Compilation / Ma Xiaolei
Editor/ Qian Yaguang
Design / Leather
Source/autonews by PETER SIGAL
In July 2012, the Tesla Roadster went on sale in Europe with just over a dozen units on production, a two-seater sports car based on lotus Elise.
By 2021, Tesla has become a car manufacturer on a par with Volkswagen and the number one electric car manufacturer in Europe.
According to JATO Dynamics, Tesla's sales in Europe reached 131801 in November alone, up 85% year-on-year, with the Model 3 being the best performing model.
Tesla has successfully helped consumers reconstruct their perception of electric vehicles, and has also had a profound impact on the manufacture and sale of cars by automakers.
The company has come all the way, first the Model S luxury car, and then the Model 3 medium-sized sedan, Tesla with these two models, in the electric vehicle market to crush Mercedes-Benz, BMW, Audi and other luxury car manufacturers, to open up their own market share.
Analysts said that in order to cater to the subsidy conditions for electric vehicles in Europe, the Model 3 is positioned lower and is encroaching on the market of top mass brands such as Peugeot and Volkswagen.
Looking ahead, Elon Musk pondered launching a smaller product to invade the next tier of the market, which is currently the battleground for Volkswagen brands Renault, Citroën, Hyundai and Kia.
Philippe Houchois, an analyst at Jefferies, a global investment bank, said: "In the upper-middle segment, no one is not afraid of Tesla. By "upper middle," he meant the price range of 45,000 euros (about 325,000 yuan) to 60,000 euros (about 433,000 yuan).
He pointed out that the model Y, a midsize SUV, will squeeze upwards to the likes of the BMW iX3, Mercedes EQC and Volvo XC40 Recharge.
"Volkswagen (Audi), Volvo, BMW and Mercedes all felt the impact from Tesla," Hojos said. He set a $1,400 target for Tesla's stock price, the highest price of any analyst.
He said: "If the average price of Tesla vehicles continues to fall, Mercedes-Benz AND BMWs can probably breathe a sigh of relief, and Toyota, Volkswagen, Stellantis should panic." ”
Grab market share
In May, Musk set a goal at a Factory in Germany that Tesla's global production would reach 20 million units by 2030
Although Tesla's share of the electric vehicle market may decrease as more and more competitive models come out, its share in the European market will continue to rise.
Matthias Schmidt of Schmidt Auto Predictions said: "Tesla's share of the pure electric vehicle (BEV) market peaked at 31% when the Model 3 went public in 2019. Since then, the Model 3 has begun to grow wildly in the European pure electric vehicle market, with basically no competitors. Today, its market share has almost halved compared to then. ”
In 2021, Tesla's share of the pure electric vehicle market in Western Europe is 15%, and the share of the overall passenger car market is 1.7%, ranking behind Volvo and before Jaguar Land Rover, Schmidt said.
He tracks vehicle registrations in 18 Western European countries that contribute the majority of sales to the region's pure electric and premium car markets.
In 2019, the Tesla Model 3 was launched in Europe and quickly became the highest-selling electric car▼
Tesla was able to achieve what it is today, relying heavily on the Model 3. This is a model in the mid-size car segment. Consumers have embraced SUVs over the past few years, and cars in this segment have been left out in the cold.
Tesla's first European factory, the Berlin plant, will begin producing the Model Y in 2022, when the automaker's influence will be further expanded.
In November, the Model Y was the best-selling model in Norway, with the Model 3 in second place. Norway has long been seen as a testing ground for electric transformation.
However, analysts say sales only tell part of the story.
Although traditional manufacturers are sparing no expense in electric transformation, Tesla, a "congenital electric" company, has a clearer and freer development path, and it can use its 14.6% (third quarter of 2021) pure electric vehicle market share to expand the electric vehicle manufacturing network and develop new models.
Hojos said: "These numbers are rare in the automotive industry. An electric vehicle company that claims an average price of $48,000 (about 305,000 yuan) has achieved a 14 percent market share. ”
"In our view, Tesla has challenged the business model of the automotive industry on many levels. In almost all of the least efficient aspects of the automotive industry, it tries to do better. ”
Segments move down
In 2018, the Model S surpassed Mercedes-Benz S-Class, Audi A8 and BMW 7 Series in Europe. However, in 2019 and 2020, the BMW 7 Series has regained the upper hand
Tesla entered Europe at the same time as two Volkswagen-branded electric vehicles, the Renault Zoe Compact and the Nissan Leaf Compact, which were priced at less than a third of the Roadster and Model S at the time.
Germany's high-end brands felt Tesla's oppression for the first time, when the Model S sold more than the high-end brand's benchmark Mercedes S-Class, BMW 7 Series and Audi A8.
After Tesla launched the Model 3 in Europe in 2019, it began to make great strides, making Renault Zoe and Nissan Leaf dull in a very short period of time, straight to the throne of the pure electric vehicle sales champion.
It was also in that year that Tesla's share of the pure electric vehicle market reached 31%, with annual sales of 109,000 vehicles, of which 95,000 were Model 3s.
Schmidt said: "Tesla's sales growth in that year was crazy. Because the new carbon dioxide emission standards take effect in 2020, it is the last year that traditional car companies are struggling on the transformation line. ”
"Established automakers reduced or delayed the supply of pure electric vehicles in 2019, moving both evictions and market debuts to 2020 to help meet their CO2 emissions." He said.
As a result, by 2020, Tesla's pure electric vehicle market share fell to 13.2%. Schmidt said that once Germany starts producing the Model Y, he expects Tesla's share to grow to 20 percent in 2022 and 2.3 percent of the entire car market in Western Europe, which is expected to reach 300,000 units.
By comparison, Jaguar Land Rover's share of 16 Western European countries and Volvo's 2.9% share in 2020, according to industry association ACEA.
In the first half of 2021, the Model 3 reached an important milestone, surpassing sales of the BMW 3 Series, Audi A4 and Mercedes C-Class.
Sammy Chan of LMC Automotive Analytics said Tesla has a lot of potential for expansion, with sales in Europe reaching 400,000 units by around 2025.
Chen said that the pressure brought by Model Y to high-end brands will be greater, but after all, the entire high-end market segment is growing, which can alleviate this pressure to a certain extent.
Al Bedwell, LMC's chief powertrain analyst, said that while Tesla's market share was cut off by other brands' electric vehicles, Model Y contributed a lot to the brand in the third quarter of 2021. Tesla is still the first choice for tech fans of electric vehicles.
Model 2 is coming?
Norway's best-selling model is the Model Y imported from China, with the Model 3▼ in second place
Tesla's next target may be the head segment of the mass market, where Peugeot and Volkswagen will add to their low-cost models (Skoda, Seat, Citroën, Fiat) and Renault will launch the new Megane E-Tech compact electric vehicle.
Hojos said that for Tesla, this is a natural hunting ground, and to meet the local electric vehicle subsidy conditions, it needs to adjust the price.
"Tesla's driving force comes from price." "Therefore, depending on local market conditions, they need to adjust their products to keep prices at parity, or even lower," he said. ”
Given Tesla's current profit margins, it has plenty of room to tweak the product. Considering its profitability in the third quarter of 2021, as long as a few models can receive subsidies in the UK and France, they will have to keep even if they lose money.
Tesla's biggest concern for observers, including competitors, is when the company will launch a new model. There are rumors that Tesla will launch the Model 2, a compact hatchback, in Europe. But Tesla executives didn't respond to the matter on a third-quarter revenue call, saying they wouldn't release new products until cell supply kept up.
Lars Moravy, Tesla's vice president of vehicle engineering, said: "We can't launch a new model with a tight supply of batteries. ”
However, Musk has said that he hopes to reach 2 million vehicles a year by 2030, with an average annual growth rate of 50%.
Morawi told investors: "Ultimately, we will expand the lineup and increase production. It is believed that all major market segments will be covered, whether small, medium or large, sedan, SUV or truck. Of course, there is also a lot of space for Robotaxi (self-driving taxis). ”
Schmidt believes that Tesla's launch of the compact hatchback is the key to the company's market share and the annexation of BBA's 5%-6% share of the European pure electric vehicle market.
But he warned: "The rule of thumb tells us that moving down the segment will evaporate the profit margins faster." ”
LMC's Chen said: "Tesla can enter the compact hatchback market because to maintain profit margins, it needs to reduce the average manufacturing time of the vehicle, so that it can point directly to the Volkswagen ID.3. ”
Halls said that whether to launch the Model 2 and when to launch it are strategic decisions. Model Y and Model 3 still have additional demand, and the company should take advantage of it.
"They are in the most favorable position in the market, maximizing profits in the $50,000-$70,000 price range." And Zoe and Leaf don't have much money to make. "The big question is when to launch the Model 2, and given the company's profitability, they're likely to be produced at a lower margin." ”
Master the process
Pictured: Tesla's factory in Greenhead, Germany, is under construction. Model Y is expected to start production in 2022▼
Even if Tesla loses market share, its sales will continue to grow. Not only that, but investors in Europe are amazed at the company's market value rising at a rocket-by-rocket rate.
In short, Hols said, the traditional car companies with a hundred years of experience have not yet figured out the process, Tesla has mastered in less than 10 years. If its market positioning is affected, it is more likely to be due to a large-scale recall or a lawsuit over vehicle safety.
"Tesla has seven or eight challenges to the industry, and most automakers can only deal with one or two of them at the same time," he said. ”
Tesla's strengths include: Its dropshipping model is 3 to 4 percent more profitable than traditional dealerships; building a supercharger network; integrating software and OTA updates; battery management; eliminating diversity and complexity of components; and designing and manufacturing processes.
Finally, perhaps Tesla's biggest advantage. For example, he said, two aluminium plates produced by the giant die-casting machine at the Berlin factory could replace 40 stamping and welding parts, reducing the number of parts in the vehicle by 40 percent, while also reducing the number of expensive welding robots and saving the space they take up.
"People need to listen to Musk because he does what he says," Halles said. He said in 2019 that Tesla's strength will be expertise in manufacturing. As soon as this statement came out, everyone was laughing at him, because no one knew how to build cars better than BMW at that time. ”
In 2022, the vast majority of Tesla's vehicles will be manufactured on a single platform, a scale unmatched by other automakers. Halls said about 80 percent of the parts for the Model 3 and Model Y are universal, with nearly 850,000 units produced in total in 2022.
The counterattack of traditional car companies
Analysts say veteran car companies have also begun to launch dozens of new electric vehicles on new platforms and electronic and electrical architectures, and at some point in 2025, Tesla's sales may be surpassed by traditional car giants.
In Europe, this point in time could be 2025, the next phase of the EU's emissions targets. Until then, Tesla's high-end brand competitors, such as BMW and Mercedes-Benz, will continue to sell more profitable fuel vehicles and relatively few electric vehicles. After that, they will release a large number of electric vehicles on platforms such as BMW's Neue Klasse and Volkswagen's SSP.
Ultimately, Mr. Hols said, Tesla could steal the market from other automakers in a quiet way.
"My long-held idea was that Tesla would squeeze other automakers to death," he said. But it only needs to take market share from Volkswagen, Toyota, and Stellantis little by little, which will achieve growth, while also undermining the financial stability of traditional manufacturers, and Volkswagen will not let go of a single share. ”
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