00:00Let's talk now to David Bailey, Professor of Business Economics at Birmingham Business School.
00:04David, good to see you. Welcome back. Your reaction to these figures?
00:08They're huge. I mean, Tesla is tanking and BYD is absolutely soaring.
00:13In a sense, it's no surprise. We've seen seven consecutive months of Tesla sales down in Europe
00:19on the back of both Musk being very unpopular and a limited product range.
00:23But BYD is really motoring, excuse the pun, on the back of some excellent products.
00:28And the competition has really hotted up for Tesla.
00:31Are Tesla's troubles about the cars or about Elon Musk and what he stands for and what he says?
00:39It's a bit of both. So Musk clearly has, through his affiliation with Trump,
00:44I think damaged the brand and turned off a lot of buyers.
00:47I was in a Tesla showroom last week waiting for some work on my car to be done and it was deserted.
00:53There was hardly anybody there at all.
00:54But also, and this is something we've talked about many times, is that the product range is very narrow.
01:00Just in many countries, the Model 3 and the Model Y, both of which are pretty dated now.
01:06But as you look at Chinese companies like BYD, they are constantly bringing new products to market.
01:12The technology is getting better and they've overtaken Tesla in many ways.
01:16Is Tesla simply too expensive?
01:18I think that's part of the story.
01:22They can't compete with Chinese brands like BYD and NIO and products from Shanghai Automotive in terms of cost.
01:29China has been at this for 25 years.
01:32They've really got costs down.
01:33But it's not just cost.
01:35The technology in some Chinese cars like BYD in terms of the battery, I think, is now superior.
01:41Now, that would be OK if Tesla could sell its cars as a premium offering.
01:47But that's become very difficult when you've got a CEO who is so divisive.
01:52Am I willing to pay a premium now for Tesla?
01:54No.
01:55What's the outlook then for BYD and their road ahead?
02:00That's looking pretty good, I have to say.
02:02They are continuing to innovate very quickly, bring new products to market.
02:06They have excellent expertise in batteries.
02:09Interestingly as well, they don't just focus on purely electric cars, but also hybrids.
02:15So that gives them some flexibility as the market changes.
02:18They're increasingly assembling outside of China.
02:21So, for example, they're now exporting from Thailand into Europe to avoid those tariffs on Chinese products.
02:27And they're expanding into markets around the world.
02:30So they're doing extremely well.
02:32Competition for them as well is hotting up, of course.
02:35But I think they are symbolic of the growth of the Chinese auto industry, its embrace of technology, and how it's becoming a global brand.
02:44Are you able to quantify how damaging those reputational rows have been for the Tesla brand?
02:52Can we put a figure on it or estimate it in some way?
02:56I don't think we can put a figure on it.
02:58But I've seen one analyst refer to the kind of brand destruction from what Musk has done and said as the greatest destruction of brand value in automotive history.
03:09So it's that big.
03:11And it's had a hugely damaging impact.
03:14And we are seeing it, of course, in sales falling in Europe by 40 percent.
03:18David, good to see you.
03:19Thank you for that.
03:20David Bailey, Professor of Business Economics at Birmingham Business School.
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