7 Jan 2023:Electric car price war
Saw that Tesla is cutting its electric vehicle prices in China and this marks Tesla's desire to fight off competition in China. BYD has clinched a top spot with its affordable price range, Tesla is not likely to remain comfortable in its ev domain.
How long could the price war last with price pressure on the downside for Tesla? Saw that the news of Tesla cutting price has an immediate price impact on Nio, Xpeng and Li Auto.. it definitely isn't good and Tesla is using it to squeeze off them from raising cheap capital at minimal cost..
Even Tesla is not having a good time... I do not expect price war to last long enough to eliminate these competitors. But for the over 200 electric vehicles companies, I do expect that there are enough that will face pressure to close shop or to consolidate...
This would be a good scenario for the companies that remain to experience a lift in margin when most close shop. Financing especially low cost of capital is important. I do expect that Xiaomi will find some ways to list in China to bring extra financing to Xiaomi when it's Electric vehicles are coming on stream in 2024.
I remain cautiously optimistic on this though capital market participants still do not see it positively for Xiaomi. I remain an active participant to wait with position building in this.
As always, this should not be construed as any investment or trading advice.
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