From the day of entering China, Tesla, who has been running all the way with green light, can dig up much gold in the Chinese market. How will it stir up the Chinese electric car market?
Editor’s note: This article is from investing in the network, author Yu Yangyang, editor Zhang Lijuan.
Tesla announced its disappointing third-quarter results, with revenues of $6.3 billion, down 8% from $6.8 billion in the same period last year and down 1% from $6.35 billion in the previous quarter.
It is worth mentioning that even if the revenue does not seem to be shocking, Tesla’s earnings are still full.
In particular, the large-scale disclosure of information on the production of the Shanghai plant, coupled with the market optimistic about Tesla’s entry into the Chinese market, led to a continuous surge in Tesla’s share price, which is almost 20%.
The 28-page earnings report is full of photos from the Shanghai factory. Tesla believes that China has the world’s largest mid-range electric vehicle market, and Model 3 will achieve the highest sales in the Chinese market.
Tesla revealed that the Shanghai plant has begun trial production, and the annual production of Model 3 can reach 150,000. In addition, Model Y will be officially released next summer; limited production of semi-trailer electric trucks will be started; the European factory will soon be sited and planned to start production in 2021.
From Model 3, the supplier is in place, and successively win the “ring guarantee” and “birth certificate”, and then go to the factory to officially electrify. In less than a month in October, Tesla’s message to China was as dense as the big raindrops in the summer.
Refer to the large Shanghai factory, which has been surrounded by a high wall since the start of the construction. Each entrance is equipped with a number of security guards, even if it is a field that has been rushed to catch up with the construction period. Workers were forced to hide in the sparse woods outside the factory because they could not get the badges. Except for the staff and the flies, no one was mixed into the factory.
The mystery in the factory is in stark contrast to the excitement outside the factory. For Tesla, for the Chinese electric car market, a period of ups and downs and unpredictable days is coming.
Why is Musk a heavyweight in China?
In early October, a black body Model 3 was found on a test track next to the factory; information leaked inside the factory showed that Tesla was building a production line to produce the Model 3 of the white body.
In the second half of the month, the environmental information disclosure platform of Shanghai enterprises and institutions disclosed that the Shanghai factory was completed on October 15 and entered the commissioning phase; the commissioning documents also showed that the factory environmental indicators were qualified, no accidents, no bugs. On time, acceptance is just around the corner.Underneath, Tesla has no advantage in terms of price. Once the Shanghai plant is put into production, Model Tesla will effectively avoid sales fluctuations caused by tariff changes in the future.
Tessla stirs up the Chinese market?
China’s new energy vehicle market is indeed very large, beautiful and has unlimited potential. However, there are often many hustle and bustle on the water, and there are many undercurrents and changes in the water.
At present, there are three main reasons for affecting Tesla’s sales in China. In addition to tariffs, the growth of new energy vehicle market is slowing down and the fierce competition from local auto companies is Tesla’s need to break through the Chinese market. The other two “hot potato”.
A less friendly data is that CICC statistics show that since July this year, China’s new energy vehicle sales have fallen for the third consecutive month, down by 4.7%/15.8%/34.2%, and the decline has been expanding. beyond expectation.
China’s new energy vehicle market has begun to “fall down” in the second half of this year, and there is no previous forecast.
Guojin Securities expects to sell 1.195 million new domestic energy passenger cars in 2019, which is lower than the market expectation of 1.3-1.4 million. From the perspective of terminal sales in January-August, especially in July and August, sales continued to be negative year-on-year. The impact of subsidies and passenger car slumps on the industry was higher than expected.
Specific response In Tesla’s operating income, Tesla’s operating income in the Americas climbed from $1.9 billion in 2015 to $14.8 billion in 2018, with an average of 61% in the past three years. In contrast, China’s regional income growth rate is far less strong than the American market, which has accounted for 15%, 17% and 8% in the past three years.
But even then, Guojin Securities predicts that the growth of the new energy vehicle industry will continue to be supported by the restrictions on road restrictions, operational needs and long-term regulation of double-integration, and at least 26% growth will be guaranteed throughout the year. And the industry’s development in the next three years is optimistic.
CICC also predicts that sales of new energy vehicles will remain flat this year. Last year, China’s sales of new energy vehicles nearly tripled in the United States, which is still a much more attractive number than the US market.
In the Chinese market, Tesla will not be able to eat as much as he can.
“No peace” is another major feature of the Chinese market.
From the “China Cool Alliance” more than ten years agoThe dispute between Xing, Huawei, Cool, and Lenovo was the “Thousand Regiments Battle” seven or eight years ago. When the hurricane comes, the Chinese capital market, which is surging with hot money, can quickly nourish a large number of startup companies, and let them die in an extremely fierce commercial competition environment.
Whether you are an outsider or a bandit, war, killing, and then winning are the fate of every company that wants to truly conquer the Chinese market.
You can’t kill others, you have to die, and Tesla is no exception.
In addition to the slowdown in sales of new energy vehicles in China, another challenge for Tesla is the fierce local competition in the Chinese market.
Tesla’s number one public enemy in China is a traditional car company such as BYD, GAC, BAIC and Great Wall. When the vents of new cars have not yet blown up, the traditional car companies represented by BYD have begun a long transition from fuel cars to electric vehicles. They have seized the opportunity of breakthroughs in electric technology and have grown up in today’s new energy vehicle market. Occupy a place.
As can be seen from the sales volume, BYD, which is price-friendly, has been widely welcomed by consumers in China. In 2018, BYD’s sales of new energy vehicles in China were ten times that of Tesla. In the first half of 2019, Tesla’s new energy vehicles sold about 10,000 vehicles in China, while BYD exceeded 120,000.
CICC predicts that with the localization of Tesla, the BYD Don EV in the same price range will be affected, but with the dislocation competition (larger models and higher configurations), BYD is The representative domestic new energy vehicle companies are still expected to occupy a place in the middle and high-end electric vehicle market of 25-30 million yuan.
BYD’s price/performance advantage is still difficult for Tesla to surpass in the short term.
Selling price and endurance comparison of domestic best-selling new energy models (Source: CV Intelligence according to public information)
Compared with the traditional car companies with stable transformation, the situation of new car power is not optimistic.
China’s new car power represents Weilai, and there is currently no fist product to open the market, andContinued in the predicament of huge losses and financing.
But with the release of data in the third quarter of the day, Weilai Q3 delivered a total of 4,799 vehicles, an increase of 35.1% from the previous month, a year-on-year increase of 47%. The sales growth exceeded expectations, which is undoubtedly the storm and its investors. I took a shot of my heart. At the end of August, Wei Lai even launched a rather aggressive “lifetime free replacement” program, in exchange for the promise of overdraft in exchange for consumer choice.
Singular Auto recently received a new round of financing from ITOCHU Corporation, with an investment of nearly $100 million. Although the money is not enough to make a car, but the domestic new car power is still struggling to survive, to make the last blog before the localization of Tesla.
Traditional car companies represented by BYD and successful transformation, with rich vehicle selection, stable productivity and strong technical team in the Chinese market, are still a force that Tesla can not ignore in the short term. .
The new domestic power-building forces represented by Wei Lai are also striving to gain a foothold in the domestic Model 3 before entering the market to ensure the impact is as small as possible.
In the future, Tesla’s ability to dominate the Chinese market will depend on its performance in competing with new and old-fashioned domestic power.
Is the Tesla ready for the new energy car war?
In the past year, the head of the traditional car companies intensively shut down the factory, turning to electric + automatic driving. New energy has become an irreversible trend, and this trend is triggered by Tesla.
In October 2018, Ford Motor Company issued a notice of “reducing employees” to employees. The official estimate is that the number of layoffs will reach 70,000, which will be completed in the second quarter of 2019.
Next, GM announced a cut in jobs, and may shut down up to five plants in North America, as well as two plants outside North America, and discontinued the Buick LaCrosse, Cadillac CT6 and other models, and about 15,000 people were laid off. Musk then yelled GM, and Tesla may be interested in buying if the factory intends to close the sale.
Because the traditional car market is shrinking, GM will turn more to electric and self-driving cars. It will launch 10 new energy models in China by 2020, and the total number of new energy vehicles will double again by 2023.
In December 2018, Fiat Chrysler (FCA) also said that it temporarily dismissed 3,245 employees in Turin Mirafiori, the oldest factory in FCA in Austria, with about 5,000 employees before layoffs.
In the face of the new energy wave brought by Tesla, traditional car companies generally adopt a progressive approach to complete the transformation of electrification, especially the head enterprises. This moment will come in 2020.
In September this year, Mercedes-Benz, BMW, and Audi all appeared in the new pure electric car. On September 5, Mercedes-Benz’s first pure electricEQC will launch in the world and will be launched in China by the end of 2019. Audi’s first pure electric vehicle e-tron will also be launched in September and will be localized in 2020. The BMW iX3 is also scheduled to be launched in 2020. After the new car is put into production, it will be produced by the Shenyang factory and become the sixth BMW model in China.
In October, Volvo and GAC followed closely, Volvo launched the first electric car XC40, and plans to update an electric car every year after 2025; GAC New Energy launched the first pure electric SUV with a battery life of 650km. After the subsidy, the selling price is only 24-34 million yuan, and the confrontation with the Tesla Model S is coming out.
Tesla’s real enemies include not only the new car power that grew up with the air outlets around 2014, but also the traditional car companies that use the progressive method to complete the electric transformation.
But the new energy car war is coming, is Tesla ready?
According to Marklines and Founder Securities, the market share of the three major US auto companies GM, Ford and FCA has occupied the top three seats all the year round. In 2018, only the market share of the three major auto companies accounted for 81% of the US market, while in the entire automotive market, Tesla’s market share was only 0.3% to 0.7%.
It can be seen that Tesla’s current market share is very small compared to the three major automakers, and even completely insufficient. But this also reflects the fact that the space of the new energy vehicle market is still vast, and the value of Tesla needs to be revalued.
In March of this year, Tesla released Model Y. The release of Model Y marks the completion of the Tesla “SEXY” product matrix, and the pre-sale price of Model Y is between Model 3 and Model Y. Previously, Model 3 detonated the global electric vehicle market with the price of the people, and became the main force of Tesla sales in the last two years.
Founder Securities predicts that Model Y is expected to be the next Model 3, supporting Tesla’s sales in the next few years. In addition, the two models are gradually localized, and the prices of Model Y and Model 3 are expected to be further explored. It is only a matter of time before the price is slightly higher or even flat with BYD. Model Y or go hand in hand with Model 3 and become the “two black horses” that support Tesla’s high sales.
Tesla deliveries are still not optimistic. In the long run, Model3 and Model Y, the “two black horses” can “kill out the encirclement”, defeating local competitors, will become the key to helping Tesla win the Chinese market. In the short-term, whether the Shanghai plant can be put into production smoothly will become the key to affecting Tesla’s delivery target this year and turning losses into profit.
Tesla delivered about 97,000 units in the third quarter of this year, slightly higher than the second quarter of this year, but below Wall Street’s previous forecast of 99,000 units, which is also below the target of 100,000 set by Musk. As of the end of the third quarter, Tesla delivered approximately 255,000 vehicles in 2019. However, Tesla will need to deliver more than 100,000 vehicles in the fourth quarter to complete the 360,000 target.
China is already the second largest market for Tesla in the world. In the first half of this year, Tesla’s total sales in China was approximately US$1.469 billion, a year-on-year increase of 41.8%. With the commissioning of the Shanghai plant and the delivery of the domestic Model 3, the Chinese market has played an important role in injecting Tesla with new impetus to get rid of the loss.
In addition to China, Tesla’s ability to incite the European market is slowly emerging.
Tesla’s latest sales data shows that it delivered 3,459 vehicles in the UK in September, and only Q3 Tesla delivered 6,244 vehicles in the UK, exceeding the sales of 3,372 units in 2018 last year. This also helped Tesla occupy 2.2% of the entire UK car market.
But the UK is just Tesla’s third largest market in Europe. The Model 3 hot sale also appeared in many European countries such as Norway and Italy. In the third quarter of this year, only one country in the Netherlands bought nearly 10% of Tesla’s Model 3 worldwide.
In addition, in the second quarter earnings report released at the end of July this year, Tesla said that it is speeding up the search for a European factory and hopes to complete the selection in the next few quarters. The Tesla European plant will be used to produce electric cars and batteries and is likely to be built in the northwest of Germany.
This will be Tesla’s third automotive manufacturing facility worldwide, following the Fremont and Shanghai plants.
Considering that China’s new energy vehicle sales may be lower than expected in the future, the overweight of the European market is indispensable at this time, which will help Tesla to gain a first-mover advantage in the global competition.
The increasingly tense relationship between Tesla and Panasonic will force it to continue to increase its control over the supply chain.
In fact, Tesla has a strong ability to control the supply chain. The main components such as batteries, BMS, motors, and transformers are all produced independently. Panasonic can be said to be the only constraint of Tesla.
Tissera is also active in order to get rid of Panasonic’s dependence on other partners and battery suppliers.
According to Reuters, in January this year, Tesla signed a preliminary agreement with Lishen Battery, which will supply batteries for the Tesla Shanghai Super Factory. In March of this year, according to the US “Automotive News” report, Tesla negotiated with the battery supplier Ningde era and plans to purchase batteries from it.
In recent days, Tesla has listed the Canadian power battery company “Haiba” as one of its subsidiaries in a newly released publicity document. The publicity document did not disclose the purchase amount and specific details. The official website of Haiba’s headquarters has been closed before and after the acquisition.
Tesla announced in February that it would acquire Maxwell, a US company, for $218 million. The company is also a company that provides power battery production solutions. Similar actions occur frequently and are also seen by the outside world as Tesla. Achieve important signals for the independent manufacture of batteries.
Building a “SEXY” product matrix, launching the Chinese market, overweighting the European market, and striving to get rid of Panasonic’s battery to ensure control of the supply chain. Tesla is working hard to close the new car window in 2020. Sprint.
Some prospects
The automotive market in China and around the world has not been as lively as it is today.
Tesla, born in 2003, “created” the new energy market. Weilai and Xiaopeng grew up in the air before and after 2014, and traditional car companies will complete electrification in 2020.
The three forces will meet in 2020.
The change from the fuel car to the electric car is like the change of Nokia to the smart machine ten years ago.
But it’s not like making a mobile phone, and Luo Yonghao is a mobile phone. It’s still a few years since the wind was born, but the funds and barriers needed to build a car and the mobile phone are never in the order of magnitude.
In the five years since its establishment, Weilai has burned 400 million yuan (RMB). James Dyson, the richest man in Britain, announced that he had given up on making a car. On the same day, Jia Yueting, who was “suffocating for the dream of making a car,” was rumored to be applying for personal bankruptcy and restructuring to protect the company and pay off the debt. Zotye Motor, which was rumored to have entered bankruptcy last week, was exposed to hundreds of millions of dollars owed to suppliers.
Tesla China’s production, BYD’s calm battle, Weilai’s survival, GM, Ford, FCA, a number of international traditional car giants are accelerating.
Guojin Securities predicts that due to the decline in subsidies and the limited growth of restricted-limit cities this year, the production and sales of new energy vehicles are lower than expected; but driven by license road rights, operational needs and long-term regulation of double points, new The growth logic of the energy vehicle industry is still ok, and at least 26% of the growth is still guaranteed throughout the year.And the industry’s development in the next three years is optimistic.
The combination of years of brand accumulation, patented technology with competitive advantages and cost reductions is expected to make Tesla a step further in 2020. The performance of the traditional car companies that launched new energy vehicles in 2020 and the new forces of local car manufacturers is crucial for Tesla.
The wind blows out the candle, but it can make the fire burn more prosperously. Perhaps the rest of the battle can last for a long time.