Elon Musk believes that the toughest competition for Tesla in China is where he expects to be second in electric vehicles.
China is the second-largest market for electric vehicles sales in the world in 2022 and the home of Tesla's biggest plant.
It is a market that has embraced EVs and is replete with rivals competing on style and price, including Xpeng, Nio and BYD Co Ltd.
Tesla said on Wednesday that recent deep price cuts were stimulating demand, and that the company is cutting costs in order to grow through what Musk expects will be a recession this year.
Asked about Tesla's competition, Musk responded that he respected the car companies in China, calling it the most competitive market in the world. Musk didn't identify any Chinese automakers by name.
He said that they work the hardest and the smartest. There is probably a company out of China that is the most likely to be second to Tesla. In North America and Europe, Tesla recently promoted China's chief Tom Zhu to run U.S. factories and sales.
Our team is winning in China. I think we are able to attract the best talent in China. In response to growing competition and slowing demand in China, Tesla has cut prices, which has resulted in cuts in the United States and other markets.
Musk has praised Chinese workers and competitors before.
In 2021 he called Chinese automakers the most competitive in the world, saying that some of them are very good at software. He said Chinese workers had been burning the 3 a.m. oil to keep Tesla's factories running during the COVID lockdowns last year.