Trump’s tariffs won’t save Musk from China’s BYD

No one wins in a trade war, as economists have insisted for decades. Yet Elon Musk sure does seem to be blowing this maxim to smithereens. In January 2024, the Tesla billionaire warned that America’s electric vehicle industry had no chance of beating China’s without massive tariffs. Fast forward 14 months and Musk finds himself in the winner’s circle as Trump hits the global car industry with 25% tariffs.

As Musk told shareholders back then: “Our observation is generally that Chinese car companies are the most competitive car companies in the world. If there are no trade barriers established, they will pretty much demolish most other car companies in the world,” he continued.

Though China has many EV success stories, Musk clearly had BYD in his sights. At the end of 2024, just as Trump was gearing up for another stint in the White House, China’s EV juggernaut leapfrogged Tesla on revenue as BYD sales topped the US$100 billion mark.

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