This article is from WeChat official account:Shenran (ID: shenrancaijing)< span class="text-remarks">, author: Liming, editor: Wei Jia, original title: “Tesla cannot be separated from China”, title picture: Visual China
This should be the most uncomfortable period in China since Tesla entered China.
There are several things like this: In mid-April, at the Shanghai Auto Show, a female car owner defended her rights due to “brake failure”; in early May, a Tesla “suddenly accelerated” in an underground parking lot in Guangzhou and crashed into a concrete pillar, causing the death of a passenger ; In mid-May, Zhejiang-Tesla knocked down two traffic police in a row, and one of them died in the line.
These are all accidents caused by vehicle quality or driver control problems. At the same time of these incidents, there were also several incidents: After the female car owner made a big fuss at the auto show, Tesla hit back hard, but then the central media criticized it by name, and Tesla served soft cooperation; the National Cyberspace Administration issued a policy in early May. The transmission of automobile data overseas without permission is banned by Tesla. Tesla expressed its support; the Federation of Passengers announced that Tesla’s April sales in China had plummeted by 67% from the previous month, making analysts at home and abroad dumbfounded.
These events are more or less related. The core question is, what happened to Tesla in China?
Reuters reported on May 11 that due to the uncertainty of Sino-US relations, Tesla has suspended buying land in Shanghai to expand its factory, and temporarily shelved its plan to use the Shanghai factory as a global export center. This has aggravated the concerns of the outside world about Tesla’s situation in China, and some voices have begun to appear: Is Tesla going to withdraw from China?
The real situation may not be that simple.
China is Tesla’s largest market outside the United States, contributing more than 1/4 of its sales and more than 1/5 of its revenue in 2020. Since the fourth quarter of last year, about 30,000 to 40,000 Teslas produced in Shanghai, China, were shipped and exported to Europe, Japan and other countries in each quarter. In those places, Tesla does not have its own production plants. Rely on Shanghai’s production capacity.
Tesla’s sales really broke out, including the stock price skyrocketing, which actually started in 2019, which was when Tesla’s domestic Model 3 began to deliver on a large scale. Shanghai’s production capacity, China’sThe market contributes to Tesla’s dominance.
At this stage, even after being criticized by the central media, regulated by policies, and rubbed by public opinion on the ground, Tesla still expressed support and cooperation. Because, at least for now, Tesla cannot do without China.
The magical April plummet
After Tesla’s April sales in China came out, analysts at home and abroad were surprised.
According to the data from the Federation of Travel Services, the wholesale sales of Tesla in China in April were 25,845. Many people took this data to compare with 35,478 in March, and concluded that Tesla’s sales in China in April fell by 27% from the previous month. The conclusion.
But in fact, this calculation method is wrong. The true rate of decline is 67%.
Shen Ran asked the Citizens Association to confirm the statistical caliber of Tesla’s sales in China: Before April this year, the sales of Tesla in the Chinese market announced by the Citizens Association each month were retail sales. Including exports, not only domestic retail sales, but also export sales were announced in April.
In April, Tesla China sold a total of 25,845 vehicles, of which only 11,671 were sold domestically (6264 Model 3, 5407 Model Y), and the remaining 14,174 were shipped and exported in Shanghai. In March, Tesla sold 35,478 vehicles in the Chinese market.
The data of 11,671 vehicles sold in China is basically consistent with the data of China Automotive Industry Information Network. The latter data shows that the number of Chinese-made Teslas was 11949 in April and 34,714 in March.
So, Tesla’s sales in China in April fell by 67% compared to March, and Model 3 and Model Y fell by 75% and 47%, respectively, which can be described as a sharp drop.
Tesla’s sales in China in the past year Data source/ Chuanglianhui
On the other hand, in terms of the sales of a single model, in April, Hongguang MINI’s sales were 26,592, 4.2 times that of Model 3, and BYD Han also sold 5,746, which is very close to Model 3 and surpassed it. Model Y, Ideal ONE sold 5539 units, surpassing Model Y.
April sales ranking of new cars in China Data source / Travel Union Association
What happened in April that caused Tesla’s sales in China to decline so severely?
Many people would think that it was the impact of the Shanghai Auto Show’s rights defense turmoil. However, the Shanghai Auto Show only started on April 19, and the storm reached its climax at the end of April. The impact on orders and deliveries will actually not appear until May and June. In April, many car owners had to wait in line to pick up the car after placing an order. The order has not been digested, and the impact will not be so fast.
In other words, there is no shortage of Tesla orders in April. Is the lack of production capacity?
According to Shenran, the Federation of Passengers replied that the reason for the large difference between Tesla’s sales in April and March is because of the large difference between the end of the quarter and the beginning of the quarter, and Tesla’s transformation of the production line in April. CBN also reported that the Model Y production line of the Shanghai Super Factory was suspended for two weeks in April to upgrade the production line equipment, and sales have fluctuated as a result.
But Tesla’s main model sold in China is the Model 3, and Model Y has not yet started, and it was not Model Y that had the most sales decline in April.
In any case, Tesla’s performance in the Chinese market in April was indeed unsatisfactory.
But Tesla’s exports to China have not relaxed. At present, the domestic Tesla produced by Tesla’s Shanghai Super Factory is not only sold in the domestic market, but part of it is exported. April14,174 domestic Teslas were exported to Europe, Japan and other countries, even exceeding sales in the Chinese domestic market, setting a record for Tesla’s exports to China.
According to Cui Dongshu, Secretary-General of the Travel Association, Tesla exports at least 30,000 to 40,000 vehicles in a quarter, and the annual scale is more than 100,000.
Yang Li, partner of Jiuqian Consulting, told Shenran that Tesla’s April export volume was real. Jiu Qian did a data tracking and found that Tesla Shanghai’s production volume in April did not drop significantly compared to March, while the domestic delivery volume fell in April because Tesla chose to deliver most of its vehicles overseas. .
“Our visit to Tesla’s domestic stores also showed that Tesla’s domestic delivery time will become longer.” Yang Li said.
In other words, with the limited production capacity of the Shanghai factory, Tesla has allocated more production capacity to overseas markets to ensure the stability of exports.
How important is China to Tesla?
Many people underestimate the importance of China to Tesla.
Needless to say the huge market demand. Tesla’s products are sold globally, and China has been its second largest market outside the United States in the past few years.
As early as 2016, Tesla’s total annual revenue was 7 billion US dollars, China contributed 1.1 billion US dollars, and the US market’s revenue was only 4.2 billion US dollars at that time. In the past few years, Tesla’s revenue in China has increased along with the increase in sales. In 2020, Tesla made US$6.7 billion in China, and its share of global revenue rose to 21%, while the share of revenue in the US market fell to less than 50%. In the first quarter of this year, the Chinese market has contributed $3 billion in revenue to Tesla, accounting for 29% of global revenue.
Tesla’s income in China over the years
In contrast, the European markets that Tesla has focused on early on, the Netherlands and Norway, have never accounted for more than 10% of Tesla’s revenue. After 2019, Tesla simply gave up on disclosing their revenue data separately in the earnings report. The global center of gravity is constantly shifting to China.
Currently, Tesla has only four factories (not under construction) built around the world, namely the Fremont factory, the Nevada battery factory, the Buffalo factory in New York, and the Shanghai Gigafactory in China. The first three are all in the United States, and the Shanghai plant is Tesla’s first overseas super factory.
Tesla’s financial report for the first quarter of 2021 shows that the Shanghai plant has an annual production capacity of 450,000 vehicles, accounting for 42.86% of Tesla’s global production capacity. In other words, half of Tesla’s global production capacity is in China.
The Shanghai Municipal Government used to be a strong supporter of Tesla, giving it the green light to build a factory in China. In order to land the Shanghai factory, under the policy of “one city, no two factories”, Weilai Automobile, which had already started construction of the factory in Shanghai, had to abandon Shanghai and go to Hefei. Tesla’s Shanghai factory has also become China’s first and only foreign passenger car factory that does not require a joint venture.
It only took 10 months for this factory to be officially opened to trial production, which was about 14 months earlier than Tesla’s originally expected time. Musk used “shocked” to describe what he saw in China. everything of.
In March last year, when the epidemic was at its worst, Tesla’s Shanghai plant was the first factory to resume production. At that time, its U.S. plant had to shut down extensively. If it were not for the Shanghai plant, Tesla would not be able to complete 2020. Production plan of 500,000 vehicles.
Tesla’s quarterly production and sales
Perhaps most Chinese people are used to the speed of China that shocked Musk. But when we put our sights on other countries, it is a completely different situation.
In November 2019, Tesla announced that it will build its first European factory in Berlin, Germany, and plans to start production before July 1, 2021. In contrast to the rapid progress in China, the Berlin factory has repeatedly stalled due to lengthy approval procedures.
For example, in December last year, a German court ordered Tesla to suspend the forest clearing project at the site of its proposed factory. The reason was that the local environmental protection organization was worried that deforestation would endanger the hibernating snakes and lizards.
In addition, during the construction process, Tesla needs to abide by the technical regulations of the water resources protection area, as well as the local noise protection requirements, all of which require various temporary permits. Tesla was also fined 12 million euros by the German local government for recycling of scrapped batteries.
These factors are slowing down the commissioning speed of Tesla’s Berlin plant. Today, less than 40 days have passed since its planned production time. If the Berlin plant is postponed, Tesla will have to continue to rely on the production capacity of the Shanghai plant.
In addition to demand and production capacity, Tesla also needs China’s huge vehicle owners’ driving data. According to Musk’s vision, Tesla must achieve fully autonomous driving in the future, and this needs to be built on the basis of machine learning. Therefore, Tesla chose the vision route with the camera as the core. This requires cars to continuously collect driving data and then use algorithms for machine learning.
If there is no data from China, Tesla’s autonomous driving technology will be missing a piece of the puzzle.
Tesla in the cracks
Before 2021, thanks to the success of the Chinese market, Tesla’s global strategy has been rapidly advanced-the US factory firmly guards the US home base; the Shanghai factory, as a successful example of its overseas expansion, is conquering China, the world At the same time as the most important strategic height, it is also exploring other overseas markets; the German factory has started construction to prepare for the future occupation of Europe.
However, starting from the Shanghai Auto Show in 2021, the relationship between Tesla and Chinese consumers, as well as related regulatory agencies, has cracked.
More and more product quality problems have been exposed, even amplified, and Tesla has been frequently scolded on hot searches, as if it had become a public enemy of the whole people. This is just appearance. The tightening of supervision has made Tesla’s China situation more subtle.
In March, there was news that some regional regulatory agencies in China proposed that Tesla vehicles should not be parked in sensitive areas to prevent vehicle cameras from collecting data.In April, the National Information Security Standardization Technical Committee issued a draft stating that roads, buildings, terrain, traffic and other data collected by connected vehicles through cameras and radars should not be out of the country. Then in May, the National Cyberspace Administration of China issued a policy to prohibit the transmission of automobile data outside the country without permission.
How to supervise Tesla is already on the agenda of the supervisory work. Of course, this is a problem for both Tesla and supervision.
Different from extreme arrogance towards car owners, Tesla is very compliant with regulatory requirements and expresses its support in a clear-cut manner. It also stated that it will build a data platform in China in 2021 for car owners to query vehicle driving data.
The Chinese market is too important, and Tesla has to act softly, especially at this critical node.
At this stage, Tesla is not only inseparable from the Chinese market, but also from the Shanghai factory in China.
Source / Unsplash
In Europe, traditional car companies represented by Volkswagen have slowed down since last year and launched electric models to vigorously seize the market. However, Tesla does not have a production plant in Europe, resulting in a decline in its market share.
Some overseas analysts said that in 2020, Tesla’s sales in 18 Western European countries fell by 11% year-on-year. According to data from JATO Dynamics, in 27 EU countries, Tesla’s sales fell by 12%, and its share of the European pure electric vehicle market was 13.4%, lagging behind Renault-Nissan Alliance (18.6%) and Volkswagen Group. (23.9%).
The European market is very important to Tesla’s global strategy. In the past, Tesla relied on American factories for supplies in Europe, and now it relies on “blood transfusions” from the Shanghai factory to maintain its European car supply.
In October last year, Tesla China announced the start of the entire vehicle export business, which was produced by Tesla’s Shanghai Super Factory.The Model 3 produced is shipped at the Shanghai Haitong International Automobile Terminal and sold to more than 10 European countries including Germany, France, Italy, the Netherlands, Portugal, Switzerland, and Sweden. The first batch is about 7,000 vehicles. That month, Tesla only reserved 12,143 vehicles for the Chinese domestic market.
According to the Travel Federation, since that time, about 10,000 domestically-made Model 3s have been exported to China every month. Tesla admitted in its financial report: “The increase in exports of cars produced by the Shanghai Super Factory has effectively eased our delivery pressure.”
It is necessary to hit both the Chinese market and the European market, but the current production capacity is limited and scarce. Therefore, before the Berlin factory is officially put into operation, how to allocate the production capacity of the Shanghai factory has become a matter for Tesla. Multiple-choice questions.
Yang Li believes that the rights protection incident in April will have an impact on Tesla’s sales.
According to the interviews conducted by Jiuqian Consulting with 1,800 domestic consumers in the second half of last year, the safety of electric vehicles is the threshold for consumers to purchase, and safety anxiety is second only to mileage anxiety.
Tesla’s advantage in the past is safety and technology. It is the industry’s definer. The general impression given to consumers is that Tesla’s technology is very good, safe and reliable, and is superior to other brands in the minds of consumers.
However, since the rights defense incident, all security incidents related to Tesla have been deeply dug by the media, destroying Tesla’s past security perception advantages.
At the same time, compared with other domestic brands, Tesla consumers have relatively young customers and are more affected by public opinion, and their ability to collect information on the Internet is also relatively strong. Therefore, the information of rights protection events will be fully perceived by consumers.
The bears are eyeing Tesla again. The prototype of the movie “Big Short”, Michael Burry, who became famous because of shorting subprime loans, disclosed in a regulatory document submitted on May 17 that as of the end of the first quarter, “Big Shorts” held a total of 800,000 shares of Tesla. Put options are worth more than $500 million.
Since the beginning of April, Tesla’s stock price has fallen by 13%, down 36% from its highest point at the beginning of the year.
Don’t deify Musk, don’t demonize Tesla
From the current situation, Tesla has encountered difficulties in China. And Musk’s past Silicon Valley “Iron Man” persona has gradually collapsed because of currency speculation.
For a long time, Musk wasChina has a halo. There are many labels on him, such as highly educated elites, tech geeks, serial entrepreneurs, he builds electric cars, shoots rockets, and explores outer space.
In addition, he is not as serious and rigid as many entrepreneurs. He is very active on Twitter. He often speaks surprisingly and has a big brain. He also gets close to Chinese consumers by eating traditional Chinese food such as Sichuan hot pot, Tianjin pancake and fruit, and old Beijing Xisi buns.
This allowed him to have a large number of fans. As Tesla’s sales broke out last year and its stock price soared, Musk’s image was further deified.
But since Musk started publicly speculating on coins, his image has begun to collapse.
Source / Visual China
First, Musk frequently advocated Bitcoin on Twitter. In the first quarter, Tesla made $100 million by trading Bitcoin. When the price of Bitcoin was approaching a high of $60,000 per coin, and the increase was weak, Musk suddenly changed his position and announced that Tesla would suspend the use of Bitcoin to pay for car purchases, on the grounds that Bitcoin mining would cause environmental damage. influences. Then the price of Bitcoin plummeted.
There is also Dogecoin. Such a “junk coin” regarded by many in the currency circle as having no value, has attracted a large number of retail investors to participate in the speculation under Musk’s “carrying goods”. In 5 months of this year, the price has skyrocketed 130 times.
In late May, the price of virtual currency plummeted, hundreds of thousands of people broke their positions, most of which were retail investors who later bought them. The virtual currency price was beaten back to its original shape, and the deified Musk also showed its original shape.
In the Chinese market, Tesla, arrogant and accustomed to it, when there are more and more quality problems, superimposed on the subtle game relationship between the big countries, and Musk’s person who cuts the leeks is reversed, so it attracts criticism. One piece, the voice of “Let Tesla get out of China” has also increased. Some ordinary traffic accidents have also been upgraded or even demonized under the influence of public opinion.
But in fact, Musk is still the same Musk, and Tesla is still the same Tesla. Businessman Musk has his own cunning and greedy side, and electric car pioneer Tesla also has its own advanced features. At least for now, from the perspective of product strength, Tesla is still the most advanced smart electric car in the world. Whether in China or Europe, there are still a large number of consumers lining up to buy.
So, don’t deify Musk, and Tesla shouldn’t be demonized. No matter how Tesla’s stock price rises or falls, how sales changes, and what difficulties it encounters now, the market will vote with its feet. At the moment, Tesla is still inseparable from China, and the problems it faces may have just begun.