Tesla Inc’s TSLA Chinese peers don't see the Elon Musk-led company's plan to bring out a $25,000 electric vehicle as a cause of major concern, Bloomberg reported Sunday from the Beijing Auto Show.
What Happened: Xpeng Inc’s XPEV Vice Chairman Brian Gu said the company's mid-range EVs are already priced around the $25,000 mark and if Tesla raises its Shanghai plant’s output to one million vehicles annually, it “means the market has grown so much faster and bigger than what we anticipated.”
Gu called Tesla a partner and pointed out the small size of the EV market, which is just 5% of the overall, saying, “We are accelerating that change and conversion."
Freeman Shen, CEO of Baidu Inc BIDU-backed WM Motor Co., pointed out the role Tesla is playing in driving the overall sector growth in China, according to Bloomberg.
Shen likened the Palo Alto-based company to Apple Inc AAPL in its early days. "[They] educate the whole market,” he told Bloomberg.
Nio Inc NIO CEO William Li pointed towards the declining costs of batteries.
“The overall battery cost decrease will help promote EVs. Our price tag is more than $60,000 and even in China we have a lot of work to do for this niche market,” Li observed to Bloomberg.
Why It Matters: Tesla had said it aims to produce a $25,000 fully-autonomous electric car within 3 years at its battery-day event held last week.
The release of the car is synced with the commencement of the mass production of the company’s new 4860 battery cells that are expected to extend the range of EVs, while lowering battery manufacturing costs.
Meanwhile, Chinese automakers have enjoyed investor attention in the U.S. as Nio’s shares reached an all-time high in July. The shares have run up nearly 356% on a year-to-date basis.
Li Auto Inc LI, which sells EVs priced between $21,000 and $70,000, raised $1.1 billion at its initial public offering in the United States in August.
Price Action: Tesla shares traded 3.42% higher at $421.26 in the pre-market session on Monday.
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