Analysis suggests Tesla is facing intensifying competition in China.
Mirae Asset Securities made a report after visiting Chinese electric vehicle (EV) and autonomous driving companies like Xiaomi. They observed a rapid replication and expansion of American innovations in China.
The assessment is that while the U.S. excels in breakthrough innovations, China specializes in commercializing and scaling these innovations, much like how DeepSig overcame semiconductor shortages through AI technology and swift execution.
Park Yeon Ju, a researcher at Mirae Asset Securities, concluded that China’s EV manufacturing competitiveness is approaching global standards.
Despite being a newcomer to the EV market, Xiaomi is operating at over 170% production capacity and rapidly improving profitability.
This is attributed to Xiaomi’s unique supply chain management skills and the expansion of China’s supply chain, which has been supplying equipment to Tesla’s factories in China.
Park noted that autonomous driving still presents significant technical challenges, leading to substantial company gaps. Top-tier firms like Huawei have developed Level 2+ autonomous driving capabilities suitable for complex urban environments in China and are advancing quickly.
Since BYD’s announcement popularizing autonomous driving, car manufacturers have noticeably accelerated their investments in this technology. Further technological development and adoption are expected.
In light of these developments, Mirae Asset Securities lowered its target price for Tesla from $394 to $390 (a 1% decrease), downgrading its investment recommendation from Buy to Trading Buy. The evaluation of the robotaxis has increased, considering the high technical barriers and the potential easing regulations in developed countries.
Park suggests that Tesla’s performance may lag in the short term, highlighting the attractive valuations of Chinese competitors. She advises that Tesla focus on FSD license sales, advocate for easing robotaxi regulations, and secure competitiveness in humanoid robot production.
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