Tesla Gets New Competition

By Douglas A. McIntyre Published Dec 28, 6:55AM EST

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Tesla Gets New Competition — © Tesla ASM Lineup of Vehicles (CC BY 2.0) by Steve Jurvetson

Tesla Inc. (NASDAQ: TSLA | TSLA Price Prediction) has held the lead in global sales among electric vehicle (EV) companies, likely since it started selling cars in China in 2017. It already dominated the U.S. market, where its sales took off two years earlier. The United States and China are the two largest car markets in the world.

Tesla has never had any meaningful competition in the United States. Several tiny car companies have launched, but none has sales traction. Large manufacturers like Ford have spent billions to grab market share but with little success. (Five reasons to avoid Tesla’s Cybertruck no matter what.)

Tesla has real competition in China today. BYD, a local EV company, may become the number one EV maker in the world this year. Almost all those sales will be in China, but it has started to expand. In the next several years, BYD will likely have a foothold in Europe. What it does in the United States in the coming years is an open question.

Tesla’s New Competitor

Tesla has a new Chinese competitor: Xiaomi, the second-largest smartphone manufacturer in the world. It is already a Car Connectivity Consortium (CCC) member, which sets standards for connecting smartphones and vehicles.

Xiaomi announced remarkably aggressive plans for its move into EVs. According to Reuters, it has just launched its first EV, the SU7 sedan. The company expects to grow into a major force in the car industry. At the launch of the SU7, Xiaomi Chief Executive Lei Jun said, “By working hard over the next 15 to 20 years, we will become one of the world’s top 5 automakers, striving to lift China’s overall automobile industry.”

Xiaomi’s plans should not be discounted. The company trails only Samsung in global smartphone sales. Xiaomi is barely a decade old, having been founded in 2010.

Xiaomi will almost certainly take the same path BYD has. That is, it will try to get a large part of the Chinese market, which is the largest car market in the world by far. Then, the revenue generated from China sales will be used to move overseas.

Tesla has a new competitor. For now, that may only be in China, but it is another sign the EV market is getting more crowded by the year.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.