Tesla Under Siege: Can Elon Musk Conquer Global EV Rivals Like BYD And Rivian?

Forbes

This week on Beyond The Billions, Forbes Deputy Editor Giacomo Tognini and Senior Editor Alan Ohnsman discuss the mind-boggling shifts revolutionizing the electric vehicle sector. Their conversation analyzes the dynamic challenges facing the EV space, which now resembles tech startups more than traditional car manufacturing, particularly as US government subsidies expire and strong domestic and international rivals like Rivian and BYD emerge. They also examine the impact of Elon Musk's personal actions on the Tesla brand and the implications for his trillion-dollar pay package—which is tied to company milestones—in a world where, with Elon, "anything can happen any week let alone five years."  00:00 This Week’s Billionaires Recap 02:41 The Mind-Boggling Shift: When EVs Became Tech Startups 08:44 How China Built A New EV Empire 14:31 When Subsidies End: The Pain Of Losing Government Credits 15:14 Driving Down The Brand: Elon's Personal Actions And The Fallout 18:54 Tesla’s Trillion-Dollar Pay Package For Elon  26:46 How BYD Became The World's Top EV Maker 33:16 The US Rival Whose Future Rests On A Single Car  To read more about Tesla’s shift away from its core EV mission: https://www.forbes.com/sites/alanohnsman/2025/11/10/teslas-engineering-exodus-comes-amid-shift-from-core-ev-mission/ To read more about Elon Musk’s $1 trillion pay package: https://www.forbes.com/sites/alanohnsman/2025/11/05/elon-musks-1-trillion-pay-plan-the-case-for-magical-thinking/ To read more about RJ Scaringe’s bet that Rivian’s new electric SUV will help make it the next Tesla: https://www.forbes.com/sites/alanohnsman/2025/10/20/rj-scaringe-is-betting-his-new-electric-suv-will-make-rivian-the-next-tesla/ To read more about billionaire reactions to Zohran Mamdani’s victory: https://www.forbes.com/sites/siladityaray/2025/11/05/billionaires-react-to-mamdanis-win-you-have-a-big-responsibility/ To read more about billionaire John Catsimatidis’ reaction to Zohran Mamdani’s victory: https://www.forbes.com/sites/martinadilicosa/2025/11/07/supermarket-billionaire-john-catsimatidis-threatens-to-cut-workforce-move-to-florida-after-mamdanis-win/ To read more about Donald Trump’s nomination of Jared Isaacman as NASA administrator: https://www.forbes.com/sites/the-prototype/2025/11/08/trump-nominated-billionaire-jared-isaacman-to-run-nasa-again/ To read more about Nvidia losing two billionaires amid its stock selloff: https://www.forbes.com/sites/emilygarcia/2025/11/11/nvidia-loses-2-billionaires-amid-softbank-led-selloff/  Subscribe to FORBES: https://www.youtube.com/user/Forbes?sub_confirmation=1  Fuel your success with Forbes. Gain unlimited access to premium journalism, including breaking news, groundbreaking in-depth reported stories, daily digests and more. Plus, members get a front-row seat at members-only events with leading thinkers and doers, access to premium video that can help you get ahead, an ad-light experience, early access to select products including NFT drops and mo

Transcript

00:00This week in Billionaires, Zoran Mamdani won a resounding victory in New York City's mayoral

00:04election, sparking reactions from some of the city's wealthiest people. Supermarket billionaire

00:10and Trump donor John Katsimatidis told Forbes that he plans to cut his workforce and move his

00:15business to New Jersey in response to Mamdani's win, while JPMorgan Chase CEO Jamie Dimon and

00:22hedge funder Bill Ackman, who had backed Mamdani's opponent Andrew Cuomo, both extended a hand to

00:27the new mayor. President Donald Trump re-nominated payments billionaire Jared Isaacman to the post

00:32of NASA Administrator. Trump had initially nominated Isaacman for the job in January before withdrawing

00:38it in May. Isaacman, worth an estimated $1.3 billion thanks to his shares in payment processing firm

00:45Shift4 Payments, has made two trips to space before on rockets made by Elon Musk's SpaceX. His latest

00:51was in September 2024, when he became the first private citizen ever to conduct a spacewalk.

00:57His firm Shift4 also owns a stake in SpaceX. Nvidia's shares fell by 3% on Tuesday, after

01:03Japanese tech giant SoftBank disclosed that it had sold its $5.8 billion stake in the company

01:09in October. The drop wiped more than $150 billion off of Nvidia's market capitalization,

01:15part of a $300 billion drop since the stock hit a high of $207 per share on October 29th.

01:22That's also led to two of Nvidia's seven billionaires at the time, Executive Vice President Jay Puri

01:27and venture investor Brooke Sewell, to fall from the billionaire ranks.

01:32Welcome to Beyond the Billions. I'm Giacomo Giannini. And joining me today is Alan Onsman, a senior

01:37editor here at Forbes. Alan, so great to have you here today. And you've been covering Tesla

01:43and Elon for so many years now. But does Elon still respond to your emails or phone calls or

01:49are those days behind you? No, that ended a long time ago. Good to be with you, Giacomo.

01:54Yeah, my experience with him goes back to 2006. And up until about 2016, 2017, we were still in pretty

02:04regular communication, but really not since then. You know, I texted email him and like most reporters,

02:12there is only silence. I think if you want to communicate with him, you go on to Twitter or X

02:18rather and, you know, send him something directly. I'm not terribly comfortable doing that, frankly.

02:26I, you know, when you're working on a story, when you're reporting it out, I have, you know,

02:31some hesitation to put out there to the world exactly what I'm working on and trying to get

02:37him to comment on it. Well, you know, you've been covering the EV industry for so many years now,

02:45and it's gone through so many different shifts, right? I guess if you're looking now sort of

02:49backwards, what have been sort of the biggest sort of mind-boggling shifts or things that have

02:54really changed the industry? I know it's a big question, but what sort of comes to mind?

02:58Oh, no, it's a great one. When I started covering the space, it was for Bloomberg in 2001,

03:08when they moved me to Los Angeles. And that was in the dying days of what was called the

03:14California ZEV program, zero emission vehicle program, where we saw these really pretty terrible

03:20EVs in the late 90s that came out. You know, they were running on nickel metal hydride batteries.

03:31Lithium ion wasn't really even a thing at that point. Range was terrible, 50 to 60 miles.

03:36And it was a, you know, it was quite an effort, but it was really a failed experiment.

03:42And so those cars kind of began to disappear. And then around 2005, 2006, there were rumors of this

03:49new company that had something in the works that was going to be quite different. And that turned out

03:55to be Tesla. And Tesla, you know, for whatever anyone thinks about Elon Musk today, the impact that

04:03company had is remarkable. We would not have the modern EV industry were it not for Tesla. And

04:11the big thing that they did that was kind of shocking and seemed ridiculous at the time

04:17was taking off the shelf laptop battery cells, commodity battery cells, packaging them together,

04:23making this enormous battery pack, and putting inside a Lotus, a modified Lotus Elise sports car,

04:29and having a couple hundred miles of range. And the thing was crazy fast. It seemed ridiculous at the

04:36time because I was writing about big automakers, Toyota and Honda and Hyundai in particular. And every

04:44automaker, every engineer would tell you that's no way to do an electric car. You have to have a special

04:49battery. It has to be a giant cell. But these things cost a fortune. So this will never work. And that idea

04:57that Tesla came up with did not come from Elon Musk had, you know, it was not Elon's idea. It came from

05:03Martin Eberhard and the other original founders of the company that are forgotten to history for the

05:08most part. And Martin came out of the disk drive industry. And I remember him telling me once when

05:15I said to him, this seems ridiculous that you have thousands of individual cells in the battery pack

05:21because that's six or 7,000 failure points. If one goes bad, if you get thermal runaway when they

05:26overheat and they start to burn, the whole pack goes bad. And he said, well, on your computer,

05:32you have a hard disk drive. Do you know how often you experience hard disk drive failures when you

05:38have total shutdown? And I said, I've never had total shutdown. He said, that's right, because there's

05:43all of this extra bandwidth that you never use. And so this idea that you could make a battery pack with

05:49all of these thousands of individual cells to give a pretty substantial amount of EV range that was

05:55unimaginable. Because again, the best EVs from a few years earlier could only go 50, 60 miles, not

06:01even 100 miles. Tesla says we're going to do 200 plus with their first car. So that was really like,

06:07intellectually, that was a game changer. And it seemed like a dumb idea. And in fact, it's exactly

06:14where the entire industry went. So everyone followed and began doing a similar approach where

06:20you no longer needed a specialized battery. Initially, you could you could use commodity

06:26cells, put them together and do this. And so that idea was was enormous. And it took a while to sort of

06:31catch on. And then fast forward from 2008, when the Roadster came out to 2012, when the Model S

06:41went into production, it was next level. It was so much more sophisticated in terms of the packaging,

06:50the design, the range, everything. No one had ever conceived of anything quite that sophisticated

06:55before. And I don't think there's nothing that's been as impactful since the 2012 Model S,

07:01the appearance of it, it didn't sell in huge numbers, it cost 90 $100,000. But just what it did and showed

07:08what you could do with this technology was a huge game changer. And then you fast forward several

07:13more years to the Model S, which was a more affordable or sorry, excuse me, the Model 3,

07:20a more affordable mass market EV that Elon kept claiming would sell for $35,000. It didn't,

07:26it was 45 to 50. One of many claims that's turned out to be, yeah. Famously, no Tesla model ever in

07:34the history of the company has actually sold for the price he said it would. It just, so whatever,

07:39you know, price he claims, it's not going to be that price. And then the Model Y, which came right

07:45around the time of COVID. And the Model Y was interesting because it didn't seem that extraordinarily

07:51different from the Model 3. It visually looks kind of the same, the same design language. And yet it's

07:56gone on to just be a monster seller. It has been the world's best selling individual vehicle of any

08:02type, I think in both 2024 and maybe 2025. So that when you, when you think about things that really

08:09have sort of defined the space, you can take nothing, you know, you can't take away from Tesla,

08:14the impact the company has had. And that then spurred everyone else across the world, frankly,

08:21in the industry to, to get in the game. The US domestics have, have begun doing more products,

08:27the Koreans, the Japanese, but really it's China. And China, more than any market looked at what Tesla

08:34was doing and learned from it and has now surpassed it, frankly. The key to Tesla's profitability was

08:42when they opened their Shanghai plant. And at the time, for those of us who've been covering the space

08:48for a long time, it was shocking because China allowed Tesla to wholly own its Chinese operation.

08:54No other company was ever granted that, that, that, that freedom.

08:57And across industries, right? It's very rare in general, right?

09:01Yeah, absolutely. China requires any foreign manufacturer tech company to have a domestic

09:07partner that owns 50.1% in the partnership. So you have a majority local partner. Tesla was given

09:16freedom to outright own its operation in Shanghai. Unbelievable. And it got generous,

09:24local funding from the banks of Shanghai and, you know, government funds. So it got assistance

09:29from the government in terms of financing that plant. And, and it was allowed to own it outright.

09:34And it turned out to be a money machine. That thing opened up in 2020, again, right in the height of

09:39COVID, which didn't seem like the best timing, but it completely, it was like flipping a switch on Tesla,

09:44which had been mostly unprofitable between 2010 when it went public up until about 2020. So almost

09:52a decade of unprofitability. And then suddenly here comes China. So you have lower cost manufacturing,

09:59lower supply, cheaper supplies, domestic supplies, lower labor costs, and a booming market. And

10:07everything just went bananas. And so Tesla suddenly becomes fabulously profitable at that point. And you

10:15think, gosh, that's really fascinating that China, you know, why did China do this? And it turns out that

10:20China had, you know, a plan in mind, there were was an ulterior motive. And I think an analyst I've talked

10:27to over the years has called it the catfish effect, where you basically introduce a competitive element,

10:34a rival of some sort into the local pond, and all the other fish have to get a lot tougher real fast.

10:40And it worked amazingly well, it was a brilliant strategy. So since Tesla has been in China,

10:47you've seen the rise of some really high powered domestic competitors, BYD at the top of the list,

10:53but Xiaomi and Xpeng and NIO and all of these companies that have really fascinating, compelling

10:59electric vehicles that are produced within China, that really did sort of observe and see what Tesla

11:04was doing, aped it and now have probably surpassed Tesla technologically at this point, because the

11:11Chinese now set the standard for battery tech and in-car tech in electric vehicles. It is remarkable.

11:19We don't see any of that in the United States because we have such a high tariff wall, that

11:24barrier that keeps the Chinese out. But the world is now very well aware of what the Chinese are doing

11:29across Europe and South America and Australia and Southeast Asia and every major market is getting

11:36the Chinese EV. So we are in a big transition point now where Tesla, which kickstarted this market,

11:42had, you know, real first mover status, things are rapidly changing. And so in a nutshell, that's kind

11:50of a, that's a, you know, the last 20 plus years of what's been going on in the EV space. That's it.

11:57And I guess to some of the points you were talking about, it seems like the, the developments in the

12:02EV space have been more akin to sort of, you know, tech startups and that kind of boom, as opposed to

12:10the traditional automakers, right, which as we were saying before, took many years to develop new

12:15products. This has been a much more dynamic industry, right? Absolutely. Yeah. Yeah, that's, that,

12:22that's true. In the U.S. there are very few pure EV makers. We have Tesla, Lucid and Rivian for the

12:29most part. General Motors, Ford, Chrysler, Stellantis, they have other business lines to lean on. So, you know,

12:39Americans like big SUVs, Americans like big pickup trucks, they sell millions and millions of those

12:45types of vehicles. So, you know, EVs are still a new market in the United States and growing. I mean,

12:52there are more than half of sales in China now. There are about 70% of new vehicle sales in markets

12:56like Norway, but in the United States, it's going to end up below 10% this year of the market. So our

13:02market is still dominated by traditional gasoline powered, mostly SUVs and pickup trucks.

13:08So as a result of that, the traditional industrial heavyweights in the U.S. automotive

13:15market don't have the same pressure to move as fast. And of course, now with the, under the Trump

13:21administration, with the elimination of a lot of federal programs encouraging EVs, especially the

13:28consumer tax credit, $7,500 tax credit to purchase one, they're less aggressive at the moment,

13:37because they can be. They can lean into these other business lines and, you know, they may lose a

13:43little bit on what they invested in battery plants and new assembly lines, but they can make it up in,

13:48in, you know, in, in truck sales. Tesla doesn't have that luxury. Rivian doesn't have that luxury,

13:54nor does, does, does Lucid. So they have to be, you know, they're all in on those products and they are

13:59coming from a much more tech focused perspective that is closer to a tech company. Rivian or,

14:08excuse me, Lucid probably a bit less so. Lucid sort of has elements that are closer to like a

14:13Mercedes Benz or a BMW luxury company. But Tesla and Rivian are pretty much, they live or die by the

14:20quality of their, their, their tech. I mean, that's another challenge you just brought up for,

14:25for Tesla and the other players in the US, right? The lapsing of the, or the elimination of these

14:30subsidies. You talked about, you know, for Tesla now kind of losing ground in China, right? Against

14:36the local competitors. That's obviously, as we all know, Elon was heavily involved in the government

14:41earlier this year with Doge. And, you know, he's since scaled back his involvement there in part,

14:48right? Due to concerns from Tesla shareholders. How do you think that has impacted Tesla's standing,

14:54you know, as an additional challenge facing the company? Well, you know, I was just looking,

15:00I missed this last month in October, but, you know, Interbrand, which does its annual survey

15:07of brand value and, and, and what are the hot rising brands and, you know, what are the shifts

15:12there? Um, Tesla, uh, had the largest drop, uh, in, in brand value, uh, in the past year. And that's 100%

15:24Elon Musk, uh, related. Um, as he has grown politically very outspoken and more controversial

15:32and weighing in on social issues and things like that, supporting far-right politicians in Europe,

15:37that has real damage. Um, and you don't see it right away. Um, you know, there was a spike when he

15:45was running Doge where you had protests and people setting Tesla's on fire and, and doing things. So

15:50there was a bit of a, of a spike in, in a real pushback that's eased up a little bit because he's

15:56just not quite in the news cycle to the extent he was where you were seeing him daily or weekly

16:01in, uh, oval office briefings and, and, and saying ridiculous things or giving Hitler salutes. I mean,

16:07you know, those aren't really positive for a brand. Um, and, and, and we don't have a precedent for

16:13this. I mean, rack your brain, but think of a CEO, uh, who did this, who took such very public,

16:21uh, uh, political positions and was even, you know, part of an administration for a time.

16:26Um, you know, there have certainly been executives that are cycled in and out of,

16:30of, of administrations, but there's just no real comparison to someone who, who was willing to do

16:35this. And, and it raised these huge questions. And this has been an ongoing issue with Tesla's board.

16:39Why, why do they permit this? And why do they not make an effort to put some restraints in? And at

16:45this point, um, it seems like it, it's like a suicide pact. It's like, this is, this is what's

16:52happening and, and we're just going to stand with it. We can't change them. We can't stop. And we're

16:56just going to live with it. So there has been this corrosion to the, to the brand. Uh, and again,

17:02Tesla still ranks among the top 50 global brands, but it dropped about 35% in value. It had the most

17:10precipitous, uh, decline, uh, year over year, um, in brand value. And if things continue as they are,

17:18it's, it's going to get a lot worse. It has funneled through to sales. Uh, Tesla's, you know,

17:23you mentioned China, Tesla's sales are down in China, but it's not because of how people view

17:28Elon, the Chinese don't care really about Elon. They generally like him. I mean, billionaires

17:33and entrepreneurs are, are generally popular in China. Um, the issue there is just better,

17:37cheaper, local competition, more affordable EVs and cooler stuff from rivals. Europe is where

17:43you're seeing the real turn where the European market has completely soured on, on, on Tesla this

17:49year. And it's entirely because of him. Um, he's, you know, backed right wing German political leaders

17:55and, and, you know, lobbied for things that, that are, you know, people just don't find appropriate

17:59in that market. So, um, the biggest, uh, effect we're seeing is, is certainly across Europe and

18:05here in, I'm in Los Angeles, I'm in California. Um, definitely, you know, California, which is the

18:10key market for EVs in this country. Um, Tesla has fallen precipitously. It's about down about 20%

18:15year to date in the California market. And the only thing you can look at is like, yeah, that's,

18:20that's Elon. People don't want to be associated with the brand because of him. Um,

18:24and, and, you know, I've been doing this a long time. I've never seen a company and a CEO who was

18:30in a public company and CEO so willing to just, you know, uh, piss off, you know, at least half your,

18:36your buyer base, if not more, because survey after survey shows, you know, who buys EVs

18:41in the United States, it tends to be people not on the far, right. Um, it, you know, moderate to,

18:47to, to liberal, uh, political, uh, consumer. So, um, that's a very risky thing. Um, clearly,

18:53it does not trouble, uh, Tesla's board. Uh, and as we see, uh, last week, um, the board

19:00advocated a $1 trillion pay package for him over a decade and, uh, 75% of shareholders said that's

19:07fine by us. Uh, we're, we're totally cool with that. Um, so they accept Elon warts and all at this

19:12point. Um, the fact that he's diverted, uh, his, you know, doing multiple things, running six companies,

19:17supposedly simultaneously, they don't seem troubled by that. Um, the fact that their sales are in

19:23decline does not seem to trouble anyone. So, um, it, it is, it's interesting, uh, that you are really

19:30seeing, um, his behavior, but then the fact that the board of directors is completely comfortable with

19:36it, uh, is, is, is, you know, it's fascinating. Right. And that, that $1 trillion pay package is

19:42tied to certain milestones. Right. Yeah. Which, I mean, he's, he's, I think often made the argument

19:47that he needs a bigger personal stake in Tesla for him to care about it. Right. More so than his

19:53other companies. Yeah. But when it's his personal actions kind of driving down the brand, I mean,

19:58how do you, obviously it's far into the future now and with Elon, anything can happen any week,

20:02let alone five years, but do, do analysts or do investors think that those milestones are feasible

20:09for them to reach in the, uh, yeah, it's, it's a mixed bag. Number one, I, to, to, to his point

20:16about, he needs to have 25% ownership stake in, in Tesla. He needs to have that. The obvious question

20:22is really, what would be different? What would be different? You already have a board that lets you do

20:29anything that you want. And he could, he could today just buy more Tesla shares if he wants to have

20:36more, nothing prevents him from doing that. So it, it doesn't really hold water as an argument

20:41that, that he must have 25%. Um, it, it, it gains him nothing except wealth. There, there's no,

20:48there's no added advantage. He, he has whatever he wants in terms of the individual targets. It is

20:54a mixed bag. You know, Tesla has to get up to market cap of like 8.5 trillion. Um, and it's,

21:00it's about one point. I, I didn't look at it at the moment, but it's, you know, in the ballpark of 1.5,

21:041.6, um, currently, uh, over a decade, could that happen? Sure. Absolutely could. Um, cumulative

21:12EV sales of 20 million is kind of a joke. When you look at the targets in there up until two years

21:18ago, he was claiming Tesla would sell 20 million EVs a year. Now it's 20 million over a 10 year period.

21:28That's a ridiculously easy target because their cumulative, uh, EV sales this year will end up at

21:33about 9 million and change. And so that means they have to do just like 11 million additional

21:38sales over the course of a decade. And, uh, although they were supposed to be averaging 2

21:43million a year, uh, they're now down below that to, um, you know, one point they'll finish the year

21:49about 1.5, 1.6 million this year. Um, so that, you know, getting to 20 million cumulative EV sales is,

21:56is ridiculously unchallenging. So that that's not a good target. Um, some of the others are things like,

22:02uh, a million active, uh, uh, full self-driving subscriptions, um, probably very doable. Um,

22:12they don't give, they don't actually currently release how many, uh, subscribers they have to,

22:18uh, full self-driving, um, their so-called autonomous, uh, driving software, uh, feature,

22:24which is currently under investigation by the national highway traffic.

22:27Which you cover a lot over the, yeah, because it's, it's, it's, uh, you know, as far as truth

22:32and advertising goes, I, I cannot point to a, a worse name for a product. Um, it is a terrifyingly

22:40bad system in my personal opinion and my experience with it. Uh, but perhaps it will get better.

22:45Anyway, at some point, you know, can they get a million subscribers to FSD? Probably over the course

22:51of a decade. Sure. Uh, a million bots. And this is what confuses me because in the language, it doesn't

22:58say one million Optimus robots, his new pet project and biggest love is, is the Optimus robot, the

23:06humanoid robot. Um, it says a million bots. So I'm not sure what that means because he actually

23:12sometimes says the cars themselves are bots, right? That the, you know, an autonomous Tesla and, and,

23:19and, and, and Optimus are really basically the same thing. I would say, no, they're not.

23:24That's not really accurate at all. But, um, so there are some fuzzy things in there. Uh, one, uh,

23:31Tesla investor who was once a massive, you know, fan boy and, and has now become a very hard critic.

23:36Um, what he pointed out is in Tesla's or in Elon's previous pay package, his 2018 package,

23:42the financial targets, uh, were actually much more rigorous. They were more specific.

23:47These seem a lot fuzzier, uh, and easier to hit. And so there is an element of vagueness,

23:53uh, to the new stock award package that I think, you know, that's true. You know, whether anyone

24:01is, is worth a trillion dollars, or if you do the math on it, that's $275 million a day for 10 years.

24:08Um, it's just, you know, the, the, the number is so high that it becomes meaningless. Uh, as,

24:16as with, you know, his, his direct ownership stake in the company, he's at about 13% today. He,

24:22he says, I must have 25% to maintain control. It, it functionally makes no difference. Uh,

24:28he already has full control of the company. He's today worth five or $600 billion.

24:32Right. I think he was the first person to ever hit 500 billion a few weeks ago.

24:38So if you're already worth that much, you know, which none of us can actually, it's,

24:44it's just unimaginable amount of wealth already toss in a trillion dollars. What, you know,

24:49what does that mean? You can buy like small countries and stuff. I mean, it's just, it just,

24:54I don't know. It's really completely hard to wrap your mind around, uh, something like that. Um,

25:01and at the same time, you know, we should point out, we work for, for, for, um, for Forbes and,

25:05and we write about billionaires and we write about things like philanthropy, uh, the wealthiest person

25:10in the world, not much of a philanthropist, uh, he's giving, he's, you know, he doesn't rank. I

25:15think when, when we put together our, our annual giving reports. Yeah. He's not on the top givers list.

25:21Yeah. Sure isn't. Yeah. No. So, um, you know, what is that all about? The fact that he wants more and more,

25:29uh, wealth and, and, and wants to just sit on it. So, you know, it's, it, it is what it is,

25:34but in terms of his ability to actually achieve all of the performance targets, uh, set out over

25:41the next decade, honestly, at this point, it's like, sure, probably they'll happen. Um, I, I think

25:49when it, when the 2018 package came out, it, it looked kind of shocking and that it was estimated

25:55to be worth like $55 billion over, over several years. And, and that seemed outrageous at the time.

26:01And, and, and the company remains in, um, in court over it. Uh, I, I would point out with this

26:08additional, the new package, uh, it's a matter of time, I think before the legal challenges,

26:13uh, shareholder challenges, uh, arise and say, this is ridiculous. Um, this, this is just not justified.

26:20So I, I assume, uh, it's going to end up in court too. And I think that's more than the performance

26:25targets themselves. I think, um, the, the, the legality of it, whether, whether the courts and,

26:30and, and shareholder lawsuits, uh, determine that it's, it's inappropriate. Um, uh, you know,

26:36that's probably the bigger issue over time.

26:38I guess moving back to the pushback you're mentioning before that they've had a huge

26:44sort of impact in Europe, right? And in Europe, consumers do have many other choices,

26:48right? Compared to the U S when it comes to EVs and correct me if I'm wrong here,

26:52but I believe BYD, right, is kind of the largest of the competitors. So if you could,

26:56I guess you mentioned earlier how they were one of these local Chinese companies that came up kind of

27:03in the sort of, uh, footsteps of Tesla, you know, what, how much do we know about its founder and

27:09sort of its story and how it's, it's grown to, to where it is now?

27:12Well, I, that remains one of the most interesting stories, uh, in the industry, um, in 2009,

27:20eight, 2009, I was at the Detroit auto show when BYD had, uh, a couple of their, um, early, uh, models on

27:28display and they did not look good. There was nothing impressive about them. And I, I can remember

27:35when, when, uh, Berkshire Hathaway invested in BYD, uh, many, many years ago, 20 plus years ago. Um,

27:43it, it, as a battery maker, because that's how BYD began. It was primarily, you know, BYD build your

27:48dreams, but it, it, it began as a, as a maker of, uh, batteries for cell phones and other things.

27:54Um, it looked like a bad investment, uh, by Warren Buffett, um, and Charlie Munger,

28:01uh, because the tech did not look good. Um, BYD special, their specialty was LFP batteries,

28:07lithium iron phosphate, lithium iron phosphate, especially 20 years ago, um, was a really

28:13heavy battery pack and not very energy dense. It did not have the same energy density of a lithium

28:20ion battery. Um, and that's, that, that's critical for something like an automobile because

28:25weight is everything. If your car is really heavy, uh, that's a problem. Um, so you're always trying

28:31to reduce weight. So on a weight basis, an LFP cell was far less efficient, even though it was cheaper

28:38than a lithium ion cell. And, and so BYD, I don't think anyone took them very seriously. They set up

28:43their headquarters here in Los Angeles, uh, for, for the Americas, uh, and they were doing buses and they

28:49have a, they have a bus factory even today, uh, about an hour north of, of, of Los Angeles. Um,

28:55their buses did not have a great reputation, so it didn't seem like great tech. It did not look that

29:00impressive. Um, but what we have seen with the Chinese over the last 20 years is this incredible

29:05ability to focus and, and, and just iterate and, and keep getting better and better and better and

29:10better. And now, you know, not only does BYD have terrific designs, but their LFP battery, uh,

29:17chemistry, uh, is one of the hot chemistries in, in, in, in the market. General Motors, uh, Ford,

29:23other companies are partnering with, um, uh, South Korea's LG to do their own, uh, LFP battery

29:31production lines here in the United States. Tesla also has adopted LFP and is using LFP cells for its,

29:37um, stationary energy storage units. So, uh, it, it is remarkable, just like when we laughed at, at

29:45Tesla using 6,000 laptop cells in its early iteration, like that'll never work. Um, the

29:51same thing with BYD with this, this LFP chemistry, that's like, no, no, everybody knows this is dumb.

29:57It's, it's, it's, it's too heavy. It's not energy dense. It's not going to work. Um,

30:02fast forward to today, it works great. Uh, and, and, and BYD has done all sorts of remarkable things.

30:08Um, they have, you know, a super rapid charging system that is unlike anything we have in the United

30:13States where you can repower your, your, your EV in minutes. Um, and, and, you know, China has just

30:19become remarkable. The, the, the pace of sophistication is, you know, they are really

30:24setting the pace globally at this point. And, and that, so that's a real challenge for everyone,

30:28but BYD does other things. I mean, they make monorails and, um, uh, solar panels. And so it's,

30:34it's a really fascinating company, but it all started with, uh, with batteries and, uh, Wang Changfu,

30:40the, the, the chairman and founder, um, is a battery chemist. That's, you know, he's, uh,

30:46he's the opposite of Elon. I I've talked to him a couple of times, not recently, but, um,

30:50in the early days I had, uh, access to him and I met him once at their Lancaster,

30:54California bus plant. He's very low key. He's not, he's the complete opposite of Elon. He doesn't

31:01say anything bombastic. Uh, he's very, uh, mild, uh, mannered. Um, uh, there, uh,

31:07their real interesting executive is Stella Lee, who ran the U S operations. And she's kind of like

31:13the, she's become sort of the face of the company internationally as they expand into Europe and

31:18South America and other places, you'll always see Stella there, uh, when they're opening up

31:22something new. And so she's, she's, um, pretty interesting. And, uh, I think last year or early

31:27this year, I guess I, I made a list of who could replace Elon at, at Tesla. If you want Elon were to

31:33leave, you know, here are five people that could do the job. Stella's at the top of the list. I'd say,

31:36if you know, you know, Stella would be a really interesting, uh, future Tesla CEO,

31:41if she were willing to leave, uh, BYD. Uh, but at this point, I don't know why she would,

31:46because BYD has passed Tesla to now become, uh, the world's largest, um, EV maker. Uh,

31:52they've already been bigger than Tesla for a while, but they do, uh, both, uh, plug-in hybrids and high

31:58and full, uh, EVs. And Tesla of course only does full EV, but that strategy has worked out great for

32:04BYD because it allowed them to get into Europe. Um, if, if they sell a direct, uh, just pure EV

32:11in Europe, the tariff is extremely high, but if they sell a plug-in higher hybrid in Europe, they

32:16avoid this really high tariff. And so they've really been flooding Europe with some very affordable,

32:22uh, long range plug-in hybrids that might get you 60 to a hundred miles of all battery range.

32:28And for most people, if you think, well, wait, how much do I drive every day? 20 miles. Plug-in

32:34works great. Uh, it's got a gasoline engine, but I don't need to bother with the gasoline engine. I

32:38plug it into my garage and I'm all charged up and, and, and all of my driving is covered. So

32:43that's strategically something a little different, uh, than, than, than, than what Tesla does. And,

32:47and Tesla will never do that. Um, but all of this, you know, especially because of the success of BYD

32:52is what is really, I think, underpinning the big, uh, shift strategy shift that, um,

32:58Musk is making, uh, Tesla right now, where he's really kind of pulling back a bit on the EV side

33:05of things and, and looking to, Hey, we're an AI company. We're doing it. We're going to do robots

33:09and robo taxis. And so don't think of us as a car maker anymore. Right. And then if we look back at

33:16the U S right, um, just, I wanted to briefly ask you about, uh, you know, I remember in 2020,

33:232021, there were all these SPACs, some of which I think were, you know, with, uh, EVs like Fisker,

33:30um, I think Lordstown Motors, but it's sort of, it seems like the most prominent competitor,

33:35you know, mentioned Lucid, but the one that you've written more about, you know, and, and the

33:39founders on our billionaires list was RJ Scarange and, uh, Rivian. And you did this great story,

33:45I think a few weeks ago, looking at how he now has this new sort of mass market, um,

33:53car and the future of the company. And I guess his fortune kind of really rests on, on this car,

33:59right? So just wanted to, you know, I guess if you could unpack that a little bit and how,

34:06you know, how much, how, how likely that really is, I guess. Um, that's going to be one of the big

34:11stories I think of, of 2026, because that, that product has to be right, you know, because

34:17everything is riding on it. Um, Rivian's done very well. If Rivian, uh, despite, you know,

34:23a lot of setbacks, if they had launched about two years earlier, they probably would be much further

34:29along at this point, but they, they began production essentially right when COVID hit.

34:34And they just got hammered, uh, by everything, uh, when we saw, you know, in part shortages and,

34:42uh, inflation that all resulted, you know, as a result of, of, of COVID, uh, that, that just screwed

34:49up things. And so timing was, ended up being really bad for Rivian. But RJ, uh, Scaringe is, is an

34:56interesting person because, um, you know, he is, he's got a PhD in mechanical engineering from MIT.

35:02He's been for 20, last 20 years, like planning and envisioning this, these products that he wants

35:10to make. He was deeply inspired by Tesla. Uh, the first time I interviewed him was probably 2017

35:15when they were coming out of stealth and, and, you know, he made no bones about the fact that it's

35:19like, yes, I mean, what, what Tesla has done, we want to, we want to follow that example and we want

35:24to take it further. And he targeted the biggest market in the United States, which is pickup trucks.

35:31The U S is the world's biggest market for full size pickups. In fact, it's like one of the only

35:35markets for full size pickup trucks. That is the heart of the market. And so he started with the

35:40highest volume product in the United States, a pickup truck, the R one. Um, it's, it's kind of a

35:45cool vehicle, but it's expensive. It's, it's, it's like a 90,000 to a hundred thousand dollar vehicle.

35:51And then he added a large SUV off the same platform, the, uh, the R R one S. Um, and, uh,

35:58it's still also like an $80,000 vehicle. So the products are fine, but there's not a lot of volume

36:05at that price point. Um, and you know, Rivian's got a lot to live up to because this is the, by far,

36:11the best funded automotive startup, I think ever, um, they had raised so many billions before their

36:17IPO. Uh, and then they went public. And so they've just raised an enormous amount of money, uh, up until

36:25even, you know, last year when they, they did a big deal with Volkswagen to supply software and tech to

36:30Volkswagen. Um, Amazon has backed them. Ford has backed them. They've had like, you know, all these

36:34major top tier, uh, supporters, um, you know, Amazon, they also make these delivery bands for,

36:41for Amazon, uh, which I see a lot of out here. Um, I don't know overall that the volume has been as

36:47high as they had hoped of that. So they've, their initial phase has been very promising, but there's no

36:53volume in that. Uh, you know, Lucid is specializing in very expensive premium vehicles and they don't

37:01at this point have the volume aspirations to be a mass market company. Rivian does.

37:06So coming up soon, uh, they're in pre-production now is the R2, which is going to be about a $45,000

37:13SUV. And that's right at the heart of the market because, um, you know, U S buys a ridiculous amount

37:20of crossovers and SUVs, uh, and $45,000 is not an unusually expensive price point for that. Um, so,

37:27you know, if they're coming out with something that'll be 30 to $40,000 cheaper, uh,

37:31than their current product. Um, I don't know how much lower below that they can get. I mean,

37:36the closer they can get to 40 or sub 40, so much the better. Um, but in terms of volume,

37:43they're really anticipating a major shift, uh, with the arrival of the R2, um, that's probably

37:49going to be out in the first quarter of, of next year. So it's, it's, it's really important,

37:55but they're doing what Tesla did because Tesla started with extremely expensive models and then

37:59worked its way down to the mass market. Rivian is doing the same thing, but the market's not

38:04as patient now. Um, you know, Tesla had a decade to get to profitability. Uh, Rivian went public in

38:092021, 2020. Uh, and, uh, you know, it's 2025, the year's almost over. Um, their margins looked

38:17a little better for the last quarter, but they're not profitable yet. They're probably still two or three

38:21years away from, from pure profitability. Um, and if they get there, it's going to be the R2.

38:26Um, so they really, you know, investors have been somewhat patient, but again, this is,

38:31you talked about the SPAC boom, uh, the SPAC bubble actually during, during COVID. Um, you know,

38:37we've seen Rivian go from 150 bucks a share to about a 10th of that. Currently they're about

38:4160, 70 years. I remember when he was a newcomer to the billionaires list, right? Thanks to that.

38:45That's right. That's right. And it was entirely because of that. Cause we had that

38:48hyperinflated market at that time. Alan, uh, I always learn so much talking to you. Um,

38:54but before I let you go, I did want to ask you, what car do you drive? Is it an EV?

38:59Uh, a, uh, a plug-in Prius hybrid that gets 40 miles all electric and, and it basically functions

39:06as a, as an EV. Uh, if you need to go farther, there's a, there's a gas tank that kicks in, but, uh,

39:11yeah, I always like to say I'm, when it comes to cars, I'm, I'm, I'm, I'm Mr. Spock. It's,

39:17it's, it's all logic and no passion or emotion. That's good. Good traits to have as a reporter

39:22too. Um, well, thank you so much, Alan. Um, thanks for coming on today. Great to chat.

39:28You can find Alan's stories and the other stories we talked about in today's episode in the show notes.

39:48Bye.

39:52Uh,

39:57uh.

39:59Uh,

39:59uh.

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