‘BYD is rubbing salt into Tesla’s wounds’

Motoring-related money matters have gone from mad to madder to maniacal in January: some of the numbers that follow will make your eyes water.

First, the revelation that Tesla lost $94,000 million (£74billion) in market valuation during the first couple of weeks of the month. Or, as Bloomberg brutally but succinctly stated, the manufacturer suffers “a $94billion reality check as electric car winter sets in”.

For this, disruptor-in-chief BYD must accept much of the blame. After a near-blanket shutdown in car industry announcements over the Christmas/New Year break, BYD worked overtime and ensured that by 2 January it was known that the Chinese firm will build its first European car plant in Hungary. A day later it confirmed that it had overtaken Tesla as the world’s No.1 electric car manufacturer. No big deal!

Then came news of its plans to effectively and cleverly bypass the growing costs and other problems in the commercial shipping industry by launching the first of seven 200m-long, dual-fuel ships, each capable of carrying 7,000-plus cars. Oh, and to rub more salt into Tesla’s wounds, BYD said it’s investing a further £11billion on smarter in-car tech. So many significant announcements from one car company in just a few days is unprecedented.

Aside from his corporate financial issues and BYD being all over him like a nasty rash, Tesla CEO Elon Musk also endured personal financial pain because “he’s seen his net worth shrink by $23billion (£18bn) so far this year,” according to one respected financial institution. That’s a loss to him as an individual of over one billion per day. Yikes. How’s the poor bloke going to put food on the table?

Unrelated, but still on the subject of eye-watering (and in this case blood-boiling) numbers: in 2023, Britain’s car insurance industry was reportedly worth £19billion. But now the average price of a comprehensive annual policy has, year on year, skyrocketed from £692 to £995. So do these price hikes averaging 58 per cent mean the £19billion industry has, within just 52 weeks, conveniently transformed itself into a far more lucrative £30billion business? And if, after dumping unjustified, inflation-shattering, near-60 per cent price hikes on us over the past 12 months, won’t insurers pull the same stunt over the next 12, thereby rewarding themselves with a near-£50billion per annum industry?

It’s time the House of Commons Transport Committee, Competition and Markets Authority, Insurance Ombudsman and other official watchdogs investigated.

Car insurers are rare in that they can exploit a captive audience of tens of millions of car-using customers. We can’t escape a now-broken car insurance industry that we’re required to buy certificates from before we’re permitted to drive our cars on public roads.

The business model is unfit for purpose. Drastic changes are urgently needed. Without them, current, unreasonably expensive insurance prices will force some drivers off the road. Worse still, such OTT pricing may tragically tempt other motorists to do the unthinkable and illegal – by driving uninsured.

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