Elon Musk praised China’s domestic electric vehicle manufacturers on Friday, calling the country’s automakers “the most competitive in the world.”
The high-profile CEO praised the growth potential of the Chinese market and highlighted innovations among Tesla’s rivals in recorded comments at the World New Energy Vehicle Congress in Haina at a time when Tesla has come under pressure in China.
Shares of Tesla (ticker: TSLA) were 0.5% lower in premarket trading Friday. Shares in Tesla’s Chinese rivals were generally higher:
(NIO) was 0.9% higher and
(XPEV) rose 1.1% in New York premarket, while
(2015.HK) stock fell 1.1% and
(1211.HK) rose 3.4% in Hong Kong trade.
“Chinese consumers want a car with more connected and intelligent features, so we see great potential for the growth of connected, fully self-driving vehicles in China,” Musk said. “I have great respect for the many Chinese automakers powering these technologies.”
Musk added that the Chinese EV companies were so competitive because some of them excel in software development.
“It’s software that will most define the future of the auto industry — from design to production, and especially autonomous driving,” Musk said.
Tesla’s CEO also emphasized the importance of security in the company’s design process, saying data security was the “cornerstone” of development across the industry. His comments come as Tesla comes under pressure in China, the world’s largest electric vehicle market.
Over the past year, the company has come under scrutiny from regulatory authorities in China for data security and security issues, and faces the prospect of a more consolidated domestic industry to compete against.
Meanwhile, technology analyst Daniel Ives of investment firm Wedbush on Friday reiterated his Outperform rating and a $1,000 target for Tesla stock. Tesla shares fell to nearly $752 in premarket trading.
Ives noted the public relations and safety concerns for Tesla in China and said it was an ongoing headwind for the stock starting to reverse course.
The analyst said he sees a number of growth levers for the company in 2022, including an expansion of supply capacity with the launch of the German plant this year and growing demand for EVs over the next 12 to 18 months.
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