(Bloomberg) -- Tesla Inc.’s biggest competitor is likely to be a Chinese company, Chief Executive Officer Elon Musk said on a call with analysts following the electric-vehicle maker’s quarterly earnings. 

Asked about Chinese car companies, Musk said they “work the hardest, and they work the smartest,” describing them as the most competitive in the world. “If I were to guess,” he said, “probably some company out of China is the most likely to be second to Tesla.” 

Tesla slashed prices on its models in China, where it has a factory in Shanghai, on Jan. 6 following an earlier round of cuts on Chinese-made Model Y and Model 3 EVs in October. Other automakers have also announced cuts to get a better hold in the world’s biggest EV market, including local players such as Xpeng Inc. and Aito, which is backed by Huawei Technologies Co. 

China’s leading EV maker is BYD Co., which outsold Tesla in 2022 when its plug-in hybrid vehicles as well as pure EVs were included.  

Musk said on Wednesday’s call that China is the most competitive market. He’s made similar comments before, including during an online forum in September 2021, when he said he had “a great deal of respect for the many Chinese automakers.”

Tesla made more than 710,000 EVs in China last year, about 52% of its global output, even with production being disrupted by the country’s now-abandoned Covid-Zero policy. Musk said 2022 was difficult due to shutdowns at Tesla’s China factory, along with higher borrowing costs and logistical issues. 

Without unexpected disruptions, worldwide output could approach 2 million vehicles this year, Musk said. 

BloombergNEF expects Tesla’s sales to grow by up to 40% in 2023 and its Model Y to be the best-selling EV in the world, likely making it into the top three models of any type. 

Tesla’s revenue in the fourth quarter was $24.3 billion, ahead of market expectations, while it reported adjusted earnings of $1.19 a share, topping the $1.12 average forecast from analysts.

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