Recently, various car forums, both in the automotive industry and the media circle, have been buzzing with discussions about internal competition within the sector. People from all walks of life take turns to express their views, spouting golden quotes as if preparing for graduate school exams, making for a lively scene.

Not only have the chairmen of automotive companies expressed their stance on the issue of internal competition, but also their deputies, including heads of specific business lines, have been frantically voicing their opinions.

From product technology to marketing hype, China's automotive market seems to have entered an era of all-round internal competition.

While Chinese automakers are in the throes of fierce internal competition, does the overseas automotive market escape the same fate? The answer is clearly no.

Look at Tesla, which has been laying off employees, deeply managing its supply chain, and introducing new production processes like integrated die-casting technology and optimizing battery pack sizes. Even Elon Musk's outspokenness is, in essence, a form of internal competition.

However, Chinese competitors have amplified Tesla's internal competition, primarily because there are simply too many of them, with each brand racing ahead and unwilling to lag behind. This has led to the "amplification" of internal competition, resulting in the current market "chaos".

This is why, despite both engaging in cost reduction, Tesla and Chinese new energy brands face vastly different public opinion environments.

Tesla is also engaging in cost reduction

During Tesla's Q4 2023 earnings call on January 25, management responded to questions about cost reduction by stating: "We are always working to cut costs, from engineers and design teams to production processes and negotiations with upstream suppliers."

Tesla previously announced that the cost of its next-generation vehicle platform would be reduced by 50%, achieved through manufacturing innovations, increased vertical integration, and cost reductions in batteries and electric drive systems.

These are all critical aspects of cost control. Additionally, Tesla is attempting to reduce costs by innovating the raw materials used in core components, such as reducing the use of silicon carbide by 75% to save an additional $1,000 in costs. In 2023, Tesla's logistics costs decreased by 2.3%, with measures like using recyclable packaging in the logistics process.

Furthermore, Tesla has laid off employees, simplified wiring layouts, optimized battery pack sizes, and deepened supply chain management. Together, these cost-reduction measures align with Musk's statement that "the production cost of the next-generation platform will be 50% lower than that of the current second-generation platform."

Previously, insiders revealed that Tesla's BOM cost (direct product cost) has dropped from $84,000 in 2017 to $36,000. If Musk's words hold true, the cost of the new platform could fall below $18,000.

This is undoubtedly an impressive achievement.

But does Tesla's focus on cost reduction always yield positive results? Not necessarily. In 2008, when Tesla began producing the Model S, the design team held sway, with a development approach that prioritized design over engineering and manufacturing.

The Model S often experienced misinstalled or missing parts. Even now, one can still find people complaining about Tesla's workmanship issues, such as inconsistent gaps between the hood and front bumper, malfunctioning hidden door handles, uneven stitching inside the A-pillar, and frayed edges on the wooden trim in front of the steering wheel. In evaluations, certain outlets found 31 issues with the workmanship and materials of the domestically produced Tesla Model 3.

Although Tesla has also undergone internal competition and faced product questions, it has not suffered the same public opinion storm as its Chinese counterparts. The author believes there are two reasons: first, overseas new energy vehicle brands lag far behind Tesla in strength, and the competition has not reached a life-and-death level; second, Tesla is a pioneer, and many of its actions are groundbreaking. Competitors can barely keep up, let alone evaluate what is good or bad.

In China, Tesla has even been labeled as the "catfish in the industry," stimulating the transformation of China's new energy vehicles to a significant extent.

Internal competition is not inherently right or wrong

Engaging in similar technological and cost competitions, Chinese new energy brands have encountered the opposite situation. From automakers to the media, discussions about internal competition are erupting like volcanoes. These views and opinions, seemingly opposing, clash fiercely. In reality, people are not opposed to internal competition but rather to unbounded and unrestrained internal competition.

The question arises: what constitutes a bottom line? Understandings vary. Some believe it is laws and regulations, while others focus on practical usage effects or social employment. None of these perspectives can be deemed wrong, as they are all objectively present.

Given this, why do so many industry insiders express their opinions on internal competition? It is simply driven by interests. Here, the author makes no moral judgments or distinctions between right and wrong, but rather aims to elucidate an objective fact.

Everyone, when faced with events that affect their own interests, such as company performance reviews, will instinctively seek more benefits for themselves, with some even going so far as to lobby other colleagues to speak well of them. This is even more pronounced among automaker executives, who, when facing the fundamental interests of their companies, will vigorously promote their brands and even resort to various compliant and non-compliant tactics.

This is not alarmist; such examples abound in the history of global automotive industry development. For instance, the recent series of falsification incidents involving a Japanese automaking giant.

Regarding China's automotive market, internal competition is not inherently right or wrong, and price wars are merely a means to an end. It is the automaker executives and the media outlets that follow their lead who draw lines in the sand. In fact, it's not about right and wrong but rather about each side speaking from its own perspective.

Isn't it interesting to see this?

From a competitive perspective, as long as products can be sold and consumers are willing to buy them, it is effective internal competition. For those who succeed in this competition, we should learn from their experiences rather than criticize them. If one cannot compete with their rivals and resorts to public criticism, it is unnecessary.

The world has never been binary or black and white, but rather complex and ever-changing.

From an industry-wide perspective, it is certainly not a good thing for one or a few companies to dominate, as the former can easily lead to monopoly, while the latter forms alliances, both of which are detrimental to industry development. The most typical examples are the automotive giants in Europe, America, and Japan, which have hesitated in the face of the transition to new energy vehicles, getting pummeled in the Chinese market and serving as cautionary tales.

Only by maintaining sufficient yet controlled competition, or internal competition, can continuous progress be ensured.

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Therefore, everything must have a limit; neither insufficient nor excessive internal competition is desirable.

Insufficient internal competition means stagnation, making it impossible to surpass international automotive giants anytime soon. Excessive internal competition, on the other hand, can distract automakers, with chairmen busy with live streams and hyping topics rather than focusing on research and development of new technologies and materials, thereby hindering technological progress.

After all, the automotive market ultimately speaks through products.