shopping mall is like a battlefield. There is no shortage of giants in any industry, but there has never been a brand that has dominated the market for a long time. Even the world's top Tesla is also facing its darkest moment.
The Spring Festival is approaching, and "national subsidies" are on the way out. Major new energy vehicle companies are flexing their muscles for year-end momentum, and various price reduction promotions are dazzling. However, compared with the prosperity of the new energy vehicle market, Tesla, which has always performed strongly, has gone uncharacteristically and lost its past glory.
According to Reuters report, Tesla suspended production at the Shanghai factory on Saturday and will suspend most of the scheduled production work in the last week of December. At the same time, the Shanghai factory canceled the morning shift and informed all workers that they can take a holiday. According to common sense, the Shanghai factory is responsible for about 50% of Tesla's global production capacity. It is a well-deserved and important production base for Tesla in the global industrial chain layout. It will not be easily suspended unless there are special circumstances. Tesla has not announced the specific reasons for this sudden shutdown, which will inevitably surprise the outside world and trigger curiosity and speculation.
In fact, compared with the sudden suspension of production at the Shanghai factory, Tesla's stock price is even more pessimistic, and it has already exposed the capital market 's attitude towards Tesla. It is reported that Tesla's stock price has fallen dramatically in 2022, with a cumulative drop of nearly 70% this year. In just one year, Tesla has gone from a valuation of one trillion US dollars at its peak to less than 400 billion US dollars today, and its market value has evaporated by more than 700 billion US dollars. The huge gap, and the cruel reality of withdrawing from the top ten listed companies in the world, have forced the outside world to believe that Tesla is entering its darkest moment.
Although Musk tried his best to emphasize the plummeting stock price to Tesla shareholders, blaming the decline in stock prices on the Federal Reserve's interest rate hike, and claiming on Twitter that "people will increasingly transfer funds from stocks to cash, causing the stock to fall." However, the richest man Musk's eloquent desire to survive has not reversed the capital market's attitude towards Tesla, nor can it stop the continued decline of Tesla's stock price.
It is not difficult to understand that Tesla’s stock price has plummeted this year, which has a lot to do with the capital market. Musk has sold a large number of Tesla shares this year in order to raise the $44 billion needed to acquire Twitter. Musk's behavior of burning a lot of money to acquire Twitter has inevitably caused investors to worry that Musk will focus more on Twitter in the future instead of electric car production.
The concerns of the capital market and investors are not unreasonable. After all, Musk has put a lot of effort into acquiring and operating Twitter. It is obvious to the outside world, from large capital investments to large layoffs within Twitter, and a former Twitter employee said that Musk has been living in the company’s headquarters since he acquired Twitter. Various signs indicate that Musk obviously attaches more importance to Twitter than Tesla.
The factory stopped production and the stock price plummeted. Tesla, which has always been considered the "proud son of heaven" in the capital market, has been a leader in the global new energy vehicle market for almost a long time. Why did the situation take a turn for the worse in 2022 and suddenly ushered in the darkest moment?
It is undeniable that objective market factors are on the one hand. Although the epidemic has eased slightly in some countries and regions, it is still extremely contagious and fast. It is unavoidable for employees on the production line to be infected, which will make it difficult to resume work and affect production capacity. This is also an indisputable fact. In addition, the global economic environment is also not optimistic. Although the domestic life order has returned to normal, the economy affected by the epidemic is difficult to recover quickly in the short term. The global decline in consumption power is still the real status quo of the consumer market, at least in the short term, it cannot be significantly improved or fundamentally changed.
With declining consumption power, sluggish demand, intensifying industry competition, and the combined effect of many force majeure factors, Tesla is clearly facing more severe challenges.
In fact, Tesla has already sensed the crisis in advance and taken specific measures, trying to use more aggressive price reduction promotions to promote sales growth and boost the market.Since September 2022, Tesla has launched a crazy price reduction promotion mode, with prices reduced several times in the short term. At the end of October 2022, Tesla announced a new round of price reduction promotions. The prices of Model 3 and Model Y models were reduced. The price reduction ranges were between 20,000-37,000 and between 14,000-18,000 respectively. For a car originally priced at more than 200,000 yuan, a 10% price reduction is not small. At the same time, Tesla also provides limited-time car purchase benefits while reducing prices. For users who buy a car within a certain period of time, an additional insurance subsidy of up to 8,000 yuan is provided.
However, the actual results brought by the price reduction offensive are not ideal. On the contrary, the frequent and large price reductions have stimulated Tesla owners' concerns and dissatisfaction with the value preservation rate. Due to improper handling, conflicts have intensified, and it even escalated to the point where some Tesla owners came to defend their rights, held up banners, and fought with sales staff. Even if the price is reduced by tens of thousands, it cannot be sold, which means Tesla has fallen into a very embarrassing and dangerous situation.
Compared with Tesla's price reduction promotion, BYD is not afraid at all. It not only responds head-on with price increases, but also achieves strong growth in performance despite price increases.
According to official data released by BYD, in November 2022, BYD's new energy vehicle production was approximately 230,100 vehicles, a year-on-year increase of approximately 1.5 times; sales volume was approximately 230,400 vehicles, a year-on-year increase of approximately 1.53 times. From January to November, the output of new energy vehicles was approximately 1.6418 million units, a year-on-year increase of 218.74%; the sales volume was approximately 1.6283 million units, a year-on-year increase of approximately 219.38%. It is expected that the annual sales volume in 2022 will exceed the 1.8 million mark.
The results are clear at a glance. Although Tesla does not hesitate to reduce prices, in the face of a number of domestic electric vehicles led by BYD, Tesla's self-proclaimed price reduction offensive has been unable to become a trump card in blocking domestic new energy vehicles, and its lethality is not as good as before.
It is undeniable that China is still an important market for the global new energy automobile industry, but with the rise of a number of local brands led by BYD, the competitive pressure faced by Tesla is increasing at a speed visible to the naked eye. Although Tesla has adopted an aggressive promotion strategy that uses price cuts as its last resort, it has not reversed its decline. Compared with the fierce competition and involution in the market, the crisis of brand belief and public opinion, which is invisible to the naked eye but equally dangerous, is obviously more difficult for Tesla.
Frequent brake failure accidents have led to Tesla being labeled "unsafe". If a small number of accidents are accidental and probabilistic events, it can be justified, or it can be attributed to incorrect operation or other external factors. However, after many accidents occurred frequently in a short period of time, from ordinary car owners to professional racing driver Jimmy Lin, , the outside world's view of Tesla brake failure accidents has gradually changed. The outside world's doubts about product safety are increasingly unfavorable to Tesla. The resulting negative public opinion and the outside world's crisis of trust in Tesla will obviously have a huge and far-reaching impact on Tesla's later sales.
Compared with price, concerns about safety at the expense of lives are obviously more important. After many brake door accidents in the past, users and the consumer market have continued to deplete Tesla's product safety and brand trust. Price reductions obviously cannot make up for users' concerns about product safety. If it cannot rebuild its brand reputation and regain public trust, Tesla's darkest moment will only be even more difficult. Behind
’s crazy price cuts, perhaps to a certain extent, it is also an attempt by Tesla to resolve the crisis. However, it is undeniable that although price cuts can alleviate the short-term dilemma of the brand trust crisis to a certain extent, it is not a long-term solution after all. It can only alleviate short-term symptoms, but it does not cure the cause of the disease and cannot achieve the effect of medicine to cure the disease. When domestically produced cars are getting better and better, Tesla's brand advantage will inevitably be weakened. At the same time, frequent brake failure accidents have caused concerns from the outside world. If they are not resolved in time, they may continue to worsen, causing the brand image that already lacks user trust to be even more difficult to perform in the later market.
In the author’s opinion, it is understandable for Tesla to reduce prices to alleviate the current situation of high inventory and slowing growth. However, in view of the later development of the brand, it is more important to trace the source and start from the essence of the problem to solve it. Solving users' pain points and concerns about the safety of Tesla cars is the only life-saving straw. Otherwise, in the long run, in a market environment where many local new energy vehicle brands are competing for the top spot, it will inevitably embark on a sluggish downhill road...
