EV for just over half of what they paid last year. Two main reasons cited for this discount are the sales slump and a lack of storage space caused by unsold Tesla EVs in the U.K.
In July, Tesla’s U.K. sales plunged nearly 60%. Its EV market share dropped to 0.7% in July, while BYD’s grew to 2.3% of all new EV registrations in the U.K.
As one can see below, the BYD share price has also been in the fast lane this year, compared with Tesla.
Aside from question marks over the design and performance of its models, Tesla has also faced a huge hit to its brand reputation this year given chief executive Elon Musk’s high-profile flirtation with politics.
Is TSLA a Good Stock to Buy Now?
On TipRanks, TSLA has a Hold consensus based on 14 Buy, 15 Hold and 8 Sell ratings. Its highest price target is $500. TSLA stock’s consensus price target is $307.23, implying a 5.15% downside.
