What kind of chemical reaction will Tesla encounter when it encounters "profit"? Within a day, in a while, everything was full of Tesla, and it successfully landed on major headlines.
Tesla's third-quarter 2019 financial report recently released, with performance "sweet": operating income in the third quarter reached US$6.303 billion, down 7.6% from US$6.824 billion in the same period last year; net profit attributable to the company's common shareholders was US$143 million, compared with a net loss of US$408 million in the previous quarter; cash and cash equivalent reserves increased by US$383 million to US$5.3 billion; gross profit margin rose to 22.8%, higher than 18.9% in the second quarter.
As soon as this news came out, Tesla's stock price, which was constantly "spoken" by various analysts, instantly soared by 21%, breaking through $300 to $308.5 per share, setting a new high since March this year. It is said that the market is sluggish, and the waves wash away the sand to show its true nature. The ten years of persistence of "Iron Man" seems to have finally received a reward. The old words "Thank you CCTV, MTV, Channel V..." have also begun to circulate in my mind, but for Musk, what are the "Thank you China" and "Thank you Shanghai" thanks?
"We have learned a lot from the construction of the Shanghai factory. The average production process cost per car is expected to be about 65% lower than the current Model 3 production system in the United States." Whether Musk's remarks were really accurate after accurate calculations, or the smoke bombs scattered to win the favor of the capital market, as a Shanghai factory with "Chinese speed", it did bring him a lot of surprises.
Judging from the financial report that only has the word "joy" throughout the whole article, as the most eye-catching "Shanghai factory", there are only 28 pages of content, which showcase pictures of the Shanghai factory. In less than 10 months, the factory has entered the trial production stage, achieving production of about 3,000 vehicles per week in the initial stage, and the annual production capacity of 500,000 pure electric vehicles is no longer just a matter of nothing.
At the same time, in the financial report, Tesla also stated without hesitation that China will become the largest market for Model 3. According to official data, Tesla's revenue in China in the first half of 2019 was US$1.469 billion, an increase of 41.80% compared with 1.036 billion yuan in the same period in 2018. China has become Tesla's second largest market in the world. From January to June this year, Tesla's total registration volume in China was 21,800, while Model 3 accounted for 74.8% with 16,300 licenses.
As China, the world's largest new energy vehicle market, has brought Tesla not only sales, but also policies, funds and other support that many car companies covet.
funds, as early as March this year, Tesla received an unsecured loan of RMB 3.5 billion from the syndicate. The loan interest rate is 90% of the central bank's annual benchmark interest rate. The loan mechanism cannot be traced back to Tesla's assets. In October, it signed a financing agreement with China Merchants Bank to obtain a 5 billion yuan unsecured 12-month revolving loan provided by China Merchants Bank. In addition, Tesla also received new loan commitments from several banks that can be used to invest in the United States and other places. In terms of the policy of
, in terms of the detailed requirements of the Lingang region for the Shanghai factory with 50 years of use, it seems that Tesla is under a lot of pressure. The agreement stipulates that Tesla must complete RMB 14.08 billion (about US$2.04 billion) in its Shanghai factory in the next five years, and from the end of 2023, Tesla must pay RMB 2.23 billion (about US$324 million) in taxes every year, otherwise it will have to return the land. Obviously, for Tesla, which is beginning to make a gradual profit, its short-term additional funds such as transportation, manufacturing and tariffs are gradually decreasing with its localized production in China. With its continuous improvement in profitability, it seems that the profitability of seemingly high investments is a bit insignificant.
At the same time, whether it is the import of Model 3 models that enjoy purchase tax exemption, or the recent State Council Executive Meeting decided to optimize the foreign investment policy of automobiles and ensure that domestic and foreign-funded car companies enjoy the same treatment, it is constantly promoting Tesla's development.But today, when the time, place and people are all gathered together, they are all new energy vehicle companies, so why is only Tesla making profits? How to reduce the cost by 65%?
According to Musk, this profit is caused by the acceleration of production capacity, the optional Autopilot and FSD functions have increased revenue, and the decrease in costs has brought about improvement in operational efficiency, etc. Among them, the improvement in operational efficiency specifically refers to a higher fixed cost absorption rate, a reduction in manufacturing and material costs, and a continuous improvement in vehicle quality.
"Reduced manufacturing and material costs" If placed in the Chinese market alone, it seems to be understood as changes in the industrial chain companies behind it. It is understood that most of Tesla's core technology suppliers come from Japan, the United States and Europe, and most domestic companies enter the supply chain system as secondary raw material suppliers. As for the battery that accounts for the highest price in the whole vehicle, Tesla is switching the battery from Panasonic to LG's Nanjing factory. The upstream materials of LG batteries are basically made in China, and cost savings are self-evident.
In addition, according to the financial report data, Tesla's total operating expenses in the third quarter were US$930 million, a slight contraction compared with US$1.088 billion in the previous quarter. Previously, in order to control costs, Musk laid off some sales groups and closed stores to save 6% of the cost. At the same time, thanks to the improvements in Autopilot and fully autonomous driving capabilities, approximately $500 million in cumulative deferred revenue will be released.
is supported by Tesla, is it worse for Chinese new energy vehicle companies to get? Regardless of the past, Tesla has now announced that the Model 3 standard battery life upgraded (made in China) model has officially opened for pre-order, with a price of RMB 355,800, and is expected to start delivery in the first quarter of next year. As time goes by and the competitive landscape is settled, will Tesla still thank China and Shanghai, and at the same time thank many "peers" in China?
