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Elon Has A Real Problem. The Biggest AI Company And The Biggest EV Company Are Teaming Up

Austin Smith

Published: February 20, 2025 11:24 am

24/7 Wall St. Key Points:

• Tesla (NASDAQ: TSLA) risks losing ground in China as local EV makers, including BYD, advance AI-driven autonomous driving and vehicle integration.
• Trade tensions and potential tariff escalations could threaten Tesla’s China operations, including its factory exports and AI self-driving approvals.
• Germany and other global markets are reconsidering Chinese EV imports, which could further strengthen BYD’s expansion outside China.
• While investors wonder whether Nvidia will surge or crash after earnings, the smart money is already looking ahead to ‘The Next Nvidia’ stocks that could soar in 2025. Click here to see the investments that AI experts are buzzing about.

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Transcript:

[00:00:04] Doug McIntyre: So we’ve got uh Tesla really battling to become the EV AI company in the world, and then we’ve got a little bit of competition in China. Can you tell us about that?

[00:00:20] Lee Jackson: Well, you know, the day that the DeepSeek A.I. Was hit the tape and everybody knew about it. It absolutely crushed Wall Street. I mean, NVIDIA (NASDAQ: NVDA) was down 17 percent that day, and it was the biggest one day drop for a stock effort.

[00:00:38] Lee Jackson: And now they’re starting collaborate with BYD, the Chinese car and truck company that we’ve talked about a lot recently that our pal Warren Buffett owns. And apparently they’re working on autonomous driving, other applications that can be used within the inside of the car and truck. And boy, if you tag team these two guys, the biggest car company and the biggest AI company in China.

[00:01:05] Lee Jackson: They’re probably going to have something to put out to market.

[00:01:08] Doug McIntyre: Tesla has a unique problem, because China is a huge market for them. And if you move into this sort of, you know, tariff battle, and you start to see these big countries build walls around themselves, and it’s sort of America only, or China only, you’re going to really, Tesla may have a real problem.

[00:01:34] Doug McIntyre: In China, it has not gotten an approved application yet for a full A.I. self driving feature on his car there. It’s applied, but it hasn’t right. Exactly. BYD teams up with somebody. And there was another small, E.V. Company in China. I can’t remember their name, but they just launched something called God’s Eye.

[00:01:57] Doug McIntyre: So they’re down the road. The Chinese are well down the road on this. And what people don’t remember is the fact that there are tariffs on Chinese EVs in the United States and parts of the EU, that’s, there’s still a lot of the world left where you can sell cars.

[00:02:18] Lee Jackson: Well, yeah, as we talked about recently, Doug, the shark truck from BYD is being hailed in some countries like Brazil and Australia and other places that apparently are not terrible, Mexico.

[00:02:33] Lee Jackson: And so they combine their cool truck with AI capability. It’s going to be big. And to be frank, I saw one of the Tesla trucks the other day and that design is just, I don’t know. It just, it’s so clunky and so 45 degree angled that how are they going to compete with a really, you know, cool looking truck that somebody would buy that doesn’t look like an anti tank, you know, instrument for a battlefield?

[00:03:02] Doug McIntyre: It’s a very good question. I mean, I’ve noticed that Germany is now thinking about letting the Chinese manufacturers sell cars in Germany on the theory that they’ll bring jobs in. So we’re starting to see countries that know it’s, it’s inevitable that these Chinese car companies, eventually EV companies.

[00:03:26] Doug McIntyre: We’ll start to move into markets one way or the other. So why not get a trade off? Why not? Why not trade access for jobs?

[00:03:35] Lee Jackson: Absolutely. And needless to say, there’s, you know, Germany and much of Europe is starting to face, you know, what we have faced here is there’s been a populism uprising because they’re sick of wide open borders and people pouring into their country.

[00:03:54] Lee Jackson: And, you know, J.D. Vance kind of pointed that out when he was there and they got a little offended and, you know, he’s just like, it’s, it’s been a huge, huge weight on our country and they’ve realized that over there. So I’m sure they’re going to be looking for, of course, it takes pretty highly skilled people to work in an EV plant, but still, yeah, it could bring in jobs.

[00:04:17] Lee Jackson: You’re exactly right.

[00:04:19] Doug McIntyre: Well, I’m worried about Tesla in China because I’m worried about tariff wars. Tesla has a factory there. They export from there that could end up being a real mess for Tesla and Tesla’s, you know, has enough headaches already, but I think you can add that risk to the list of headaches that they’ve got.

[00:04:40] Lee Jackson: Yeah, I think you’re right. And so we got to keep a close eye on this. I mean, Tesla still is the preeminent player, but they’re going to have to do something about that truck and they’re going to have to come out with a lower price model. That is more affordable.