Elon Musk
Yasin Ozturk/Anadolu Agency via Getty Images
  • Steve Westly said Tesla is facing an increasingly crowded electric-car market.
  • The former board member said Tesla could lose buyers to companies like General Motors or Volkswagen.
  • Tesla is looking to make a cheaper vehicle and expand its market in other countries like China.
  • Visit the Business section of Insider for more stories.

Former Tesla board member Steve Westly said the company is facing off against a lot of competition from other automakers that have dived into the electric-car market.

“Tesla is not going to be king of the hill in electric forever,” Westly told CNBC on Tuesday.  

Westly was an early Tesla investor and has often been bullish on the company’s prospects, but said the electric carmaker will need to “double down” in order to fend off competition. 

In particular, the former board member referenced recent electric-vehicle efforts from major automotive companies, including General Motors and Volkswagen.

“They’re getting competition from all sectors,” Westly said, citing electric cars from luxury brands like Audi and Porsche, as well as less expensive vehicles from companies like Nio and Li Auto in China.

Several EV startups have also started to crowd the market. Lucid Motors, Fisker, and Rivian have already attracted billions of dollars in Wall Street investments.

In February, a J.D. Power study found that many new electric car buyers are considering companies outside of Tesla.

"One could argue this indicates that, while Tesla's appeal is clearly formidable, it's not absolute and could be displaced by a worthy alternative," said Stewart Stropp, senior director of automotive retail, in J.D. Power's press release.

Despite Westly's doubts, Tesla's shares have risen more than 650% in the past year. The company's revenue increased in 2020 from $24.6 billion to $31.5 billion, but it missed Wall Street's fourth-quarter projections by 20%.

Tesla's earnings have Musk vying for the position of the richest man in the world.

Some investors see Tesla's over $700 billion market value as overinflated. "Big Short" investor Michael Burry revealed he was short Tesla in December and called its stock price "ridiculous."

Tesla has long been working to compete with more affordable electric cars, as well as the Chinese market. Tesla plans to design a $25,000 car and has expanded its manufacturing plants into China's lucrative EV market, building a Shanghai Gigafactory.

The company has seen success in China. In 2020, Tesla doubled its revenue in the Chinese market.

Read the original article on Business Insider