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<ul class="summary-list"><li>Donald <keyword id="19906203" type="General" weightage="100" keywordseo="trump" source="keywords">Trump</keyword> pledged to enforce a 10% blanket tariff on all imported goods to the US.</li><li>It is months before Trump's inauguration, but tariffs are already on the lips of global business leaders.</li></ul>As soon as Donald Trump won reelection, CEOs worldwide discussed his plans for <a target="_blank" href="https://www.businessinsider.com/global-reaction-donald-trump-election-victory-tariffs-trade-disputes-2024-11">a new</a><a target="_blank" class="" href="https://www.businessinsider.com/global-reaction-donald-trump-election-victory-tariffs-trade-disputes-2024-11"> era</a> of global tariffs. Although inauguration day is two months away, the leaders of consumer giants like BMW, Ikea, Airbus, and <keyword id="20017281" type="General" weightage="20" keywordseo="ralph-lauren" source="keywords">Ralph Lauren</keyword> were asked about the plans by the press and on earnings calls this week. Trump has vowed to impose a 10% blanket tariff on all foreign goods entering the US and up to 60% and 100% on goods imported from China and Mexico, respectively. He also floated a 100% tariff on imported vehicles and said he'd impose <a target="_blank" class="c-link" href="https://www.businessinsider.com/trump-tariff-threat-john-deere-economists-baffled-2024-9">a 200% tariff</a> on machinery giant John Deere if it continued with plans to move some production to Mexico. <h2>Asia</h2>During Trump's first term, the US and China imposed billions of dollars worth of tariffs against each other. Now, the potential for renewed trade disputes has concerned some Asian business leaders. <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/chinese-stocks-em-fx-currencies-rout-trump-election-stimulus-china-2024-11">Chinese stocks dropped</a> after news of Trump's election victory. <keyword id="23945005" type="General" weightage="20" keywordseo="shinji-aoyama" source="keywords">Shinji Aoyama</keyword>, a global executive vice president at Japan's Honda Motors, said on a Wednesday earnings call that new tariffs on Mexico would have a big impact on Japanese companies. Honda, for instance, has production plants in Mexico. "If the tariff is a permanent one — I suppose it could be not permanent — maybe we would go for the production elsewhere, which is not subjected to the US tariff that we could do it." Aoyama said that he did not expect tariffs to be imposed soon, but added that it would not be easy to stop production quickly in Mexico. "Whoever the president could be, we should not be too much swayed around by them," said Aoyama. <div type="image" title="Shinji Aoyama, global executive vice president of Honda, in a suit behind a grey background." height="2741" width="4000" msid="115088843" hostid="261"></div><keyword id="20489383" type="General" weightage="20" keywordseo="piyush-gupta" source="keywords">Piyush Gupta</keyword>, CEO of Singapore's top bank, DBS, said during a media briefing on Thursday that he found it hard to believe Trump would follow through with his proposed tariffs. "The better thing to do is to wait and see what policy they actually come up with. It's very hard to make projections at this point in time," said Gupta. Instead, he highlighted the impact Trump's policies could have on <a target="_blank" class="" href="https://www.businessinsider.com/federal-reserve-cuts-interest-rates-quarter-point-powell-inflation-election-2024-11">Fed rate cuts</a>. Fewer rate cuts would boost net interest margin — a key metric for banks. "I think a higher interest rate environment is generally better for DBS," Gupta said. He added that DBS would be focusing on the legal and regulatory risks associated with the Trump administration. "They could come up with different kinds of sanctions and other policies — you have to be on top of that." <h2>Europe</h2>Trump has repeatedly said he sees the European Union's trade policies as unfair. During his first term, he <a target="_blank" href="https://www.businessinsider.com/trump-threatens-to-tax-european-cars-if-the-eu-retaliates-against-us-tariffs-2018-3">imposed a number of tariffs</a> on key European industries, including steel, aluminum, and certain luxury goods. Europe responded in turn with tariffs on goods including bourbon whiskey, Harley-Davidson motorbikes, and Levi's. The US is Europe's top trading partner, leaving its businesses highly vulnerable to Trump's proposed 10% tariff. Sectors like automobiles, pharmaceuticals, and chemical products, which represent the lion's share of European exports to the US, would likely experience the biggest economic hit. Shares in BMW, Mercedes, and Volkswagen all fell in response to Trump's victory. The US is by far Germany's largest export market, with goods worth $170 billion sent in 2023, per <a target="_blank" class="" href="https://www.destatis.de/EN/Themes/Economy/Foreign-Trade/Tables/order-rank-germany-trading-partners.pdf?__blob=publicationFile">Germany's statistical authority.</a> On Wednesday, <keyword id="20964414" type="General" weightage="20" keywordseo="oliver-zipse" source="keywords">Oliver Zipse</keyword>, chairman of BMW, downplayed fears over tariffs during a third-quarter earnings call, citing the company's large US business. "We have a strong footprint there, which kind of protects us against anything which might happen on the geopolitical side," he told analysts. Zipse also told reporters, <a target="_blank" class="" href="https://www.reuters.com/business/autos-transportation/bmw-downplays-fears-over-us-tariffs-trump-election-win-2024-11-06/#:~:text=The%20U.S.%20market%20accounted%20for,carmakers%20in%20Europe's%20biggest%20economy">per Reuters,</a> that BMW "shouldn't be too nervous about what might happen." <div type="image" title="Oliver Zipse of BMW speaks in a blue suit behind images of motorbikes and cars." height="3203" width="4804" msid="115088838" hostid="261"></div>Arne Freundt, CEO of German sports brand <keyword id="19922141" type="General" weightage="20" keywordseo="puma" source="keywords">Puma</keyword>, took a similarly relaxed attitude to potential tariffs. "We can shift volumes to other countries swiftly in case of tariffs increase in certain countries," Freundt said. "Politics is politics," Ikea's CEO, Jesper Brodin, told Business Insider when asked about how Trump's tariffs would affect international business. "So we work with longer term cycles and investment frames, and so on. In Ikea, we are very clear on our direction." Guillaume Faury, CEO of the airline Airbus, was more concerned about how tariffs may impact prices. Addressing Trump's proposed tariffs during Airbus' third-quarter earnings call the day before the election, Faury warned that the cost of any new tariffs would be passed along to Airbus's airline customers, as in 2020. "We don't believe that's helping aviation and the competitiveness of the airlines and the aviation industry, but it's something we would be able to manage," Faury said. During his first term, Trump and the European Union were locked in <a target="_blank" href="https://www.businessinsider.com/trump-administration-slaps-tariffs-european-goods-2020-2">a long-running dispute</a> over aircraft subsidies, which the US said put Boeing at a disadvantage, and 15% tariffs were imposed on aircraft imported from the EU. Soon after Trump's departure from the White House, <a target="_blank" class="" href="https://ec.europa.eu/commission/presscorner/detail/en/ip_21_3001">the two sides ended their dispute and axed the tariffs</a>, but renewed tariffs could lead to issues once again. <div type="image" title="Airbus general director Guillaume Faury" height="3000" width="4500" msid="115088848" hostid="261"></div>Martin Sorrell, executive chairman of the UK-based advertising company S4 Capital, described the President-elect as "good news" for North American businesses and companies during an earnings call on Thursday. "Whilst US business doesn't like to talk about it, basically US businesses wanted to see a Trump administration because it means low tax and low regulation," Sorrell said. He added that Europe would be more challenged because of the threat of tariffs. <h2>USA</h2>While tariffs are intended to protect domestic industries by making imports more expensive, companies whose supply chains include foreign contractors could see their costs rise. Justin Picicci, Ralph Lauren's CFO, said that over the last seven-plus years, the fashion brand has diversified its sourcing and developed alternative production for its key products. "Our global sourcing and supply chain is agile and well-positioned," Picicci said during an earnings call Thursday. "So we'll wait and see what, if any, future policy ultimately gets passed. But we've navigated tariffs successfully before, including not so long ago," Picicci said. The costs of tariffs are often passed onto the consumer in the form of price rises. But as demand for domestic goods increases, consumers see higher prices across the board. <keyword id="23945003" type="General" weightage="20" keywordseo="timothy-boyle" source="keywords">Timothy Boyle</keyword>, chief executive of Columbia Sportswear, said in an interview with <a target="_blank" class="" href="https://www.washingtonpost.com/business/2024/10/30/companies-tariffs-trump-prices/">The Washington Post</a> published on October 30 that the brand was set to raise prices if tariffs were imposed. "It's going to be very, very difficult to keep products affordable for Americans," he said. Correction: November 8, 2024 — An earlier version of this story misspelled the name of a Honda executive. He's Shinji Aoyama, not <keyword id="23945004" type="General" weightage="20" keywordseo="shinju-aoyama" source="keywords">Shinju Aoyama</keyword>.

CEOs around the world started talking about Trump's tariffs as soon as he won

<ul class="summary-list"><li>BMW CEO Oliver Zipse says a 2035 gasoline ban will hit the European auto industry.</li><li>Easing the ban, he said, would help reduce the EU's reliance on China for batteries.</li></ul>The European Union needs to move away from its planned ban on gasoline vehicles if it wants to reduce reliance on China for batteries, <a target="_blank" class="" href="https://www.businessinsider.com/bmw-ceo-oliver-zipse-tesla-growth-sales-struggle-electric-vehicles-2021-2">BMW</a> CEO <a target="_blank" class="" href="https://www.businessinsider.com/production-chief-zipse-named-new-boss-at-automaker-bmw-2019-7">Oliver Zipse</a> said on Tuesday.Zipse was addressing attendees at the Paris Automotive Summit when he criticized the EU's requirement for all new cars and vans to have zero emissions from 2035.The law, which was approved by EU countries in March 2023, is part of the region's efforts to achieve climate neutrality by 2050."For the automotive industry, geopolitical resilience and access to markets and raw materials remains critical to success and future viability, while also reducing dependencies on China through openness to technologies," Zipse said on Tuesday.A "correction" of the planned 2035 gasoline vehicle ban, Zipse said, would help reduce European OEMs' reliance on China for batteries.Earlier in his speech, Zipse said the EU's ban could "threaten the European automotive industry in its heart" and "lead to a massive shrinking of the industry as a whole."BMW's decarbonization efforts, Zipse told summit attendees, weren't just focused on the vehicles they produced, but also on their supply chains."To maintain the successful course, a strictly technology-agnostic path with the policy framework is essential," Zipse said."The only thing that counts in the end is the tonne of CO2 that is not emitted and the earlier the better, and not the technological way how this reduction is achieved," he added.Representatives for Zipse at BMW didn't immediately respond to a request for comment from Business Insider sent outside regular business hours.Several Western auto chiefs have commented on the challenges and difficulties that could arise from transitioning their industry to electric vehicles.<a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/stellantis-leverages-its-management-organisation-with-changes-to-drive-performance-under-the-leadership-of-carlos-tavares-1033836989">Stellantis</a> CEO <a target="_blank" class="" href="https://www.businessinsider.com/bmw-stellantis-renault-auto-giants-on-chinese-ev-competition-2024-10">Carlos Tavares,</a> who helms an automaker that owns brands like Chrysler, Fiat, Jeep, Maserati, and Peugeot, is advocating for a short transition from combustion engine vehicles to electric ones.On Monday, Tavares said in an interview with the Financial Times that automakers will find themselves in a "<a target="_blank" class="" href="https://www.businessinsider.com/stellantis-ceo-slow-ev-transition-big-trap-automakers-2024-10">big trap</a>" if the EV transition slows.This, Tavares said, is because automakers will have to continue to invest in both electric and gasoline vehicles, thus incurring higher costs."When you make a longer transition, in fact, you don't replace the old world by the new one. You add up the new world to the old," he said.EV sales have been <a target="_blank" class="" href="https://www.businessinsider.com/electric-car-ev-sales-prices-problem-transportation-2024-1">declining</a> in Europe in recent months. In August, EV registrations fell by nearly 44% compared to the same month a year ago, per the European Automobile Manufacturers' Association.That's on top of the steep competition Western automakers are facing from their Chinese counterparts like <a target="_blank" class="" href="https://www.businessinsider.com/how-chinese-automaker-byd-rose-to-challenge-tesla-2024-4">BYD</a>.Mercedes-Benz CEO <a target="_blank" class="" href="https://www.businessinsider.com/china-electric-cars-mercedes-benz-ola-kallenius-european-union-tariffs-2024-3">Ola Källenius</a> told attendees at the Berlin Global Dialogue conference on October 2 that the Western auto industry is fighting a "<a target="_blank" class="" href="https://www.businessinsider.com/western-auto-chiefs-industry-locked-in-darwinian-battle-with-china-2024-10">Darwinistic-like price war</a>" with their Chinese rivals.This, he said, could eventually result in "market purification.""Many of those players that are around now. Many of those are not going to be around five years from now," Källenius continued."You must control your nerves, keep on investing, keep on innovating and make sure that at the end of that Darwinian battle, that you are one of the combatants that are left and that's what we are focusing on," he added.

BMW CEO: A 2035 gasoline ban will hit the European car industry 'in its heart' and make it reliant on Chinese batteries

<ul class="summary-list"><li>Mark Cuban has criticized Donald Trump's tariff proposals.</li><li>In a Threads post on Friday, he said companies are already bracing for impact.</li></ul><a target="_blank" class="" href="https://www.businessinsider.com/donald-trump-mark-cuban-friends-relationship-history">Mark Cuban</a> is raising the alarm again on President-elect Donald Trump's tariff proposals.In a <a target="_blank" class="" href="https://www.threads.net/@mcuban/post/DCGO8NXxt86">Threads post</a> on Friday, Cuban said companies are already bracing for potential tariffs on Chinese imports by shoring up inventory. Cuban wrote that this will inevitably raise consumer prices due to the cost of storing inventory.While he didn't specifically name Trump, Cuban referred to Trump's proposal to put a 60% tariff on Chinese imports, which some economists say will have an <a target="_blank" class="" href="https://www.businessinsider.com/trump-tariffs-higher-inflation-fed-interest-rates-taxes-mortgage-rates-2024-11?r=nordic">inflationary impact</a> on the economy."Right now every company that imports from China is taking all the cash they can muster, and buying up as much as they can and stuffing it in a warehouse, in anticipation of the tariffs creating accelerated demand for imports," he wrote. "That money would have been used for expansion, raises, bonuses, and other operational elements. Because cash is relatively expensive, and it costs money to store inventory, those companies will increase prices as if they had paid the expected higher tariffs."Cuban, who became an unexpected surrogate for Vice President Kamala Harris' campaign earlier this year, has repeatedly criticized <a target="_blank" class="" href="https://www.businessinsider.com/mark-cuban-trump-new-tax-cut-tariff-every-city-visit-2024-9">Trump's gratuitous use of tariffs</a> in his economic policies."Trump has a new tax cut or tariff for every city he visits. Even when it violates his own signed policies or the law," he wrote in an X post from September.In an interview with Harris, Cuban called Trump "the <a target="_blank" class="" href="https://www.businessinsider.com/mark-cuban-donald-trump-tariffs-christmas-presents-china-prices-harris-2024-10">Grinch that stole Christmas</a>" because the 60% tariff will raise prices on goods like holiday gifts.Cuban added in the Friday Threads post that the tariffs could also push the Chinese government to tell companies to stop buying from the United States altogether.A Trump spokesperson dismissed Cuban's statements. Cuban declined to comment.Many economists say that Trump's tariffs will ultimately hurt consumers' wallets.<a target="_blank" class="" href="https://www.businessinsider.com/fed-rate-cuts-uncertainty-trump-presidency-inflation-tariffs-2024-11">Economist Paul Krugman</a> said the tariffs could see an "inflationary shock that is bigger than almost anything else you could do through federal policy."An analysis from the nonpartisan <a target="_blank" class="" href="https://www.piie.com/sites/default/files/2024-09/wp24-20.pdf">Peterson Institute for International Economics</a> said the 60% tariff on Chinese imports could boost inflation by 0.4 percentage points in 2025. The current inflation rate is 2.4%, the lowest rate in three years. A 0.4-percentage point increase would undercut the <a target="_blank" class="" href="https://www.businessinsider.com/higher-long-term-inflation-outlook-investing-strategy-attractive-bonds-stocks-2024-10">Federal Reserve's goal</a> to bring inflation down to 2%.An analysis from the <a target="_blank" class="" href="https://www.businessinsider.com/trump-tax-plan-tarriffs-benefits-top-earners-study-2024-10">Institute on Taxation and Economic Policy</a>, a left-leaning think tank, said that the tariffs will provide a tax cut for the top 5% of US income earners.Some <a target="_blank" class="" href="https://www.businessinsider.com/trumps-tariffs-threats-world-ceos-thoughts-trade-2024-11">company executives</a> have been vocal about the impacts of the tariff proposals.AutoZone CEO Philip Daniele said on a pre-election earnings call, "If we get tariffs, we will pass those tariff costs back to the consumer."Columbia Sportswear CEO Timothy Boyle told <a target="_blank" class="" href="https://www.washingtonpost.com/business/2024/10/30/companies-tariffs-trump-prices/">The Washington Post</a> that the company is "set to raise prices" under new tariffs and that it will be "very, very difficult to keep products affordable for Americans."<a target="_blank" href="https://www.businessinsider.com/trumps-tariffs-threats-world-ceos-thoughts-trade-2024-11">BMW CEO Oliver Zipse</a> offered a more optimistic view of the tariffs to reporters after the company's Q3 earnings report on Wednesday, saying, "We shouldn't be too nervous about what might happen."He said BMW has an "advantage" over other carmakers because of its large footprint in the United States.

Mark Cuban says Trump's tariff proposals will ramp up prices

<ul class="summary-list"><li>China's EV giants left their European rivals in the dust at the continent's biggest auto show.</li><li>BYD, Xpeng, and Leapmotor unveiled new models at the Paris Motor Show despite looming tariffs.</li></ul>Automakers flocked to Paris for Europe's largest motor show this week — and China's EV giants were the star attraction.BYD, Xpeng, and Leapmotor showcased new vehicles at the Paris Motor Show, even as <a target="_blank" class="" href="https://www.businessinsider.com/chinese-electric-vehicles-european-tariffs-retaliation-vw-bmw-mercedes-tesla-2024-10">the European Union prepares to impose punishing tariffs</a> on Chinese electric vehicles.BYD unveiled the Sealion 7, a stylish electric SUV that the company says can charge from 10% to 80% in just 24 minutes. The company plans to launch the EV in Europe later this year.The automaker, which aims to become Europe's largest electric carmaker by 2030, showed off seven vehicles at its booth in Paris.Crowds quickly formed around the high-tech Yangwang U8, an imposing hybrid SUV that BYD says is capable of floating on water for up to 30 minutes and turning on the spot like a tank.The U8, which was making its European debut but is currently only sold in China, also comes with a drone that allows passengers to scout the road ahead.The Chinese focus on technologically advanced features and smart cars was also apparent elsewhere at the motor show. The booth of Chinese EV firm Xpeng was dominated by <a target="_blank" class="" href="https://www.businessinsider.com/xpeng-tesla-rival-flying-car-prototype-drone-evtol-2022-11">the company's flying car prototype</a>, which hung from the ceiling.<div type="image" title="Xpeng flying car at the Paris auto show" height="1875" width="2500" msid="114288549" hostid="261" sizebytes="398130"></div>CEO He Xiaopeng and co-president Brian Gu revealed the P7+ with camera-powered partially autonomous driving.Executives also discussed the company's investments in humanoid robots, flying cars, and AI hardware.Speaking to reporters, Gu said that although the tariffs, which could see <a target="_blank" class="" href="https://www.businessinsider.com/bmw-stellantis-renault-auto-giants-on-chinese-ev-competition-2024-10">manufacturers face extra levies as high as 35%</a>, would put pressure on Xpeng's business model, the company was not backing down from its European expansion plans."We have a long-term and strong commitment to Europe, which is a region that we think is a core to our business. We will do whatever is necessary to be competitive," he said.<h2 id="995c4927-3f48-4827-9f84-774f4931eb8f">European automakers despair</h2>Among the local automakers at the event, the atmosphere was less positive.<a target="_blank" class="" href="https://www.businessinsider.com/ev-sales-europe-slumping-warning-sign-us-2024-9">Stuttering EV sales across the continent</a> have meant some European manufacturers have scaled back their EV plans and are <a target="_blank" class="" href="https://www.businessinsider.com/bmw-ceo-2035-gasoline-vehicle-ban-eu-more-reliant-china-2024-10">lobbying the EU to rethink emissions targets</a> they say will cost them billions in fines.Speaking at a summit on the sidelines of the motor show, BMW CEO Oliver Zipse said the mood in Europe's auto industry was "trending toward pessimism."He warned that a planned 2035 ban on gasoline vehicles in Europe could "threaten the European automotive industry in its heart," while the CEO of French automaker Renault said that it was clear that Chinese automakers had accelerated beyond their Western rivals."Europe is not the leader anymore. No one can put heads in the sand anymore — the center of gravity is now in China," said Renault boss Luca de Meo, speaking at the same event.Nowhere was that more apparent than at the booth occupied by Chinese EV maker Leapmotor.<div type="image" title="Zhu Jiangming founder of Leapmotor and Carlos Tavares CEO of Stellantis at Paris Motor Show" height="4016" width="6016" msid="114288547" hostid="261" sizebytes="2561190"></div>After launching <a target="_blank" class="" href="https://www.stellantis.com/en/news/press-releases/2024/september/leapmotor-international-opens-orders-in-europe-for-affordable-high-tech-t03-city-car-and-c10-suv-electric-vehicles">two new models in Europe</a> last month, the EV startup <a target="_blank" class="" href="https://www.media.stellantis.com/em-en/leapmotor/press/leapmotor-b10-makes-global-debut-at-the-paris-motor-show">unveiled the B10</a>, an electric vehicle it is planning to sell globally from next year and which could cost 100,000 RMB ($14,000) in China.While unveiling the new model, Leapmotor CEO Zhu Jiangming was joined by Carlos Tavares, the CEO of Jeep, Ram, and Fiat maker Stellantis.The European automaker <a target="_blank" class="" href="https://www.stellantis.com/en/news/press-releases/2024/may/leapmotor-international-begins-operations-to-expand-global-electric-vehicle-sales-starting-september-2024-in-nine-european-countries-followed-by-other-key-growth-regions">struck a deal with Leapmotor</a> earlier this year to invest in the company and gained exclusive rights to sell its affordable EVs outside China.Speaking at the automotive summit on Tuesday, Tavares said European automakers needed to accept the "harsh reality" that Chinese companies were now capable of making EVs for far cheaper than their European rivals.He added that the Leapmotor partnership had been necessary for Stellantis to compete with the country's electric vehicle giants."For us, the best way to compete immediately with the Chinese was to hop on their train, rather than letting it run us over," Tavares said.

China's EV giants shine at Europe's largest auto show while local rivals despair

<ul class="summary-list"><li>European car CEOs criticize EU tariffs on Chinese EVs, urging learning from rivals.</li><li>EU plans tariffs up to 35% on Chinese EVs, fearing market disruption by cheap imports.</li></ul>European car bosses have a solution to <a target="_blank" class="" href="https://www.businessinsider.com/chinese-car-companies-europe-expansion-threatens-mercedes-volkswagen-2023-9">the Chinese EV invasion</a> — if you can't beat them, at least learn from them. Speaking at the Paris Motor Show on Tuesday, the bosses of European auto giants such as BMW and Stellantis attacked the EU's proposed tariffs on Chinese EVs, and urged struggling European automakers to learn from the success of their Chinese rivals to kick-start the continent's sluggish EV sales.The European Union <a target="_blank" href="https://www.businessinsider.com/chinese-electric-vehicles-european-tariffs-retaliation-vw-bmw-mercedes-tesla-2024-10">voted to impose tariffs of up to 35% on Chinese EV makers this month</a> amid fears that a wave of cheap, subsidized Chinese electric vehicles could upend the European auto market.The CEOs of BMW and Stellantis attacked the <a target="_blank" class="" href="https://www.businessinsider.com/chinese-electric-vehicles-european-tariffs-retaliation-vw-bmw-mercedes-tesla-2024-10">proposed tariffs</a>, saying they would be ineffective and might backfire on consumers."We should not be so afraid of everything. It is not so easy to sell non-European cars in Europe," BMW CEO Oliver Zipse said at the motor show.He said that the tariffs would "inflict" damage on BMW, which imports cars from China, and harm its European consumers as a result."We shouldn't give up before the race has even started. We don't need protection, we need fair trade rules," he added.The decision to impose tariffs was not unanimous. Several nations are believed to have voted against the move, including Germany, which had been lobbied by automakers such as BMW and Mercedes, fearful that China might retaliate and target their businesses there.It comes as <a target="_blank" class="" href="https://www.businessinsider.com/ev-sales-europe-slumping-warning-sign-us-2024-9">EV sales in Europe plunge</a>, with registrations falling by 44% in August compared to last year. Stagnating demand has led some automakers to pump the brakes on their EV plans, and others to push for the EU to reconsider looming emissions targets that could leave them facing billions in fines.Meanwhile, their Chinese rivals continue to make inroads into the continent despite trade barriers.<h2 id="e971d3c0-847b-41b4-a2d0-29d9cd3054c7">Europe's EV dilemma</h2>Tesla rivals BYD and <a target="_blank" class="" href="https://www.businessinsider.com/chinese-tesla-rival-xpeng-welcomes-competition-from-elon-musk-2024-10">Xpeng</a> both unveiled new models this week at the Paris Motor Show, one of Europe's biggest auto events.Luca de Meo, the CEO of French automaker Renault, said European automakers had a golden opportunity to learn from their Chinese counterparts, who he said were now developing new cars in as little as two years."There is an opportunity that we have no right to miss, and that is to learn from our competitors," de Meo said, speaking at the summit in Paris."This is what Europeans like Fiat, Citroen, and Renault did a century ago in the United States when Henry Ford revolutionized manufacturing, and it's what the Chinese automakers did with us," he added.In an <a target="_blank" href="https://www.bloomberg.com/news/audio/2024-10-14/bloomberg-talks-renault-ceo-luca-de-meo-podcast">interview with Bloomberg</a> on Monday, de Meo declined to comment on the EU's prospective tariffs on Chinese automakers. However, he said that ramping up "electrification" in Europe would be difficult "without good cooperation" with China, given its dominant role in the EV battery and materials market. Stellantis CEO Carlos Tavares said it was "a dream" to believe that tariffs would effectively protect Western auto industries."These short-term actions will have negative mid and long-term implications. The only way to protect ourselves is to compete with the newcomers and raise ourselves to their game," said the boss of the Jeep and Ram maker.Stellantis has partnered with Chinese EV firm Leapmotor, which has given it exclusive rights to sell Leapmotor's EVs outside of China.Tavares said the company had decided that the best way to compete with China was to partner with one of their automakers, and "hop on their train instead of letting it run us over.""We need to understand where the Chinese automakers are strong, and through our investment in Leapmotor we have a perfect transparent understanding of what makes the difference. That is very helpful," said Tavares.BMW, Stellantis, and Renault did not respond to a request for comment from Business Insider, sent outside normal working hours.

We should be learning from Chinese EV players, not shutting them out of Europe — auto bosses say

<ul class="summary-list"><li><a target="_blank" href="https://www.businessinsider.com/china-auto-sales-tech-features-leaving-american-automakers-behind-2023-7">Chinese automakers</a> have their sights set on world domination.</li><li>That's bad news for European automakers like Volkswagen, Mercedes-Benz, and BMW.</li></ul>Chinese automakers have their sights set on world domination. With their recent push into Europe, experts say companies like Volkswagen, Mercedes-Benz, and BMW should be nervous.The Chinese auto industry has been booming in recent years. Chinese EV companies are expected to outsell foreign brands there, including Ford, GM, and others, for the first time this year. As <a target="_blank" href="https://www.businessinsider.com/china-auto-sales-automakers-ford-gm-making-losing-market-share-2023-4">other global automakers' market share falls in China</a>, homegrown players are expected to continue an upward trajectory for the foreseeable future.That's despite recent signs of an <a target="_blank" href="https://www.businessinsider.com/chinese-automakers-market-share-competing-tesla-global-expansion-2023-8">easing EV market in China</a>. Even with some lessening demand, Chinese manufacturers are pushing full speed ahead in their global expansion, with <a target="_blank" href="https://www.bloomberg.com/news/articles/2023-09-05/rise-of-china-s-ev-makers-threatens-western-firms-ubs-says?sref=LspfQlRv">Europe top of mind</a>.This is worrying executives at some <a target="_blank" href="https://www.nytimes.com/2023/09/05/world/europe/chinese-automakers-iaa-mobility-german-auto-show.html">major legacy auto companies</a>, according to several <a target="_blank" href="https://www.nytimes.com/2023/09/05/world/europe/chinese-automakers-iaa-mobility-german-auto-show.html">reports </a>out of the Munich auto show. Chinese firms took the spotlight at the show, which historically put German manufacturers at center stage.Instead, this year, show goers and industry leaders saw major news from several of China's biggest auto players. BYD is <a target="_blank" href="https://europe.autonews.com/munich-auto-show/byd-takes-tesla-vw-europe-wont-set-sales-targets">bringing a midsize sedan and midsize SUV to Europe</a> later this year. XPeng already operates in four European markets, and just announced plans to start selling in Germany in the coming months. Leapmotor, too, is planning a European expansion in 2024.Germany is "losing our competitiveness," Hildegard Mueller, president of the German Association of the Automotive Industry, said in a <a target="_blank" href="https://www.reuters.com/business/autos-transportation/munich-car-show-shines-spotlight-china-competition-ev-race-2023-09-04/">Reuters report out of the auto show</a>.<h2>Chinese automakers have a lot working in their favor</h2>Any <a target="_blank" href="https://www.cnbc.com/2023/09/05/chinas-electric-carmakers-byd-xpeng-ramp-up-push-overseas.html">lag in EV development</a> that European automakers have gotten away with is now catching up to them. Consulting firm KPMG estimates <a target="_blank" href="https://www.ft.com/content/fddc1c5b-7494-4f0c-94cd-0409d7e9df70">Chinese companies could account for 15% of market share in Europe</a> within just two years.Some experts say that's because China's electric vehicle players are far <a target="_blank" href="https://www.businessinsider.com/china-auto-sales-tech-features-leaving-american-automakers-behind-2023-7">more technologically savvy</a> than many other industry leaders, and they have their fingers on the pulse of consumer demand.As the global auto industry electrifies, China also <a target="_blank" href="https://www.businessinsider.com/china-united-states-electric-vehicle-market-share-auto-brands-pricing-2023-1">already has longstanding advantage</a> with its EV battery supply chain and production, as it controls a large portion of crucial battery development.Chinese EV companies also have an edge against rivals <a target="_blank" href="https://www.businessinsider.com/cheap-chinese-electric-cars-will-upend-the-us-vehicle-market-2023-5">in producing EVs at bigger scale and lower costs</a>, a crucial measure of any electric car companies' future success.With China's automakers undercutting each other and rivals on pricing, "The base car market segment will either vanish or will not be done by European manufacturers," said Oliver Zipse, BMW CEO, per Reuters.<h2>Chinese auto companies are also come for the US</h2>Though the European auto market may have fewer barriers to entry than the US, eventually, these companies are likely to stake their claim in the American car-buying market, too."In our view, China will shift from being an importer to exporter of cars," Morgan Stanley analysts said in an August note. Companies there <a target="_blank" href="https://techcrunch.com/2023/08/08/powered-by-electric-vehicle-growth-china-overtakes-japan-as-biggest-auto-exporter/">recently overtook Japanese automakers</a> in vehicle exports globally.

Chinese car companies are coming for Europe. VW and Mercedes should be nervous.

<ul><li><keyword id="6370252" type="General" weightage="100" keywordseo="ces" source="Orion">CES</keyword> 2023 will commence at Las Vegas from January 5 to January 8, 2023.</li><li>Like every year, we can expect some new products and technologies being showcased from leading tech brands.</li><li>Business Insider India will be reporting on CES with all the major happenings.</li></ul>The new year 2023 will start with one of the biggest consumer electronic show CES in Las Vegas, Nevada from January 5, 2023, to January 8, 2023. Product unveilings, standalone events, and keynotes will take place at various locations around Las Vegas. We usually see prominent names front the industry showing up at the CES for launches, announcements and revealing roadmaps. Some notable leaders are also expected to present keynotes and yearly plans. We also expect new startups showcasing their products alongside big names like Apple, <keyword id="10591" type="General" weightage="50" keywordseo="samsung" source="Orion">Samsung</keyword>, Intel, Asus, AMG, Qualcomm and others. This year is expected to be bigger than last year as rules for visitors seem to be more relaxed, as the official website only states ‘CES encourages all attendees’ to get the booster shots and vaccine. <cmsannotation type="cmsannotation" annotationid="What to expect from CES 2023" comment="subhead" text="What to expect from CES 2023">What to expect from CES 2023</cmsannotation> Last year, several big names decided not to participate in the event due to concerns over the Covid-19 pandemic. This year many tech giants have confirmed that they will return to the show. Those known to be taking part include <keyword id="10387" type="General" weightage="50" keywordseo="microsoft" source="Orion">Microsoft</keyword>, Google, <keyword id="6358540" type="General" weightage="50" keywordseo="sony" source="Orion">Sony</keyword>, LG, Garmin, Asus, Nvidia, and many more. Other than big tech companies, visitors can expect to see concepts and new commercial EVs from the brands like Mercedes-Benz, <keyword id="6374528" type="General" weightage="50" keywordseo="toyota" source="Orion">Toyota</keyword>, BMW, Honda, and many others. Below, we look at some big consumer tech products and technologies that we may see at CES 2023. <cmsannotation type="cmsannotation" annotationid="Micro LEDs to wireless OLED TV" comment="subhead" text="Micro LEDs to wireless OLED TV">Micro LEDs to wireless OLED TV</cmsannotation> 2022 witnessed innovations such as a roll-up screen and 8K resolution, this year at CES 2023, we may see 100-inch-plus MicroLED models from Sony and Samsung. Also, the world’s first totally wireless OLED TV from the new US manufacturer Displace may make its debut at CES 2023. <cmsannotation type="cmsannotation" annotationid="Innovative wearable technology" comment="subhead" text="Innovative wearable technology">Innovative wearable technology</cmsannotation> Upgrades in wearable technology will also make its way to CES 2023. It is expected that smartwatches showcased at CES 2023 will be able to monitor more aspects of our wellness and health. <cmsannotation type="cmsannotation" annotationid="Sony/ Honda Mobility" comment="subhead" text="Sony/ Honda Mobility">Sony/ Honda Mobility</cmsannotation> Sony and Honda have joined hands to build electric vehicles, and it is expected that these two companies will be making some sort of announcement at CES this year. At CES, Sony showcased its concept car, the Vision S prototype. <div type="twitter" handle="SonyGroup_JP" handlename="Sony Group - Japan" image="http://pbs.twimg.com/profile_images/1551376841226989568/_PEGnmzn_normal.jpg" favoritecount="396" retweetcount="120" status="ソニー・ホンダモビリティー株式会社ティザー動画公開2023年1月に米国ラスベガスで開催される #CES2023 ソニー・ホンダモビリティ株式会社がソニープレスカンファレンスに登壇し発表を行います。どうぞご期待ください！… https://t.co/gO65Hcna4n" createdat="1671503400000" id="1605027708819251200"></div> <cmsannotation type="cmsannotation" annotationid="Audio" comment="subhead" text="Audio">Audio</cmsannotation> There are plenty of speakers, headphones, soundbars, and other audio equipment from brands like Sony, LG, JBL, and more at CES 2023. <cmsannotation type="cmsannotation" annotationid="Automotive" comment="subhead" text="Automotive">Automotive</cmsannotation> Cars and EVs are always hot topic at CES events. This year, new technologies in electric cars, self-driving tech, and more may make a debut at CES 2023. <div type="twitter" handle="EvanKirstel" handlename="🇺🇦Evan Kirstel #B2B #TechFluencer" image="http://pbs.twimg.com/profile_images/1602390330799685636/XtDFRE20_normal.jpg" favoritecount="46" retweetcount="19" status="What a ride #CES2023 @MercedesBenz https://t.co/4UxgwfF9Ki" createdat="1672245494000" id="1608140278321352705"></div> <cmsannotation type="cmsannotation" annotationid="Computing" comment="subhead" text="Computing">Computing</cmsannotation> Laptops and PC components are expected to remain the show’s main focus, with dozens of new devices and updates. Asus, Lenovo, Dell, and HP are all expected to unveil new slates of laptops and 2-in-1s for 2023. <div type="twitter" handle="ASUSIndia" handlename="ASUS India" image="http://pbs.twimg.com/profile_images/1569653581036552193/KrOdYiez_normal.jpg" favoritecount="58" retweetcount="5" status="Change is in the air.See you at @CES with #ASUS #CES2023 #ASUSLaunchEvent #ASUSIndia https://t.co/yb5rJSR3Sk" createdat="1672230600000" id="1608077808647000064"></div> <cmsannotation type="cmsannotation" annotationid="Mobile" comment="subhead" text="Mobile">Mobile</cmsannotation> While the smartphone tech has come to introducing incremental upgrades in its tech, we might still see cameras getting better, processors increasing efficiency, maybe new battery and charging tech. Almost every major OEM from Samsung, Xiaomi, Oppo to smaller players are expected to showcase new concepts and technologies. <cmsannotation type="cmsannotation" annotationid="Product and Technology by Samsung" comment="subhead" text="Product and Technology by Samsung">Product and Technology by Samsung</cmsannotation> Samsung will be showcasing its innovative products and technologies for consumer and industry products. Samsung will be unveiling 2nd Gen smart SSD, automotive processor and Ultra-fine pixel technology for mobile photography. <cmsannotation type="cmsannotation" annotationid="Keynotes at CES 2023" comment="subhead" text="Keynotes at CES 2023">Keynotes at CES 2023</cmsannotation> <ul><li>Dr. Lisa Su - Chair and CEO, AMD</li><li>Oliver Zipse - Chairman of the Board of Management, BMW AG</li><li>John May - Chairman and CEO, John Deere</li><li>Gary Shapiro - President and CEO, Consumer Technology Association (CTA)</li><li>Jeremi Gorman - President, Global Advertising, Netflix</li><li>Francine Li - Global Head of Marketing, Riot Games </li></ul>SEE ALSO: <a href="https://www.businessinsider.in/tech/mobile/news/samsung-galaxy-s23-galaxy-s23-ultra-images-leaked-ahead-of-launch-heres-what-all-we-know/articleshow/96515584.cms">Samsung Galaxy S23+, Galaxy S23 Ultra images leaked ahead of launch: Here’s what all we know</a> <a href="https://www.businessinsider.in/tech/news/iphone-15-to-reality-pro-vr-headset-check-out-the-list-of-upcoming-apple-products-in-2023/articleshow/96448076.cms">iPhone 15 to Reality Pro VR headset — check out the list of upcoming Apple products in 2023</a>

CES 2023: Dates, news, products, and what to expect

<ul class="summary-list"><li><keyword id="107096" type="COMPANY" weightage="60" keywordseo="Tesla">Tesla</keyword> may struggle to maintain its rapid growth as other carmakers launch their own EVs, Oliver Zipse said Monday.</li><li>"The rest of the industry is moving ahead big time," the <keyword id="6355119" type="ORGANIZATION" weightage="60" keywordseo="bmw">BMW</keyword> CEO said.</li><li>Tesla delivered almost 500,000 vehicles in 2020. Other automakers have committed to boosting electric-car sales.</li></ul>Tesla may struggle to maintain its rapid growth as its competitors ramp up sales of their own <keyword id="6354973" type="UNKNOWN" weightage="60" keywordseo="electric-vehicles">electric vehicles</keyword>, BMW's CEO said Monday.<a href="https://www.businessinsider.com/telsa-just-missed-its-goal-of-delivering-500000-vehicles-2021-1">Tesla delivered almost 500,000 vehicles in 2020</a>, and <a href="https://www.businessinsider.com/tesla-q4-earnings-2020-profit-elon-musk-stock-price-2021-1">said it expects "50% average annual growth" across the next few years</a>."It won't be easy for Tesla to continue at that speed because the rest of the industry is moving ahead big time," BMW CEO Oliver Zipse said at the DLD All Stars conference Monday.<a href="https://www.bloomberg.com/news/articles/2021-02-22/bmw-ceo-doubts-tesla-can-easily-continue-growing-as-quickly?sref=lAVQtUwz">Bloomberg</a> first reported on the news.Other automakers are increasingly scaling up their efforts to launch electric cars as the market continues to boom.<a href="https://www.businessinsider.com/best-cheap-affordable-evs-electric-vehicles-tesla-nissan-ford-mustang-2021-2">Zipse's company, BMW, started selling the Mini Electric</a> in 2020, which is the <a href="https://www.businessinsider.com/best-cheap-affordable-evs-electric-vehicles-tesla-nissan-ford-mustang-2021-2">lowest-cost electric car</a> currently available in the US, Insider's Tim Levin reported.<a href="https://www.businessinsider.com/gm-aims-to-end-sale-of-gasoline-diesel-powered-cars-suvs-light-trucks-by-2035-2021-1">General Motors</a>, the US' largest automaker, said it would <a href="https://www.businessinsider.com/gm-aims-to-end-sale-of-gasoline-diesel-powered-cars-suvs-light-trucks-by-2035-2021-1">end all sales of gas-powered vehicles</a> by 2035 and would invest $27 billion in electric and autonomous vehicles over the next five years.<a href="https://www.businessinsider.com/jaguar-land-rover-fully-electric-2039-2021-2">Jaguar Land Rover</a>, meanwhile, said it would go <a href="https://www.businessinsider.com/jaguar-land-rover-fully-electric-2039-2021-2">all-electric by 2039</a>. <a href="https://www.businessinsider.com/volkswagen-ceo-diess-not-afraid-of-an-apple-electric-car-2021-2">Volkswagen's electric vehicle sales</a> increased more than three-fold in 2020, and even <a href="https://www.businessinsider.com/apple-car-electric-autonomous-self-driving-nissan-talks-hyundai-2021-2">Apple</a> is reportedly building its own electric car.But despite the increased competition, analysts expect Tesla's sales to continue to boom."With a green tidal wave on the horizon we believe Tesla will see strong growth in the US for 2021 and beyond and add to the white hot growth the company is seeing in <keyword id="1334" type="COUNTRY" weightage="60" keywordseo="China">China</keyword> and Europe so far this year," Daniel Ives, an analyst at Wedbush, said.Tesla's success also depends on economic recovery from the pandemic. Its <a href="https://www.businessinsider.com/telsa-just-missed-its-goal-of-delivering-500000-vehicles-2021-1">sales fell</a> around 15% in the second half of 2020 as consumers cut back spending on cars during the pandemic.But the company is ramping up efforts to make a more affordable electric car, which in turn could boost sales. In September, <a href="https://www.businessinsider.com/tesla-battery-day-elon-musk-promises-25000-autonomous-electric-ev-2020-9">CEO Elon Musk said the company would make a $25,000 "fully autonomous" electric car</a> in about three years, and last week <a href="https://www.businessinsider.com/elon-musk-tesla-model-3-model-y-price-cut-electric-2021-2">Tesla slashed the prices of some of its vehicles</a>.Sales in China, <a href="https://www.businessinsider.com/why-china-loves-tesla-elon-musk-2020-5">the world's largest car market</a>, could be central to Tesla's success.Tesla <a href="https://markets.businessinsider.com/news/stocks/tesla-stock-price-one-million-cars-by-2022-china-demand-2020-12-1029925807">could deliver one million vehicles in 2022 because of "eye popping demand" from China</a>, which could account for 40% of its global sales, Ives said in December. The country, where <a href="https://www.businessinsider.com/tesla-starts-model-y-production-shanghai-china-reduces-price-2021-1">Tesla began delivering Shanghai-made Model Y vehicles</a> in January, is the "heart and lungs" of Tesla's demand growth story, he said.<a href="https://www.businessinsider.com/musk-tesla-will-launch-electric-cars-in-india-in-2021-2020-10">Tesla is also edging closer to launching operations in India</a> later this year."Over the next five years, we expect <keyword id="3658" type="COUNTRY" weightage="60" keywordseo="India">India</keyword>'s car market to double in size, with electric vehicles increasing their share," David Leggett, automotive analyst at GlobalData, <a href="https://www.businessinsider.com/musk-tesla-will-launch-electric-cars-in-india-in-2021-2020-10">said</a>.

BMW's CEO says Tesla will struggle to maintain its rapid growth because of mounting competition among electric-car makers

Elon Musk has started an electric-vehicle price war that Tesla can't finish.Under increasing pressure from new competition, <a target="_blank" href="https://www.businessinsider.com/tesla-model-3-model-y-less-than-average-gas-car-2023-10">Tesla spent the past year slashing the average price</a> of its models by roughly 25%. The Model 3 fell from $48,000 to $44,380. The luxury Model S, meanwhile, plunged from a high of $130,000 to $96,380. The cars, as they say, have been priced to move.It's an unusual business strategy, to put it mildly. "I can't think of another point in the history of automotive when a brand that wasn't going out of business cut prices 20% a year," Mark Schirmer, the director of communications at the research firm Cox Automotive, told me. <a target="_blank" href="https://www.businessinsider.com/teslas-price-cuts-margins-ever-musk-not-giving-up2023-7">Tesla is hoping that lower prices</a> will drive up sales and slow the advance of the company's rivals — maybe even scare some of them out of the market altogether.But that's not what's happening. Lower prices are not translating into higher sales. The number of cars Tesla delivered to customers in the third quarter actually declined. Revenue is dropping, and the company's once fat profit margins are getting squeezed — down to 17.9% in the third quarter, compared with 25.1% a year ago. Competitors aren't being driven out of business, either. Once totally dominant in the EV space, Tesla's share of the US market has fallen from 62% at the beginning of the year <a target="_blank" href="https://www.coxautoinc.com/market-insights/q3-2023-ev-sales/">to only 50%</a> today.To make matters worse, the public's <a target="_blank" href="https://www.businessinsider.com/auto-executives-coming-clean-evs-arent-working-2023-10">appetite for EVs isn't growing as fast</a> as automakers expected. That means Tesla has set off a protracted battle for a piece of a pie that's growing crumb by crumb."If you do the price war, you have to make sure you have enough volume to increase and maintain profitability," John Zhang, a professor of marketing at the Wharton School, said. "It has to be a continuous battle. This war you have to wage all the way. And you need to plan ahead. That's how you win."Conversely, some experts will tell you that price wars are unwinnable — that they're a race to the bottom that serves only to kill profitability for the entire industry. And in an industry where the underlying technology — and, thus, the costs of production — are changing rapidly, no one can be sure where the bottom is. Winnable or not, Musk chose a terrible time to pick a fight. As legacy automakers walk the tightrope to our electric future, they can rely on sales of their traditional combustion-engine vehicles to provide them with a safety net. Tesla has no safety net. For Musk, it's go electric, or bust.<h2>Tesla creates a cash problem — again</h2>Musk's decision to offer deep discounts on his vehicles was an act of pure desperation. That became apparent earlier this month when <a target="_blank" href="https://www.businessinsider.com/tesla-earnings-q3-report-live-updates-guidance-analyst-call-stock-reaction-2023-10">Tesla reported its third-quarter numbers</a>. The results were frightful across the board: Tesla missed Wall Street's expectations on revenue, vehicle deliveries, and free cash flow, which was down to $848 million from $3.4 billion a year before. Most importantly, the company reported that its gross margins — a measure of the company's profitability after costs — continued to shrink. This horrified investors who had just gotten used to Tesla making money.Over the past two years, despite Tesla's addition of more moderately priced vehicles such as the Model 3 sedan and the Model Y compact SUV, its margins have grown to be some of the fattest in the car business. That has bolstered the argument that Tesla wasn't a traditional car company such as Ford or GM and deserved its much, much higher stock price. Naturally, this is a status Musk would like Tesla to keep, so he's promised to do everything he can to cut costs. (On the conference call on third-quarter earnings, he said it's like "'Game of Thrones,' but with pennies.")Unfortunately, cost cuts can't be spoken into existence, not even by Musk. In the third quarter, Tesla's capital expenditures actually ballooned to their highest level in a year — $2.4 billion, up from $1.8 billion a year ago. If prices are going down, and costs are going up, <a target="_blank" href="https://markets.businessinsider.com/news/stocks/tesla-stock-q3-earnings-reactions-valuation-looks-increasingly-unsustainable-tsla-2023-10">even the most fervent of Musk's Wall Street believers</a> will tell you that margins don't have a prayer. Musk gave no indication of when this cash drought would end or how margins would improve. He could not say when the company's Cybertruck would be available to the public and even admitted that Tesla had "dug its own grave" trying to build the new vehicle. He also could not provide details on when there would be a meaningful update to the aging models that currently make up Tesla's fleet. But there was one thing Musk was clear on: Prices need to keep coming down. In a call that <a target="_blank" href="https://www.businessinsider.com/tesla-earnings-mini-disaster-stock-price-wall-street-analyst-2023-10">Wall Street widely acknowledged</a> as one of Tesla's worst in some time, it was like a mantra Musk repeated over and over again, with a certainty borne more of faith than facts."So I just can't emphasize again how important cost is," Musk said. "It's not an optional thing for most people. It is a necessary thing. We have to make our cars more affordable so that people can buy them."The only real hope Musk offered investors was a suggestion that driverless-car technology would (eventually, someday) offset Tesla's falling prices. But how exactly the math would work on that trade-off was unclear. Months into his pricing campaign, Musk has nothing to show for it, and no plans to change. The <a target="_blank" href="https://markets.businessinsider.com/news/stocks/elon-musk-tesla-stock-share-price-cybertruck-earnings-valuation-wipeout-2023-10">market responded to Musk's disappearing profits</a> by dragging Tesla's stock down 15%.<h2>The whole EV market is in a cash bleed</h2>Tesla's dismal results illuminated Musk's short-term reason for the desperate pricing strategy. But the underlying reason is even more alarming: Despite increasing demand and bountiful government investment, the world's transition from gas to electric cars is not going as smoothly as automakers expected.Experts will tell you with certainty that EVs are the future and that internal-combustion engines will eventually disappear from America's driveways and parking lots. But the march to electrified highways isn't proceeding in a straight line. There are two main reasons that consumer appetite for EVs hasn't been <a target="_blank" href="https://www.businessinsider.com/automakers-over-estimated-electric-vehicle-demand-early-adopters-2023-10">as robust as automakers initially expected</a>. One is the uneven way new technologies are adopted; it inevitably takes awhile to sell people on even the most amazing innovation. The other is the slowing global economy. Customers around the world have become more price-sensitive, which is <a target="_blank" href="https://www.businessinsider.com/electrc-vehicle-demand-problem-affordability-expense-price-cost-2023-10">bad news for EVs</a>: While the average selling price of an electric vehicle is going down — from $65,000 last year to $53,633 in July — it's still higher than <a target="_blank" href="https://www.coxautoinc.com/market-insights/kbb-atp-august-2023/">the average selling price for new vehicles overall</a>, which hovers around $48,451.<div type="image" title="Elon Musk onstage with a Cybertruck." height="2826" width="4800" msid="105167970" hostid="261" sizebytes="468442"></div>Traditional carmakers, from Ford and GM to BMW and Mercedes, have responded to the EV price challenge by doing what they do best: building the gas cars that customers still want. "Ford is able to balance production of gas, hybrid, and electric vehicles to match the speed of EV adoption in a way that others can't," John Lawler, Ford's chief financial officer, said during the company's latest earnings call. "That's obviously good for customers, who get the products they want — and good for us, too, because disciplined capital allocation and not chasing scale at all costs maximizes profitability and cash flow."But while the traditional automakers can coast on their older models, Tesla doesn't have that option. Cue the price cuts."Musk's starting a price war," Schirmer of Cox Automotive said. "I do think there was nothing else he could do, in that he doesn't have anything really new to compete against these other companies. He says it isn't because he has a demand problem. But I've been in this business a long time, and I have never seen anyone cut prices without having a demand problem."Musk's goal to undercut the rest of the market on price is no secret — and it's made other car companies none too happy. Given the uncertainty around the future of EVs, almost every other automaker is reluctant to slash prices on their models because doing so would make continued investment in EV tech an even tougher business case to make. In April, <a target="_blank" href="https://fortune.com/2023/04/21/elon-musk-tesla-price-cuts-could-start-pricing-war-ford-ceo-jim-farley/">Ford CEO Jim Farley said Tesla's cuts</a> could start an unsustainable price war. But the company still felt forced to <a target="_blank" href="https://www.businessinsider.com/ford-mustang-mach-e-price-cuts-tesla-price-war-electric-cars-evs-2023-1">cut the price of its Mustang Mach-E SUV</a> at least twice this year. Many auto executives are refusing to engage in Musk's fight because they know from experience that the best way to win a price war is not to get into one in the first place. "We have no interest in sinking prices to gain market share," BMW CEO Oliver Zipse said in a recent call with investors. "That's not our strategy."There are other, more imaginative, more savvy ways to entice customers without a fire sale. During the 2008 recession, rather than slashing prices, Hyundai tried to figure out what was holding customers back from buying a new car. Turns out, it was worries over getting laid off. So Hyundai offered customers a guarantee: Anyone who bought a car and then lost their job could sell it back to the company. That's the kind of creative work-around that gets a car company through hard times unscathed. It's an exercise in market research and advertising. Tesla has given little indication that it does the former and has flatly rejected doing the latter. Musk has always maintained that his outsize public profile makes advertising for Tesla a waste."Rationally, he doesn't have to drop prices so fast. He can only delay the competition," Navdeep Sodhi, a managing director at the pricing consultancy Sodhi Pricing, said. "If Elon was smart, he would not drop the price. Instead, he should justify the cost of ownership."Part of the point of advertising — and the reason <a target="_blank" href="https://www.cnbc.com/2023/10/14/as-tesla-price-cuts-concede-billions-musk-is-pushed-to-spend-on-ads.html">investors are pushing Tesla</a> to start spending money on it — is to educate customers about why Tesla's vehicles are worth their higher price tags. According to Sodhi, Tesla has a compelling argument to make about how much money EVs can save customers over time. Why slash prices if you can persuade customers to pay more? Building a market for a product such as an electric vehicle is a marathon, not a sprint. Traditional carmakers expect to lose money on their EVs for the foreseeable future. Tesla just became profitable in 2021. If it slides back into the red because of its price cuts, expect investors to run in another direction.<h2>A losing battle</h2>If the short-term point of Tesla's price cuts is to maintain its market share and sell more cars, it's not working. At the same time, the move could damage Tesla in the long term. When companies play with price, Zhang said, they're playing with customer expectations. Once customers get used to paying $40,000 for a standard EV, they're not going to go back to $60,000. In a price war, you may prompt a few more people to buy from you today, but you'll be sacrificing millions of dollars in future sales. Then there are all the customers who paid that $60,000 in the past. Learning that they could have saved thousands of dollars if they'd waited a few months to make their purchase has a negative impact on brand loyalty. In China, Tesla's price cuts even <a target="_blank" href="https://www.reuters.com/business/autos-transportation/tesla-owners-china-protest-against-surprise-price-cuts-they-missed-2023-01-07/">sparked protests among owners</a> who paid more for their vehicles.But Musk isn't thinking about the future. He needs the money he hopes to make from price cuts — and he needs it now. Making cars is an expensive business, and if the price cuts don't generate more demand, Tesla's fortune could change rather quickly. "If you have a factory that makes something and you're not selling it, you're losing huge money in automotive," Schirmer said.This is a moment when you want an experienced team of automotive executives at the helm of your company. Instead, Tesla is onboarding a new chief financial officer. Zach Kirkhorn — a Tesla veteran of 13 years who presided over the most profitable quarters in the company's history — stepped down as chief financial officer in August. According to <a target="_blank" href="https://www.sec.gov/Archives/edgar/data/1318605/000162828023034847/exhibit101.htm">company documents</a>, his severance package included the kind of payoff and strict nondisparagement requirements that reek of a C-suite firing.In the end, price cuts won't be enough to drive sales. If Tesla is going to keep its business healthy, it needs to appeal to new customers beyond Musk fans and early adopters. It needs to conduct research and launch advertising that makes the right argument, to the right customers, that one of Tesla's four models is the right car for them. Discounting the sticker price may drive a few sales. But in the long run, you can't build a global automotive juggernaut without cash flow. Musk himself has admitted that Tesla narrowly evaded death by cash burn in both 2008 and 2018.Waging price war during a downturn is a challenge unlike any Tesla has faced before. The company has survived for years on a first-mover advantage, on being small and nimble, and on the willingness of investors to bail it out. But today's Tesla is increasingly a normal car company, with normal car-company problems. Musk's unfulfilled promises of robo-taxis and unmatched artificial intelligence may dazzle the market for a while, but they're not driving the sales Tesla needs to win the price war it started. The company has a growing fleet of competition, an expensive manufacturing process, and shareholders who have grown used to fat profits. If cutting prices is all Tesla can do to survive this new reality, it will continue to bleed money every time the rubber hits the road. And at some point, turning it around may no longer be an option.<a target="_blank" rel="" href="https://www.businessinsider.com/author/linette-lopez">Linette Lopez</a> is a senior correspondent at Insider.

Elon Musk started a price war that Tesla can't win

<div class="KonaFilter image-container display-table"><div><div class="image"></div></div></div>Here is what you need to know.1. <a href="https://www.businessinsider.com/amazon-q3-earnings-shocker-wipes-54-billion-off-market-cap-2019-10?r=US&amp;IR=T" target="_blank" rel="noreferrer noopener" data-qa="message_attachment_title_link">Amazon's earnings shocker is set to wipe over $50 billion from its market cap.</a> The tech giant missed analyst estimates for its latest earnings. 2. <a href="https://www.businessinsider.com/bmw-ceo-says-trade-war-could-cost-us-jobs-2019-10" data-analytics-position="2" data-analytics-module="onecolumn-post_image_wide">BMW CEO says trade war could cost American jobs</a>. Oliver Zipse said on Friday an imposition of trade barriers would hamper the ability of BMW's largest car factory, based in Spartanburg, South Carolina, to export around 70% of its products across the globe.<a href="https://www.businessinsider.com/bmw-ceo-says-trade-war-could-cost-us-jobs-2019-10" data-analytics-position="2" data-analytics-module="onecolumn-post_image_wide"></a>3.<a href="https://www.businessinsider.com/weworks-china-rival-ucommune-reportedly-filed-us-ipo-this-year-2019-10?r=US&amp;IR=T" target="_blank" rel="noreferrer noopener" data-qa="message_attachment_title_link">WeWork's biggest Chinese rival is reportedly planning to go public in the US this year</a>. Ucommune, valued at $2.6 billion about a year ago, has filed a confidential IPO prospectus with the SEC, Reuters reported.4. <a href="https://www.businessinsider.com/chinas-xi-urges-acceleration-of-development-of-blockchain-technology-2019-10?r=US&amp;IR=T">China's Xi urges acceleration of development of blockchain technology as the core for innovation</a>. He made the comments at a study session of the Politburo held on Thursday. 5. <a href="https://www.businessinsider.com/ken-fisher-losses-near-3-billion-goldman-sachs-pulls-funds-2019-10?r=US&amp;IR=T" target="_blank" rel="noreferrer noopener" data-qa="message_attachment_title_link">Billionaire Ken Fisher's losses approach $3 billion after Goldman Sachs reportedly drops him over sexist comments</a>. The banking titan's $234 million withdrawal takes the money manager's total reported losses to $2.7 billion.6. <a href="https://www.businessinsider.com/amazon-prepares-for-expensive-one-day-shipping-over-holiday-season-2019-10?r=US&amp;IR=T" target="_blank" rel="noreferrer noopener" data-qa="message_attachment_title_link">Amazon expects one-day shipping will cost it $1.5 billion over the holiday season</a>. Amazon is preparing itself for additional one-day shipping expenses during the fourth quarter.7. <a href="https://www.businessinsider.com/boeing-737-max-final-lion-air-report-design-crew-errors-2019-10" data-analytics-position="2" data-analytics-module="big_picture">The full Lion Air crash report hammers Boeing for design flaws that brought down a 737 Max and killed 189 people. </a>The report criticized Boeing for not telling pilots about the system and for failing to notice that an alert in the plane was not working.8. Stocks are nudging upwards on Friday. US futures underlying the S&amp;P 500 (+0.1%) and the Nasdaq (+0.2%) are rising. In Europe, the DAX (-0.2%) and Euro Stoxx 50 (-0.3%) are down. Asian stocks closed mixed as the Nikkei (+0.2%) and Shanghai Composite (+0.5%) rose but the Hang Seng (-0.5%) fell.9. <a href="https://markets.businessinsider.com/earnings-calendar?utm_source=markets&amp;utm_medium=ingest">There is a stack of earnings out</a>. Barclays and AB Inbev both released earnings earlier today. 10. <a href="https://markets.businessinsider.com/earnings-calendar?utm_source=markets&amp;utm_medium=ingest">Today is a quieter day for data.</a> The Michigan Consumer Sentiment Index is the highlight.

10 things you need to know before the opening bell

<div class="KonaFilter image-container display-table float_right"><div><div class="image on-image">BMWThe BMW i3.</div></div></div>Apple has reportedly been in talks with BMW about using its i3 vehicle as the basis of an electric car, <a href="http://www.manager-magazin.de/unternehmen/autoindustrie/apple-an-karosserie-des-bmw-elektroautos-i3-interessiert-a-1044901.html">according to German-language publication Manager Magazin</a> (<a href="https://translate.google.co.uk/#auto/en/Apple%20an%20Karosserie%20des%20BMW-Elektroautos%20i3%20interessiert%0A%20Von%20Michael%20Freitag%2021.791%0ABMWs%20wechselvolle%20Historie%3A%20Wie%20BMW%20von%20der%20Fast-Pleite%20zum%20Luxusauto-Primus%20aufstieg%0AFotosREUTERS%0A%0ADer%20deutsche%20Autohersteller%20BMW%20und%20der%20kalifornische%20Technologiekonzern%20Apple%20haben%20über%20eine%20weitgehende%20Kooperation%20verhandelt.%20Apple%20sei%20an%20der%20Karosserie%20des%20BMW-Elektroautos%20i3%20interessiert%2C%20berichtet%20das%20manager%20magazin%20in%20seiner%20neuesten%20Ausgabe%20(Erscheinungstermin%3A%2024.%20Juli).%20Unternehmenschef%20Tim%20Cook%20erwäge%2C%20die%20BMW-Modellplattform%20für%20ein%20eigenes%20Autoprojekt%20zu%20nutzen%2C%20heißt%20es%20im%20Umfeld%20der%20Unternehmen.%20Erste%20Verhandlungen%20im%20Spätherbst%202014%20seien%20jedoch%20ergebnislos%20abgebrochen%20worden.%20Man%20habe%20vereinbart%2C%20im%20Gespräch%20zu%20bleiben%20und%20die%20Standpunkte%20von%20Zeit%20zu%20Zeit%20gemeinsam%20zu%20überprüfen.%0A%0ADer%20US-Konzern%2C%20bislang%20vor%20allem%20mit%20Computern%20und%20Mobiltelefonen%20erfolgreich%2C%20bereitet%20seit%20einiger%20Zeit%20Entwicklung%20und%20Bau%20eines%20iCars%20vor.%20Das%20Auto%20würde%20genau%20wie%20der%20i3%20ein%20Elektroauto.%20Apple-Chef%20Tim%20Cook%20besichtigte%20deshalb%20während%20eines%20Besuchs%20bei%20BMW%20gemeinsam%20mit%20anderen%20Topmanagern%20die%20i3-Produktion%20in%20Leipzig.%0A%0AMehr%20zum%20Thema%0ABMWs%20wechselvolle%20Historie%3A%20Wie%20BMW%20von%20der%20Fast-Pleite%20zum%20Luxusauto-Primus%20aufstieg%0ABMW-Großaktionär%20Stefan%20Quandt%20spricht%20über%20sein%20Batterieprojekt%3A%20So%20will%20der%20Anti-Musk%20den%20Energiemarkt%20aufmischen%0ABMW-Großaktionär%20über%20die%20Hybris%20der%20US-Techkonzerne%3A%20Stefan%20Quandt%3A%20%22Der%20Monopolkapitalismus%20des%20Silicon%20Valley%20ist%20nicht%20zukunftsfähig%22%0ABMW%20verkauft%20den%20i3%20bislang%20nicht%20so%20häufig%20wie%20erwartet.%20Der%20neue%20Konzernchef%20Harald%20Krüger%20wolle%20aber%20dennoch%20zusätzliche%20Elektroautos%20auf%20den%20Markt%20bringen%2C%20berichtet%20das%20manager%20magazin%20weiter.%20Zum%20Ende%20des%20Jahrzehnts%20sei%20ein%20Modell%20mit%20deutlich%20größerer%20Elektroreichweite%20geplant.%20Das%20Design%20des%20Autos%20werde%20wahrscheinlich%20in%20Richtung%20der%20Geländewagen-ähnlichen%20X-Reihe%20gehen%2C%20heißt%20es%20in%20Unternehmenskreisen.%20Der%20i3%20kommt%20derzeit%20mit%20einer%20Batterieladung%20auf%20rund%20150%20Kilometer%20Reichweite.%0AZusätzlich%20plant%20das%20Unternehmen%20Neuauflagen%20seiner%20Elektroautos%20i3%20und%20i8%20sowie%20eine%20Cabrio-Version%20des%20i8.%20Die%20endgültige%20Entscheidung%20über%20die%20zusätzlichen%20Modelle%20solle%20noch%20in%20diesem%20Jahr%20fallen%2C%20berichten%20Topmanager.%20Konzernchef%20Krüger%20wolle%20außerdem%20die%20i-Technologie%20künftig%20verstärkt%20in%20die%20gesamte%20BMW-Palette%20einbringen.%20Beginnend%20mit%20dem%20Mittelklassemodell%203er%20solle%20es%20zu%20allen%20Autos%20Plug-in-Hybrid-Varianten%20geben.%0A%0AMehr%20Wirtschaft%20aus%20erster%20Hand%3F%20Der%20obige%20Text%20ist%20nur%20ein%20minimaler%20Ausschnitt%20aus%20der%20August-Ausgabe%20des%20manager%20magazins.%20Das%20neue%20Heft%20(und%20die%20nächste%20Ausgabe)%20können%20Sie%20hier%20im%20Vorteilsangebot%20bestellen.%20Die%20digitale%20Ausgabe%20ist%20hier%20für%20Sie%20verfügbar%2C%20ab%20Freitag%20liegt%20die%20Print-Ausgabe%20am%20Kiosk.%20Abonnenten%20liefern%20wir%20das%20frische%20manager%20magazin%20am%20Donnerstag%20in%20den%20Briefkasten%20oder%20elektronisch.%20Oder%20beides.">translation</a>).Since February, there has been a slew of reports about Apple's interest in the automotive industry. It reportedly has hundreds of employees working on the project, codenamed "Project Titan." There's no guarantee that we will ever see a commercial release, but the Cupertino company is clearly increasingly interested in the space.It is already developing an in-car software system for other auto manufacturers called CarPlay. But its hires of auto execs and individuals with deep experience in vehicular hardware suggests its ambitions go beyond just software.Apple is apparently interested in using the body of the i3, an electric car built by BMW, as the basis of its own vehicle. However, no deal has been reached yet, and the negotiations, which began in Autumn 2014, have reportedly broken off - though with the companies agreeing to check in with one another periodically.The report also claims that CEO Tim Cook visited BMW facilities in Leipzig, Germany. No date is given for this meeting, but we do know that Cook <a href="http://uk.businessinsider.com/tim-cook-in-germany-2015-2">was in Germany in February 2015 visiting a number of other companies</a>.We've reached out to Apple and BMW and will update if they respond, although Apple has so far steadfastly refused to comment on recent speculation about an "Apple car." In July 2015, <a href="http://www.reuters.com/article/2015/07/01/us-autos-bmw-apple-idUSKCN0PB4AG20150701">BMW manager Oliver Zipse said that the company was open to working with a tech company</a>, saying "We live in a world of partnerships."<h2>Here's a quick rundown of some of the reports and speculation surrounding "Project Titan":</h2><ul><li>It's being headed up by Steve Zadesky, a veteran of Ford, who also helped develop the iPod. There have also been <a href="http://www.ft.com/cms/s/0/84906352-b3a5-11e4-9449-00144feab7de.html#axzz3bQAZRThx">reports </a><a href="http://www.ft.com/cms/s/0/84906352-b3a5-11e4-9449-00144feab7de.html#axzz3bQAZRThx">Zadesky</a><a href="http://www.ft.com/cms/s/0/84906352-b3a5-11e4-9449-00144feab7de.html#axzz3bQAZRThx"> has been visiting Austria</a> to find a manufacturer to work with. He has hundreds of people working on it. <a href="http://uk.businessinsider.com/apple-employee-well-give-tesla-a-run-for-its-money-2015-2?r=US">An Apple employee reached out to Business Insider earlier this year to tell us the company is working on something that will</a> "give Tesla a run for its money."</li><li>Apple has made numerous hires in the automotive hardware space. <a href="http://9to5mac.com/2015/02/19/apple-electric-car-team/">9to5Mac's Jordan Kahn previously put together an extensive list of these recent Apple hires who have experience in the hardware and electric-battery businesses</a>. These include Robert Gough, who previously worked on car-safety systems; John Ireland, who has worked at Tesla and before that as a researcher at Ireland's National Renewable Energy Laboratory; and David Perner, who previously worked as an engineer on hybrid engines at Ford. Apple has even been sued by an electric battery company which alleges it poached its engineers. Most recently, it hired Doug Betts - a former exec from Fiat-Chrysler.</li><li>Industry chatter is growing. <a href="http://uk.businessinsider.com/heres-more-evidence-that-apple-could-be-working-on-a-car-2015-2">According to Bryan Chaffin from The Mac Observer</a>, who says "a lot of people at the top in Silicon Valley consider it a given that Apple is working on a car." And the CEO of Fiat-Chrysler also said <a href="http://uk.businessinsider.com/fiat-ceo-apple-is-planning-an-intervention-in-the-automotive-industry-2015-5">Tim Cook was</a> "interested in an intervention in the car," following a meeting. (It's significant in itself that the CEO met with Cook, as the other two tech companies he met with - Tesla and Google - are both openly and actively involved in cutting edge automotive technology.)</li><li>It gels with executive interests. Speaking at the Re/code tech conference in May, <a href="http://www.businessinsider.com/apple-jeff-williams-the-car-is-the-ultimate-mobile-device-2015-5">Apple executive Jeff Williams said the car was "the ultimate mobile device"</a> in response to a question about what industries the company was exploring. Design chief Jony Ive has been complaining about American cars for years. And the late Apple cofounder and CEO Steve Jobs always wanted to build a car, <a href="http://uk.businessinsider.com/the-court-document-from-a123-v-apple-that-shows-apple-is-building-a-car-battery-2015-5">telling The New York Times before he died</a> "that if he had more energy, he would have liked to take on Detroit with an Apple car."</li></ul> <div class="margin-top"> <h3>NOW WATCH: <a href="http://www.businessinsider.com/iphone-headphones-tips-tricks-apple-2015-7">All the incredibly useful things you didn't know your iPhone headphones could do</a></h3> <div> <div> <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="o2OGM3czpWcydnvhjbkDBd6feXPuExiD" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div> </div> </div> </div>

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