Chinese companies challenge the dominance of Tesla and Apple

Apple and TeslaThey are two companies that investors follow a lot around the world. It reduced its share in the global market Towards the end of 2023 of competition arising from China.

Regarding Apple, the iPhone saw its share of the global smartphone market decline in November, particularly affected by growing competition in China, according to new data from research group Counterpoint. all over the world, Hardware market share decreased by 50 basis points (YoY) And 300 basis points compared to October, amounting to 20.8%. In China, the share of this advanced device decreased to 21.3%, a decrease of 320 basis points.

In addition, Tesla It ended 2023 with a record fourth quarter, with 494,989 electric vehicles delivered, but… It has been unable to maintain its position as a leading electric vehicle manufacturer, overtaking China's BYD. Despite achieving an impressive annual production of 1.85 million units, Tesla fell short of CEO Elon Musk's goal of 2 million units. By comparison, BYD, backed by support from Warren Buffett, surpassed Tesla with 526,409 deliveries in the fourth quarter of 2023, reflecting consumers' shift toward more affordable electric vehicle options.

Competition in electric cars

BYD is not Tesla's only Chinese competitor: strictly speaking, BYD competes on priceBecause they make cheaper cars. while, Competition in cutting-edge electric cars comes from NIO, Another company born in the Asian giant.

BYD will build its first automobile factory in Szeged, Hungary. The facility is expected to create local jobs, boost the economy and support the supply chain, strengthening BYD's presence in Europe.

On the other hand, mobile phone manufacturer Huawei has also launched its electric vehicle brand (Aito) which is already delivering units. Vehicles from Xioami, also a company that originally makes smartphones, will arrive soon.

“Tesla may lose its dominance, but it will continue to play a starring rolesaid investment analyst Jose Ignacio Pano.

Banu pointed out that the company founded by Elon Musk was the first to develop in this industry, and for this reason It has achieved production efficiency that allows it to continue to be the leading brand.

“If the share of electric vehicles continues to grow, as it is expected to grow, “Just because a company is no longer the only one in the market, it doesn't mean it can't continue to do very good business and generate a lot of money.”

Pano admitted that BYD has been able to offer better prices to the market, just as NIO has been able to manufacture cars that are more expensive than Tesla's, but noted that the American company still has better margins due to its efficiency.

For this part, Ignacio Sniechowskihead of research, Dell IEP GroupHe emphasized: “In the United States market, “Tesla is still the big winner, and a war between companies is likely to break out in other countries.”

Sniechowski stated that China is positioning itself as a major competitor in the electric car industry, and added that this is also the reason for its interest in obtaining lithium, which is an essential material to ensure the manufacture of batteries.

Separately, Tesla is recalling more than 1.6 million Model S, The Chinese State Administration for Market Regulation announced the withdrawal.

He said Tesla Motors in Beijing and Shanghai will use over-the-air updates to fix problems, so in most cases car owners will not need to visit Tesla service centers. Recall to repair door opening logic control for imported Model S and Model S

iPhone competition

Regarding Apple, Sniechowski explained that if we focus on the Chinese marketDuring the past year, Apple faced many complications to maintain its sales: Not only because of some restrictions imposed by the government, but also because of this Xiaomi mobile phones are cheaper and have similar or even superior features in some aspects.

“If we focus In the US market, Xiaomi and other Chinese manufacturers are not as popular as Apple productsOr Motorola, Google, Microsoft or even Samsung,” the IEB Group CEO explained anyway.

On the other hand, he pointed out that, as a global trend, The market share of Apple products remains quite stable. Although he highlighted that there is an important factor, which is that The replacement cycle of mobile phones, laptops and tablets has slowedbecause during the pandemic many consumers invested in fleet renewal due to the need to perform tasks remotely which in some way advanced the cycle.

In the first hours of 2024… Apple received a downgrade from Barclays to underweight from equal weight. Barclays expressed concern about a prolonged period of poor results and the potential unsustainability of multiple expansion. The broker set a price target of $160 per share.

The battle for semiconductors

Finally, Sniechowski concluded:Battle backgroundbut, It runs through the semiconductor industry And There it is important to monitor its development because in the mentioned market a battle is taking place between the United States and China. The first does not want the second to be able to produce semiconductors with more advanced technologies necessary for innovation; Especially in mobile products such as mobile phones, laptops and tablets, under the pretext of threats to national security. On the other hand, China wants to reduce its dependence on the overseas semiconductor market and is trying to quickly improve its production technology.