00:00Thanks very much. Well, let's talk now to David Bailey, Professor of Business Economics at Birmingham Business School.
00:06Good to see you as always, David. Welcome back. So BYD overtaking Tesla. Is this Tesla doing badly or BYD doing well?
00:14Both, actually. We've been talking about this many times on the program, haven't we? We've been kind of anticipating this.
00:20Tesla running into trouble on the back of a very aged product lineup, Elon Musk's unpopularity,
00:26and the fact that they can't really compete with BYD in terms of their very low costs and their very rapid innovation.
00:33So, you know, it isn't just the low cost story from China. It's the fact that battery innovation is fantastic.
00:39And they've really speeded up the ability to bring to market new cars in a way that's much faster than the Western brand.
00:46So a great success story, I think, for BYD.
00:49Let's pick up on Tesla, though, which has actually ended up having its worst sales year ever.
00:54Also a brand backlash for them. How much has the man at its head, Elon Musk, of course, had an effect on those sales?
01:02It certainly had an effect, I think, because, I mean, partly it's to do with their model lineup getting pretty dated
01:07and their inability to bring a mass market car, a small Tesla to market quickly enough.
01:13But also his political statements, his association with Donald Trump, and also some of the statements he said about West European governments and parties
01:23has really alienated some of the voters.
01:25So there's certainly been a slump in European sales in particular on the back of unpopularity around Elon Musk.
01:33I think there's also been a concern that he spent a lot of time with Trump at the U.S. government
01:38and doing other things like X away from Tesla, and he's kind of taken his focus off the firm as well.
01:46So let's talk about BYD, the U.K., its biggest market outside of China.
01:51Why has it been so successful? It isn't just that competitive pricing.
01:54Well, I think the competitive pricing is a large part of it.
01:58I mean, BYD and other Chinese firms can make a battery electric vehicle at something like 35 to 40 percent lower cost
02:05than their European rivals, so that gives them a massive competitive edge.
02:09But also they've got some great products, good quality products, excellent batteries.
02:13The other thing about the U.K. is that the U.K. has not put in place tariffs, unlike the U.S.
02:19and unlike the European Union.
02:21So companies like BYD are really targeting the U.K. market because they can get into that market very easily
02:28and build brand presence.
02:30And the speed at which they have entered the U.K. market has been really unprecedented.
02:37BYD, Gigli, some of the other Chinese brands as well are really taking very significant market share.
02:43And Chinese companies are likely to top something like 100,000 electric vehicle sales in the U.K. this year.
02:51David, great talking to you as always.
02:53Thanks for coming back on the programme, Professor David Bailey from Birmingham Business School.
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