Tesla will produce more than 930,000 vehicles in 2021 China's electric vehicle subsidies will be canceled

Global electric vehicle giant Tesla announced its first quarterly delivery data and full-year production delivery data since its headquarters moved to Austin, Texas, on January 2, both of which hit record highs. According to the data, in the fourth quarter of 2021, Tesla produced more than 305,000 electric vehicles, and the annual production of more than 930,000 in 2021 is one step closer to achieving the goal of one million vehicles per year.

On the other hand, China's electric vehicle subsidies will be completely eliminated by the end of 2022.

China's Tesla accounts for more than half of the scale

Tesla delivered more than 308,000 electric vehicles in the fourth quarter and more than 936,000 in the full year of 2021. For the whole of 2020, Tesla delivered 499647 electric vehicles.

Among the electric vehicles delivered in 2021, the Model 3 and Model Y delivered a total of 911208 vehicles, accounting for the vast majority of deliveries, accounting for more than 97%.

Tesla is currently producing at the Lingang Gigafactory in California, California, and The Lingang Gigafactory in Shanghai, china, but the high-end Model X and Model S are only produced in Fremont.

The Chinese Gigafactory is an important driver to help Tesla quickly ramp up production and take the market leadership. A large portion of the Tesla Model 3 and Model Y models produced in Lingang, China, are sold to Europe.

According to Tesla's production and delivery data and data analysis by the China Association of Passenger Vehicles, more than half of Tesla's electric vehicles are currently produced in China's gigafactories, and the annual output is expected to exceed 450,000 vehicles.

The auto industry has struggled with a shortage of parts supply over the past year, and Tesla is still selling well, closely linked to its successful response to the supply chain. However, looking forward to 2022, the shortage of chips and other components will still become the general trend.

Tesla is also passing on part of the cost of parts price increases to consumers, especially in the United States, where Tesla raised prices more than a dozen times last year to secure electric vehicle profits. In China, tesla also began to launch a round of price increases at the end of last year, raising the price of the car by about 10% in less than two months.

Tesla's 2020 earnings report shows that the average selling price per vehicle is down 11% from a year ago, as more consumers turn to the lower-priced Model 3 and Model Y models.

As Tesla's gigafactories around the world continue to be put into production, it is not impossible to achieve Tesla CEO Musk's expected annual production of 20 million electric vehicles. This year, Tesla will start production of model Y electric vehicles at its new plant in Austin, followed by a new plant in Brandenburg, Germany. Tesla plans to produce 500,000 electric vehicles a year in Germany.

Musk revealed last month that the Austin Gigafactory will ultimately be a more than ten billion dollar investment that will directly and indirectly create hundreds of thousands of jobs. According to public filings, Tesla's investment in the first phase of the Austin project is $1.6 billion.

The global competitive landscape remains volatile

Tesla still dominates the sales of battery electric vehicles in the United States and much of the world. Musk recently said that Tesla electric vehicles have now accounted for two-thirds of the market for electric vehicles in the United States. But analysts expect tesla's market share to be gradually eroded in the future as more and more competitors launch electric vehicles.

Alexander Potter, senior research analyst at investment bank Piper Sandler, wrote in a recently released report: "As some peers begin to increase sales of pure electric vehicles, Tesla's share of the pure electric vehicle market will almost certainly decline, after all, Tesla is competing with all types of car companies, but we expect the overall market share of electric vehicles to continue to rise." ”

Toyota Motor Corporation has told investors it will invest $35 billion to launch 30 pure electric vehicles by 2030; Ford's F-150 Lightning electric pickup has also been booked more than 200,000 times; and Volkswagen plans to produce six battery factories in Europe by 2030, betting on the transformation of vehicle electrification and mobility across the board.

In addition to traditional automakers, Tesla will also face competition from start-ups. In 2021, the global electric vehicle market capital is active, and this trend will continue in 2022, and the market is expected to usher in a large number of electric vehicle delivery waves.

For example, U.S. electric vehicle startup Rivian recently began delivering all-electric pickups and SUVs; U.S. evictions including Faraday Future (FF), Canoo, Lordstown Motors, and Fisker have also pledged to begin deliveries in 2022.

According to the forecast of consultancy Alix Partners, about 24% of new cars sold worldwide by 2030 are likely to be pure electric vehicles.

But for Tesla, the Chinese market is a more special market. In 2021, 4 out of every 5 electric vehicles sold in China will be local car brands, and Tesla is the only foreign brand to enter the top ten of Chinese electric vehicle manufacturers.

Bill Russo, founder of automotive consulting company Automobility, told first financial reporters: "The market share of electric vehicle manufacturers in China, including Weilai, Xiaopeng, Ideal, WM, etc., has increased, and Tesla will face more fierce competition." ”

The rising new forces of Local Car Manufacturing in China have put a lot of pressure on Tesla and forced it to adopt an aggressive "low-price strategy" in the Chinese market. According to a report released this year by investment bank Morgan Stanley, Tesla's share of China's pure electric vehicle market may be about 15% in 2021, and with the expansion of Chinese local electric vehicle manufacturers, Tesla's market share in China is expected to fall below 7% by 2030.

As the world's largest auto market, China has set a target of 20% of new energy vehicles accounting for 20% of car sales by 2025. In early December, the China Association of Automobile Manufacturers (CAAM) predicted that China's new energy vehicle sales would grow by 47% to 5 million units in 2021.

However, China's subsidies for new energy vehicles, including electric vehicles, are being cut, and consumers will need to pay higher prices for electric vehicles in the future. On Friday, the Ministry of Finance made it clear in a "Notice on the Financial Subsidy Policy for the Promotion and Application of New Energy Vehicles in 2022": "Considering factors such as the development plan of the new energy vehicle industry, the market sales trend and the smooth transition of enterprises, the subsidy policy for the purchase of new energy vehicles in 2022 will be terminated on December 31, 2022, and vehicles licensed after December 31, 2022 will no longer be subsidized." At the same time, we will continue to increase the intensity of review and do a good job in the liquidation and finishing of the promotion vehicles in the previous year. ”

In response, NIO said on Friday that buyers of ES8, ES6 and EC6 models that paid a deposit on or before December 31, 2021 and picked up before March 31, 2022, can still enjoy the subsidies of the 2021 plan.