Wen | Sun Guangxin
Editor| Zhang Yi
Toyota's "national car" Corolla took 50 years from the first to the sale of millions of units, Tesla's annual mass production from half a million to one million units in just one year, and the Model 3/Y delivered 911,200 units in 2021.
Tesla has refreshed the speed, and the penetration speed of new energy vehicles has exceeded people's expectations.
On January 26, Eastern Time, Tesla released its fourth quarter 2021 financial report, and a large number of growth highlights attracted attention. In the fourth quarter of 2021, Tesla achieved revenue of $17.719 billion, an increase of 65% year-on-year, and net profit of $2.32 billion, an increase of 760% year-on-year. For the full year of 2021, it achieved revenue of $53.824 billion, an increase of 71% year-on-year, and a net profit of $5.519 billion, both higher than previous analysts' forecasts.
The main reason for the increase in revenue was the increase in automobile sales.
According to the previously disclosed production and sales data: Tesla's electric vehicle deliveries in the fourth quarter were 308,600 units, an increase of 71% year-on-year; the annual delivery volume was 936,200 units, an increase of 87% year-on-year. Compared with the delivery record of 499,550 vehicles in 2020, Tesla's delivery volume has almost doubled in one year.
Some analysts believe that in 2022, Tesla's sales will reach 1.4 million vehicles, but Tesla CEO Elon Musk announced in a high-profile manner that deliveries are expected to easily grow to more than 50% in 2022. The earnings report also gives data, and it is expected that the average annual growth rate of delivery volume will reach 50% in the next decade.
Millions of mass production, Tesla has taken the lead in the development of new energy vehicles to the key node, Musk has added a little arrogant capital. Tesla said this shows that the profitability of electric vehicles can exceed that of fuel vehicles.
(Footage of Musk at the delivery ceremony at the Shanghai factory)
Tesla has not only created its own multiple records, but also the overall performance is higher than Wall Street expectations. However, affected by the broader market, Tesla's stock price fell rapidly after rising 1.6% after hours. As of the close of trading on Jan. 26, EST, the Nasdaq was up 0.02 percent and the Dow Jones was down 0.38 percent.
Sales have soared, but production capacity is in short supply.
Tesla also admitted that "our self-operated factories have been below full capacity for several consecutive quarters due to supply chains becoming a major limiting factor, and this situation may continue further throughout 2022".
In response to this problem, Tesla plans to open two new factories in 2022 that are in short supply of chips and other components.
(Tesla Berlin factory screen)
Needless to say, 2021 is a milestone for Tesla. From the phenomenon of great increase in performance, what experience does Tesla contain, and how much future potential is implied? As a leader in the field of new energy vehicles, what inspiration has Tesla's forward experience brought to the domestic market?
Million-level sales activate profitability
Although as early as 2020, Tesla has already handed over a profitable report card. But really making a lot of money by selling cars, 2021 is the first time.
In 2021, Tesla's automotive business revenue was $47.232 billion, up 73% year-on-year, slightly higher than the overall revenue growth rate. Among them, the sales revenue of automobiles was 45.590 billion US dollars, accounting for 84.70% of the revenue; the rest of the income came from car rental. It is worth noting that net profit in 2021 increased by 760% year-on-year, much higher than revenue growth. Meanwhile, in 2021, Tesla's revenue from regulatory credit fell 7% year-on-year.
It can be seen that the sharp increase in sales not only makes a direct contribution to revenue, but also further allocates marginal costs after scale, reducing operating costs and sales and research and development expenses. According to the financial report, Tesla's car sales revenue in the fourth quarter of 2021 increased by 70% compared with 2020, and the growth rate of operating costs was only 50%.
Obviously, from the annual mass production of 500,000 to 1 million, profitability has undergone a qualitative change. It is no wonder that Tesla mentioned in its earnings report that "the feasibility and profitability of electric vehicles should no longer be questioned."
So why did Tesla's sales growth engine suddenly accelerate?
Part of the reason for the surge in sales came from Tesla's hot sales in China and Europe.
By the third quarter of 2021, although North America is still Tesla's largest market, the sales share has been as low as less than 50%, and sales in China and other regions have grown rapidly. By the fourth quarter, China and Europe had become the two largest markets after North America. In 2021, Tesla sold 320,700 units in China, an increase of 177.3% year-on-year.
According to the data released by eu-evs, tesla's total electric vehicle sales in 11 European countries such as Norway, Germany, the United Kingdom, and France in 2021 were 115,700 units, second only to Volkswagen, the second largest electric vehicle brand in terms of sales, and tesla Model 3 ranked first with 95,300 units in the sales ranking of a single model.
In addition, Tesla's gross profit margin has also gradually increased due to the scale impact of sales increases. From 2019 to 2021, Tesla's consolidated gross profit margin was 16.6%, 21.0%, and 25.3%, respectively. Consolidated gross margin for the fourth quarter of 2021 was 27.4 percent, and gross margin for the automotive business was 30.6 percent, both at record highs.
Compared with other new energy vehicle companies, Tesla's gross profit margin is still at the leading level, such as: in the third quarter of 2021, the gross profit margin of Ideal Automobile was 23.3%, Weilai Automobile was 20.3%, and Xiaopeng Automobile was 14.4%.
And all this stems from Tesla building a powerful "ammunition supply depot" for itself.
Tesla is known to have built gigafactory bases in three places. Among them, the Shanghai Gigafactory is the key to undertaking the heavy responsibility of "export" and is also a test field for Tesla to implement the localization strategy.
Shanghai Gigafactory mainly produces Model 3 and Model Y, due to local procurement and manufacturing to reduce the cost of materials, manufacturing, inbound freight and tariffs, with the Shanghai factory production increased, the unit cost of Model 3 and Model Y fell, according to the latest data, Tesla has now reduced the cost of bicycles to about $36,000.
Although the California plant is currently the largest automobile production base in North America, the total production capacity disclosed in the financial report is still 600,000, and it is not currently in full operation. The Shanghai factory still accounts for nearly half of Tesla's production capacity with a capacity of more than 450,000. As Tesla's Berlin and Texas plants are put into operation, the cost of bicycles may fall again, and profit margins may be further released.
Tesla you can't learn?
Officially stepping over the hurdle of mass production, Tesla continues to work intelligence and supply chain.
Tesla is trying to improve the ability of autonomous driving through technologies such as software and AI, and gradually expand the links of the self-developed industrial chain to improve product competitiveness.
Tesla proposed that in 2022, improving the full autopilot capability is the most important work in addition to improving mass production, and the fastest may be to achieve the L4 level of autonomous driving in 2022. According to the earnings report, Tesla's FSD (autopilot kit) has accumulated nearly 60,000 users in the United States, and shortly before the financial report was disclosed, Musk said that he would continue to increase the fee for FSD.
As the penetration rate of new energy rises globally, the core competitiveness has shifted from electrification to intelligence. The intelligence of automobiles has become the main competitive direction of car companies, and automatic driving is the focus of the most attention to the level of intelligence in the market.
In addition, in the past year or so, the lack of cores and parts has always been a common problem faced by global car companies, and Tesla has been able to achieve almost double sales growth in such an environment, which also highlights the ability of supply chain management.
But on the conference call, Tesla is still worried about further capacity growth, so it is constantly optimizing the supply chain in depth.
In 2018, the shortage of Panasonic batteries exacerbated Tesla's production woes, hampering its business expansion for a time. Subsequently, Tesla announced CATL as its battery supplier. A few days ago, CATL revealed that the Shanghai battery module base, only 3 kilometers away from Tesla's Shanghai Gigafactory, has begun production.
In addition, in order to reduce dependence on external suppliers, in September 2020, Tesla has announced the development of a 4680 electrodeless ear battery with a height of 80mm and a diameter of 46mm.
(4680 Battery Concept)
On an October 2021 earnings call, Tesla said it expects to deliver a 4680-battery car in 2022. However, this news does not mean "parting ways" with suppliers. "We intend to increase, not decrease, purchases of batteries from Panasonic, LG Chem and the Ningde era." Musk tweeted that he hopes to work with existing suppliers to increase 4680 battery production.
According to foreign media reports, Panasonic may be a supplier of Tesla's 4680 batteries, and has planned to invest in the construction of related production lines, as soon as 2023 for Tesla supply. In addition, there is news that LG may also become a 4680 battery supplier.
BMW's financial director Nicholas Peter has said that the reason why BMW did not choose to build its own battery factory is that it does not know which technologies will be applied to batteries in the next 5-10 years.
Once Tesla officially enters the battery industry, it will not only increase the investment in research and development in response, but also face the risk of choosing the wrong technical path. Therefore, the way of self-research + supply chain OEM is more stable.
It is worth mentioning that Tesla has a specific business in the field of energy storage and achieved revenue, Musk has also said that energy storage will be an industry that grows more than cars, and the research on batteries, especially batteries, can help the development of energy storage business.
Credit Suisse analyst Dan Levy said four major factors, including capacity increases, gross margins, new batteries and production plans, will affect the future growth trajectory of Tesla stock. But despite Levy's optimism about Tesla's future, he still rates Tesla's stock as "holding" because he thinks it's overvalued. As of press time, the stock's price-to-earnings (P/E) ratio for the past 12 months was 325.37.
But electric cars are, after all, a market where the gods fight.
A recent report by Bank of America's research team noted that even if EV sales jump from 1 million in 2021 to 3 million in 2024, Tesla's market share in electric vehicles will fall from 69% in 2021 to 19% in 2024.
Price for volume will eventually pass Automatic driving into the core competitiveness
The penetration of new energy vehicles is strengthening. In 2021, China's total sales of new energy vehicles rose by nearly 160% year-on-year, and the penetration rate of new energy vehicles in January-December was 14.8%, and the penetration rate in December even reached 22.8%.
Xiao Liwei also increased significantly in sales, and Xiaopeng rewrote the sales ranking of "Three Musketeers" with nearly 3 times the growth, and its sales also reached the 100,000 mark.
Just like Tesla's path, scale is getting better, and the product innovation experience is on the agenda - autonomous driving is becoming the next wave of competition in the industry.
According to the research report of Ping An Securities, the first round of new car-making forces mainly cut from electrification, with a clear and accurate positioning, attaching importance to user experience and attaching importance to the development of software and hardware capabilities, Xiao Liwei won the stage to become the current head of the new car-making forces. However, the competitive core of the new forces of the second round of car manufacturing has shifted from electrification to intelligence, and it is not so difficult to simply build an electric car, and the performance of software-defined cars is more prominent.
In terms of automobile intelligence, the performance of new domestic automobile forces is also more prominent. According to reports, Xiao Weili has embedded radars and chips that can be used for L4-level autonomous driving capabilities in the launch plan of its new products.
Recently, the new forces of the second echelon of car manufacturing have also strengthened intelligence. On January 26, Jidu Automobile, which has just completed a financing of $400 million, said that it will increase the introduction and training of cutting-edge talents in related fields such as high-level automatic driving, smart cockpit, and intelligent manufacturing. Nezha Automobile, which was rumored to be listed in Hong Kong, said in June 2021 that it would "saturate the investment of tens of billions of people in the project" to improve its autonomous driving capabilities.
As autonomous driving is in full swing in China, new automotive forces and traditional car companies may be able to compete with Tesla at this race point, and even hope to surpass.
On the other hand, although traditional car companies have been leading in sales and "explosive models" continue, a very important problem is that many traditional car companies rely on low-cost small new energy vehicles with no intelligent progress level, even if BYD, which performs better in traditional car companies, is relatively slow to make new car manufacturers.
However, it is not impossible for traditional car companies to quickly catch up with the "shuttle" of automatic driving.
On the one hand, it can rely on its own strong capital capabilities to incubate, such as Great Wall Motors, which has incubated Hive Energy and Millima Zhixing in terms of new energy and intelligence. On the other hand, giving full play to the advantages of vehicle manufacturing in car companies, and "strong alliance" with autonomous driving software service providers, such as Intel announced that its autonomous driving company Mobileye has cooperated with Volkswagen, Geely Automobile and Ford to develop new technologies for autonomous driving.
From this point of view, although in the short term, the increase in the penetration rate of new energy is better than that of traditional car companies with impulse, at the moment when new energy vehicles enter intelligent competition, the core of market competition will eventually return to the intelligent level represented by automatic driving. For Tesla, after entering the intelligent battlefield, it will face more fierce competition.
*Images are from the Internet