Li Ping | wen
1. Model S and X deliveries continue to decline
On January 3, 2022, Tesla officially announced the production and deliveries in 2021. According to the data, in 2021, Tesla's production and sales exceeded 930,000 units, of which global deliveries reached 936,000 units, an increase of 87.4% year-on-year; the annual output was 930,400 units, an increase of 82.5% year-on-year.
In terms of subdivision models, the production of model 3 and Model Y models reached 906,000 units, an increase of 99% year-on-year, and the annual delivery volume exceeded 910,000 units, an increase of 105% year-on-year, accounting for more than 97% of the total delivery; the production of the Model S and Model X models was 24,400 units, down 55% from the same period last year (54,800 units), and the delivery volume was 24,900 units, down 56% from the same period last year (57,000 units).
It is not difficult to see that Tesla's strong growth is increasingly dependent on the increase in sales of the two main models of the Model 3 and Model Y, while the production and delivery of the two high-end models of the Model S and Model X seem to indicate that Tesla is losing the high-end market.
In fact, it is no secret that Tesla's high-end model deliveries have declined. The data shows that from 2018 to 2020, the delivery volume of Model S and Model X models was 101553, 66600 and 57085 respectively, with a significant downward trend year by year. In 2021, Model S and Model X deliveries were less than 30% of the same period in 2018.
The continuous decline in high-end model deliveries has also made Tesla no longer a "nightmare" for the BBA. In the first half of 2021 alone, the BMW Group delivered 1.339 million BMW, MINI and Rolls-Royce vehicles worldwide, an increase of 39.1% year-on-year; Mercedes-Benz cars delivered 1.183 million passenger cars worldwide, up 25.1% year-on-year; Audi Group delivered 981,700 units in the first half of 2021, an increase of 38.8% year-on-year, the best level in the same period of history.
So, why did Tesla, once known as the BBA "Terminator", fall behind from the high-end market?
2. BBA's frontal counter-offensive
The continuous decline in sales of the Model S and Model X models is due to Tesla's own reasons, as well as market and competitive factors.
First of all, the Model S and Model X models are products of several years ago, and the design and configuration have not been updated for a long time, and in some respects they are even inferior to the Model 3. Especially in terms of endurance, autonomous driving technology, etc., Model 3 has surpassed Model S. For consumers, the Model 3, which has a more competitive price, is undoubtedly more attractive.
Model S and Model X want to maintain the previous price point, and urgently need to accelerate technology iteration and product upgrades. However, from the company's internal point of view, Tesla has focused its main energy on the production capacity of the two main models of Model 3 and Model Y in recent years, and has no time to take care of the update and upgrade of Model S and Model X. In 2018, when production capacity was tight, Tesla even suspended the production of Model S and Model X to ensure the delivery of Model 3.
Why does Tesla favor one over the other?
Back in 2018, Wall Street was puzzled that Tesla sacrificed production of model S and model X to boost the delivery of the Model 3. At that time, the Model S was Tesla's key product, the profit margin was also at a peak level, and the Model X delivery volume also achieved three consecutive month-on-month growth in 2017. But as Tesla tilts more resources toward the Model 3, the decline in deliveries of high-margin models has naturally led to a decline in Tesla's overall gross profit, which has also become the main reason for investors' doubts about Musk.
However, the facts seem to prove that Musk's strategic vision of advocating "first principles" is more long-term. Although the Model S and Model X have relatively higher gross margins, the price-competitive Model 3 is the real impulse model. For new energy vehicle companies, only when the output reaches a certain threshold can it bring about scale effects, thereby reducing the upstream and downstream costs of the industrial chain to achieve real profitability.
With the significant increase in Model 3 and Model Y deliveries, Tesla Vehicle sales gross margin reached 30.5% in the third quarter of 2021, exceeding 30% for the first time in history, and drove the company's overall gross profit margin to 26.6%, and it is clear that the decline in Model S and Model X deliveries did not affect Tesla's profitability.
That is to say, the transfer of Tesla's own strategy has made it unable to take care of the upgrade and technical iteration of Model S and Model X products, and the decline in sales of the two high-end models has not affected it too much.
The decline in sales of model S and Model X also has market-level factors. The market demand for high-end luxury brands is more diverse, and even if it is exhausted, Tesla will not be able to unify the rivers and lakes. In the early days, Tesla became a "big toy" for some rich people with its pure electric drive, sense of technology and other fresh experiences, but with the maturity of consumers and the popularity of trams, Tesla's attractiveness is no longer so strong, while at the same time, the brand advantages of BBA and other giant car companies and the unique selling points of products still attract inherent consumer groups.
More importantly, in the face of the rolling trend of automobile electrification, BBA, which has the advantage of high-end brands, is also accelerating its own transformation pace and has successively launched pure electric models.
At the beginning of 2021, Mercedes-Benz announced that it will open the "Year of EQ", promote the "electric first" strategy, and expand the lineup of electric vehicle models. In November 2021, EQA and EQB two pure electric SUV models were launched simultaneously, plus the first pure electric model EQC, Mercedes-Benz pure electric matrix has three SUV models.
Just one day before the launch of EQS, BMW also announced a pure electric strategy, in addition to iX3, iX, BMW i4, iNEXT and a number of I series models will be listed one after another.
In terms of Audi, since 2021, Audi has put on the market four electric models of the C-class sedan e-tron GT quattro, RS e-tron GT and compact Q4 e-tron and Q4 Sportback e-tron, doubling the number of pure electric models.
Obviously, the previous Tesla can use Model S and Model X to raid the high-end market, but with the entry of BBA's electric vehicles, Tesla will face the frontal counterattack of BBA, and the market share of high-end electric vehicles will naturally be impacted, plus Tesla will turn its energy to the mass market, and the market performance of Model S and Model X is not as good as before, and it is normal.
So, in the face of the continuous decline of high-end models, will Tesla still deal with it?
3. Tesla's real rival
"Who is our enemy and who is our friend?" This question is the first question of the revolution. "For Tesla, behind the shift in its strategic development direction is its shift from the BBA and other giants to toyota, Volkswagen and other fuel vehicle sales giants." After all, disrupting the entire gas car market (not beating the BBA) is Musk's real goal.
In October 2021, Musk proposed at Tesla's 2021 annual shareholder meeting that "20 million vehicles will be sold annually in 2030", causing an uproar. According to estimates, in the next 9 years, Tesla will have to maintain a sales growth of 43% to achieve this goal.
This figure is more than the new car deliveries of Japan's Toyota and Germany's Volkswagen, the world's two largest car companies in 2020. But despite the exaggerations, it is not entirely impossible. From the fourth quarter of 2016 to the present, Tesla's global delivery volume has grown at a compound annual growth rate of 71%, and Musk is confident that Tesla will maintain an annualized growth rate of at least 50%, and its goal of 20 million vehicles is derived from this.
Production capacity has become the biggest challenge on Tesla's way to advancement. In order to further improve delivery capabilities, Tesla will once again expand production at the Shanghai Gigafactory, and its new plant in Brandenburg, Germany, will also be put into operation, and plans to produce 500,000 electric vehicles per year. According to Soochow Securities, Tesla's effective production capacity will be about 1.6 million units in 2021, and its production capacity will be further expanded to 2.45 million units in 2022.
Traditional car giants such as Toyota and Volkswagen will certainly not sit idly by and allow market share to be lost. In December last year, the Volkswagen Group announced a new five-year plan. According to the plan, Volkswagen will invest 89 billion euros in software and electric vehicle technology research and development, of which investment in electric vehicles will increase by about 50% to 52 billion euros, in order to catch up with Tesla as soon as possible to become a "global leader in electric vehicles".
It is not difficult to imagine that under the pressure of increasingly fierce competition, the pressure of Tesla to continue to maintain rapid growth in the future is not small, and it is not realistic to set sales targets by linear extrapolation. Frequent safety accidents and car recalls also indicate that the rushing Tesla seems to need to properly "slow down".
On December 21, Tesla filed two large-scale recalls with the National Highway Traffic Safety Administration (NHTSA), including recalls of 119009 Model S due to the possibility of loosening of the front trunk, and recalls 356309 Model 3s due to the possibility of reversing cameras stopping working.
On the last day of 2021, Tesla China announced a recall of 19,697 imported Model S, 35,836 imported Model 3s and 144208 domestic Model 3s, totaling nearly 200,000 vehicles recalled.
The largest global recall in history has undoubtedly sounded the alarm for Tesla. While pursuing speed, Tesla also needs to re-examine its own quality and quality control issues. The so-called of a thousand miles, collapsed in the ant hole, once the fatal problem occurs on the product side, Tesla's reputation and brand influence accumulated for many years will no longer exist. In this sense, Tesla's biggest rival is still himself.
It should also be noted that even if the Model 3 and Model Y models can continue to maintain rapid growth, Tesla still needs a certain high-end market share to maintain its brand image. But at present, from the average price of bicycles, Tesla is accelerating its fall from the "luxury brand" to the Volkswagen brand.
In April 2014, Tesla officially entered China. When the first Chinese users took over the key to the Model S, the model S started at 648,000 yuan, and the Model X launched since then has exceeded the million mark.
However, the latest data shows that from January to November 2021, the average price of Tesla bicycles was 285,000 yuan, ranking 11th, while the average prices of Mercedes-Benz, BMW and Audi bicycles were 481,900 yuan, 402,300 yuan and 326,800 yuan, respectively.
In fact, the average price of Tesla bicycles is not only lower than that of BBA, but also lower than that of new forces such as Weilai and Ideal. As can be seen from the above figure, from January to November 2021, the average price of Weilai and Ideal Bicycles was 413,800 yuan and 333,600 yuan respectively, ranking 4th and 9th respectively, and both exceeded tesla's average bicycle price.
It is hard to imagine that without Audi, Porsche Volkswagen Group, or Toyota without Lexus, there would be the current market appeal and jianghu status. Also for Tesla, which aims to dominate the world, the high-end market is still of strategic significance. However, under the attack of opponents such as new forces teammates and traditional fuel vehicle companies, Tesla's pressure to "return" to the high-end market is not small.