Tesla vs BYD, a peep into business warfare

News stream is now full of stories about Tesla and how it is slipping in sales throughout the globe. But many of these ignore the dark horse BYD from China which is sweeping the market perhaps at a fraction of Tesla price. To me it is business warfare:

Tesla sales have fallen fairly steadily. In the home turf in California it was 31% down in January 2025 to that of 2024. In Europe the bloodletting is high at 43% drop for Jan-February 2025 in relation to 2024. However, in China the damage is managed at 29% slippage compared with the previous year.

The overall market potential shows China topping with 21.8 million units accounting for 37% of the demand while EU 11.2 million units at 24%. Surprisingly, US demand was estimated as just 4.8 million units reflecting the fact that Americans are keen to guzzle gas rather than getting hooked at electricity.

We have to give credit where it is due. Tesla innovated the Electric Vehicle (ev); its brand image is superb, techno feat is excellent, global presence is towering. More than that, Tesla battery charging is seamless. So how a giant of this nature could ever be dwarfed.

The secret is business strategy combined with Sun Tzu style business warfare. China was elated when Tesla wanted to build an ev manufacturing plant in shanghai fully owned by Tesla with no capital participation whatsoever from the Chinese businessmen. Rarely, China entertains 100% foreign ownership inside her vast country. Inevitably, Elon Musk has to leverage on cheap Chinese labour. So that is it. Chinese spies masqueraded as labour got in and learnt the brass tacks. More than that, they copied the entire techno including the patented supercharging battery.

Cost reduction is the key element in BYD business strategy. BYD had the skill in manufacturing a unit that costs Tesla US$ 100,000 to a stripped down version of US$ 16,000. But Tesla understands that it cannot compete with BYD or for that matter any potential Chinese manufacturer of ev on the cost of production side.

Here is a sample list of price tag in USD in four countries:

Country         Tesla               BYD

China            32,438            9,614

Thailand        47,138          16,811

Malaysia        40,724          22,500

UAE              44,566          20,925

In business warfare, China does not go for frontal attack but a flank attack. Allowing space to Tesla in North America, Europe, Australia and other affluent countries China is expanding its tentacles into South-East Asia, Latin America and the Middle-East & North Africa (MENA) region. Leveraging on affordability factor in these markets BYD is beating Tesla hands down.

Let us look at 2024 stats. Tesla sold 1.79 million units of ev, whereas BYD caught up to 1.76 million units. Latest stats show a surge of 60% in the first quarter of 2025 is achievable by BYD. Undoubtedly, BYD business strategy is transforming into a business warfare in Electric Vehicle Sector. How Elon Musk would respond?

 

Cheers!

 

Muthu Ashraff Rajulu

Business Strategist

Mobile: + 94 777 265677

E-mail: cosmicgems@gmail.com

Blog:   Business Strategist

US suspends payment to WTO, where is plan B?

World Trade Organization (WTO) is a member funded entity where contributions are paid into its annual budget on the basis of total trade transacted individually by the 166 member nations. For the year 2003 its budget was Swiss Franc 205 Million.

Succeeding the General Agreement on Tariffs & Trade in 1995, WTO is tasked with the following trade related duties:

(1) Set and enforce rules for international trade

(2) Provide a forum for negotiating and monitoring further trade liberalization

(3) Resolve trade disputes

(4) Increase the transparency of its decision-making processes

(5) Co-operate with other international economics entities in concerned areas.

From stats available at the time of writing the highest percentage of contribution at by USA at 11.67% makes it the largest contributor. China follows at close step with 10.76%. Germany perched at 3^rd with 7.19%. I have worked on the figures available with WTO web page for the tear 2023 and derived the following observations:

1. Although China paid 10.76% the part contributed by Hong Kong of 2.81% and Macao by 0.11% add up to 13.68% of the total contribution to WTO Budget for the year 2023.

2. The European Union consisting of 27 member countries paid a whopping 31.05%.

3. Leaving Hong Kong and Macao out, the five founder members of BRICS group i.e. Brazil, Russia, India, China & South Africa paid 16.36% of the budget

4. New BRICS members Egypt, Indonesia and UAE together paid 2.56%

5. Seven partner countries approved by BRICS to become full members in due course put in yet another chunk of 2.73%. These countries include: Bolivia, Kazakhstan, Cuba, Malaysia, Thailand, Uganda and Nigeria

6. Put together BRICS as a group accounted for a walloping 21.65% a figure that is more than one-fifth of the WTO budget for 2003  closer to the EU and more than the double of US contribution.

According to latest news America has suspended the payment due for 2004 that must be paid at the beginning of 2005.  WTO officials are still searching for a way out of the current quandary. They declare that they have the Plan B, if US suspension becomes a permanent one.

As a business strategist navigating amid geoeconomics, I tend to see a solution to the quagmire from the point of view of EU-BRICS co-operation. May be the Plan B? Now that the WTO headwaiters is situated in Geneva this can be easily done.

 

Cheers!

 

Muthu Ashraff Rajulu

Business Strategist

Mobile: + 94 777 265677

E-mail: cosmicgems@gmail.com

Blog:   Business Strategist

Iran – Russia Treaty upstages Article 51 of U N Charter

Just 3 days before Trump inauguration, Russian President Putin and his Iranian counterpart inked “The Iranian–Russian Treaty on Comprehensive Strategic Partnership” in Moscow. Critics rushed to dismiss it as just another agreement devoid of any mutual defence relationship. None understood the business strategy behind it.

Comparison was made between the earlier one signed between Putin and Kim Jong Un in Pyongyang on June 18, 2024 which was all purposes a mutual defence and security treaty between North Korea and Russia. The absence of any definitive clause in the Iran-Russia strategic partnership was cited as proof that this is purely a commercial agreement.

True enough, subjects of geoeconomics interest such as energy, transport, regional development, bilateral relationship and host of others were alluded to in the body of the agreement. Missing words & phrases implying defence, security and mutual assistance in military affairs are self-evident. Put it in perspective the pact does not constitute formally as a military alliance and requires no direct obligations from either party in the event of conflict.

Just savour this:

Article 3. In the event that either Contracting Party is subject to aggression, the other Contracting Party shall not provide any military or other assistance to the aggressor which would contribute to the continued aggression, and shall help to ensure that the differences that have arisen are settled on the basis of the United Nations Charter and other applicable rules of international law.

But the devil is in the details. Two clauses of the treaty show the slip. Here we go:

Article 12: The Contracting Parties shall facilitate bolstering of peace and security in the Caspian region, Central Asia, Transcaucasia, and the Middle East, cooperate to prevent interference in the specified regions and destabilizing presence of the third states there, and exchange opinions on the situation in other regions of the world. Plain stuff.

Now let us look at the catch in the Article 47 of Iran–Russia treaty which alludes thus:  “By mutual written agreement of the Contracting Parties, this Treaty may be amended and supplemented. Such amendments and supplements shall form an integral part of this Treaty and enter into force in accordance with its Article”.

Then comes the statement by the permanent representative of Iran in the U N:

Iran's military action against Israel was based on Article 51 of the UN Charter regarding the legitimate right to self-defence and in response to the deadly Israeli attack against the Iranian consulate in Syria. Russia accepted & supported his position.

Here is the Article 51 of the U N Charter:

“Nothing in the present Charter shall impair the inherent right of individual or collective self-defence if an armed attack occurs against a Member of the United Nations, until the Security Council has taken measures necessary to maintain international peace and security”.

Russia and Iran understand how to navigate business strategy. Without calling the pact plainly as mutual defence one they have come roundabout way to imply as such.

No wonder despite all those blusters “bomb bomb bomb Iran” the old beach boy’s song rhymed by the late Senator John McCain still remains in the chart only.

 

Cheers!

 

Muthu Ashraff Rajulu

Business Strategist

Mobile: + 94 777 265677

E-mail: cosmicgems@gmail.com

Blog:   Business Strategist