Author | Li Tingting
As soon as the year began, the U.S. stock market suffered a heavy setback, some analysts pointed out that the U.S. stock market for 10 years of bull bubble is about to burst, Tesla has also been bloodbathed, this year in less than a month its stock price fell by more than 13%, financial analysis company S3 Partners statistics said that as of last Friday Tesla shorts have made a profit of $2.3 billion.
Last week's disappointing Netflix earnings report once again reinforced investors' exodus sentiment, so Tesla's earnings report is particularly important at this time, whether to turn the tide or worse, this earnings report affects investors' attitudes toward Tesla and even to US stocks in the coming months.
And Tesla never disappoints:
In Q4 2021, Tesla achieved total revenue of $17.719 billion, higher than Wall Street's expectation of $16.6 billion; realized operating profit of $2.613 billion, an operating margin of 14.7%, the highest in the record period; and realized net profit attributable to ordinary shareholders of $2.321 billion, an increase of 760% year-on-year, and a net profit margin of 13.1%.
Tesla has once again refreshed its own quarterly performance record. In the past two years, Tesla's earnings report has been almost a slap in the face of electric vehicle critics and short sellers, and for this tortuous industry, Tesla proves that tesla is what its earnings report writes - "the feasibility and profitability of electric vehicles should no longer be doubted."
Delivery, revenue, and profitability are refreshed again
No matter how tricky the secondary market is, Tesla's performance in the sales market is as good as ever.
In the fourth quarter, Tesla delivered 308,700 vehicles, including 12,000 Model S/X and 297,000 Model 3/Y. The figure grew 70.8 percent year-over-year and 27.9 percent sequentially, beating all analyst expectations, with Wedbush Securities analyst Daniel Ives even calling the performance too good to be "jaw-dropping."
For the full year, Tesla delivered more than 936,000 vehicles, an increase of about 87% year-on-year. At a time when China's "apprentices" are still struggling towards the goal of delivering 100,000 yuan per year, Tesla has already launched an impact on the million mark.
Based on the favorable volume of deliveries, analysts have raised their stock price expectations for Tesla. Moody's upgraded Tesla's debt rating from "Ba3" by two notchs to "Ba1" and said it could also be upgraded to investment grade; Piper Sandler analysts maintained an overweight rating on Tesla at a target price of $1,300; Credit Suisse maintained Tesla's neutral rating, but raised its price target from $830 to $1,025.
But there is no shortage of people pouring cold water, and the latest report released by the Bank of America predicts that the large number of new electric vehicles on the market may cause Tesla's market share in the United States to drop sharply from the current 69% to 19% by 2024, while General Motors and Ford will occupy the largest market share.
The Chinese market also shows a similar trend, according to the data of the Association of Automobiles, Tesla accounted for 12.7% of the pure electric market from January to November 2021, compared with 15.1% in 2020.
With the expansion of the new energy vehicle market and the diversification of products, the decline in Tesla's market share is expected. But Tesla's advantage is that the gross profit level it has achieved at present far exceeds that of traditional car companies and new car manufacturers, so if it cannot occupy more market share, it can occupy more industry profit share.
Taking the fourth quarter data as an example, Tesla's revenue increased by 65% year-on-year, but the corresponding net profit attributable to ordinary shareholders soared by 760%, and the profit growth rate far exceeded the delivery and revenue growth rate.
Specifically, in terms of revenue, Tesla's total revenue in Q4 was $17.719 billion, of which vehicle sales revenue was $15.34 billion, accounting for 86.6%, and carbon credit revenue fell to $314 million; Tesla's total revenue for the whole year was $53.823 billion, an increase of 71% year-on-year.
Revenue expansion and scale effects continue to play a role, Tesla's bicycle costs are still being compressed, and the gross profit level will be far behind a number of traditional car companies:
Q4, Tesla achieved a gross profit of $4.85 billion, an increase of 135% year-on-year, and a gross profit margin of 27.4%; of which the gross profit of the vehicle sales business was 4.65 billion US dollars and the gross profit margin of vehicle sales was 30.3%.
In terms of expenses, Tesla's rate has not changed much in the past three quarters, with the Q4 research and development rate remaining at 4.2% and the sales and management rate at 8.4%.
Based on the above levels of growth and cost and expense control, Tesla once again refreshed the profit record, and proved the feasibility and profit advantages of electric vehicles as it said:
Q4, Tesla achieved a net profit attributable to common shareholders of $2.32 billion, an increase of 760% year-on-year, and a net profit margin of 13.1% and a net profit attributable to ordinary shareholders under Non-GAAP of $2.88 billion, an increase of 219% year-on-year, and a net profit margin of 16.2%.
Expectations were disappointed, and Tesla did not build new cars
Musk, who missed a third-quarter earnings call, is back, this time bringing more information about Tesla's new products to the market — but not much good news.
In fact, not just to take the opportunity of this conference call, Tesla has recently released the progress of new products in a variety of ways. In the three projects of electric pickup truck (Cybertruck), electric truck (Semi), super sports car (Roadster), Tesla has repeatedly lost faith in the market, but the increasingly fierce market competition seems to make Tesla feel pressure.
Cybertruck debuted at the end of 2019, after several delays to production plans. According to Global Equities Research analyst Trip Chowdhry, Tesla is likely to host a special event in March 2022 to announce two new versions of Cyberruck, with major changes from the initial release. Recently, a mass-produced version of the suspected Cyberruck photo was exposed at overseas forums, and the new car reduced the body size and made some detail adjustments.
Tesla Cyberruck has received more than 1.2 million orders, but it is not known what year and month it will be to solve these backlogs of orders. Musk said on the earnings call that due to supply chain problems, especially chip shortages, the mass production of Cybertruck has to be postponed, and at the same time, production will be greatly limited. For the specific mass production time, Musk only said "I hope next year can be."
In any case, even if consumers are willing to wait, Tesla can no longer delay. The competition in the electric pickup track is more intense than expected, Ford has announced that it will increase the annual production of electric pickup truck F-150 Lightning to 150,000 units in 2023, GM has released the "GMC Hummer EV" last year to start mass production this year, and GM also announced plans for a new electric pickup truck at CES.
Cyberruck mass-produced version of the real car picture circulating on the Internet
Another new product that has been waiting for a long time in the market is the Semi electric truck, which was released in 2017 and is scheduled to be put into production in 2019, but the official delivery time has been delayed until this month, when the first 15 Semi are finally delivered to customers. The new car was acquired by PepsiCo, which had previously placed an order for 100 Semis from Tesla.
Semi's real large-scale delivery should also be in 2023, and the premise is that the battery capacity is in line with expectations. Semi is equipped with Tesla's newly released 4680 battery, but as Musk said, "The 4680 battery is an innovative product that requires dozens of major improvements", and it is not difficult to develop. The latest news is that Panasonic expects to mass-produce 4680 batteries as early as 2023.
Tesla Semi
Tesla plans to achieve mass production of the roadster, a supercar, in 2023. Tesla launched its second-generation Roadster in 2017, scheduled for delivery in 2020, and it's no surprise that it's been postponed again. At the end of last year, Tesla's official website removed the Roadster pricing information, and it was speculated that all the Roadster places had been booked.
In addition to the three products that have been made public, the market is also expecting Tesla to bring new surprises - lower-priced passenger cars.
Previously, Tesla's "$25,000 model" expressed in public, the rumors on the market about the product's naming, body structure, and real price have been mixed, and even some media have directly called this "the most anticipated new car in the past decade". But Tesla has no plans to meet this expectation of the market, and Musk publicly responded on the earnings call that "no new car is currently being developed for $25,000, and no new car will be launched this year."
Musk explained that a lot of the parts are shared, especially chips, and there is no more supply, and "launching any new car will not be good for delivery."
Heavy product schedules, market expectations for new cars failed... Through combing, it is not difficult to see that Tesla is not as comfortable as it seems on the surface, in fact, under the supply chain and production capacity test, its research and development and mass production tasks can be described as arduous.
In 2022, Tesla's production capacity test
Can the increasing market demand of the Model 3/Y be met, whether the 1.2 million orders for pickup trucks can be delivered, and when will there be spare time to plan new products... What tests and limits Tesla is still the capacity problem.
As Tesla wrote in this quarter's earnings report: "We believe that what plays a decisive role in the competition in the electric vehicle market is to increase production capacity through supply chain and expansion." "In 2022, an important clue to observe Tesla's development is its capacity expansion.
At present, Tesla's factories that have been put into production are still only the California factory and the Shanghai factory. According to the latest financial report, Tesla's California plant has an annual production capacity of about 600,000 (100,000 Model S/X and 500,000 Model 3/Y), and the annual production capacity of the Shanghai plant is more than 450,000 units (all Model 3/Y).
Among them, according to overseas media reports, the Fremont plant in California achieved an average weekly production of 8550 cars in 2021, surpassing Toyota's factory in Kentucky and becoming the most powerful factory in North America. But even so, at this stage, the California plant and the Shanghai plant have an annual capacity of about 1.05 million vehicles, which is only enough to meet the delivery demand this year.
Expanding production capacity is An imminent demand for Tesla, and it also determines whether Tesla can fully release its growth potential. Tesla co-founder Stroubel mentioned in an interview this month that the demand for electric vehicles is soaring, but the increase in production capacity has not kept up with demand, "which makes people a little caught off guard."
Tesla's Berlin factory was originally scheduled to start production in July 2021, but due to environmental issues, the start of production was delayed due to local regulations. Fortunately, according to the latest news, Tesla's Berlin factory has officially begun preparations for large-scale production of model Y, and Tesla's European website has also updated the expected delivery time in March 2022.
Musk has said that the Berlin plant is expected to achieve a continuous production cycle of 45 seconds, with an average of 75% of the time per week to maintain normal operation, if it runs around the clock, that is about 10,000 cars per week. According to this figure, the Berlin plant has an annual production capacity of more than 500,000.
In addition, Tesla's gigafactory in Texas is also about to start production. According to the earnings call, Tesla has begun to produce the Model Y equipped with 4680 batteries in the Texas factory at the end of 2021, and is now doing final certification for these new cars, which may begin delivery by the end of this quarter.
Tesla Berlin Gigafactory
With the commissioning of two gigafactories in Berlin and Texas, as well as the expansion of factories in California and Shanghai, Tesla's production capacity and delivery volume in 2022 may usher in a significant increase. And Musk said on a conference call that Tesla is looking for a new factory location.
Investment bank Piper Sandler believes that Tesla will be able to deliver more than 1.5 million vehicles this year; Morgan Stanley analysts have given higher expectations, believing that Tesla's factories in Texas and Berlin are about to go into production, and annual production will increase from just over 1 million at the end of the third quarter of 2021 to nearly 3 million, and Tesla's deliveries in 2022 will more than double, that is, around 2 million. In response, Musk said tesla deliveries will easily grow to more than 50% in 2022.
However, whether it can achieve the set goals, in addition to Tesla's own production line capabilities, also depends on the supply chain manufacturers such as batteries and chips. Tesla warned in its earnings report that the restrictions imposed by the supply chain in 2022 will continue. Under the long-term trend of improvement, the gap between the rapidly growing market demand for new energy vehicles and the supply capacity of the industrial chain still needs more time to gradually converge.
Investors who are wandering in the skyrocket and plunge also need more patience from the young industry and young players.