China data in Tesla's annual report: the biggest contributor to the increase in profit margins Sales have doubled year after year

Financial Associated Press (Shanghai, editor Shi Zhengcheng) news, the world's electric vehicle leader Tesla recently submitted a 10-K form to the US SEC, elaborating on the company's business details in 2021, which naturally has a lot of space to mention the Chinese market and Shanghai super factory.

According to the search, Tesla mentioned "China" a total of 45 times in this annual report, second only to the base of the United States, and the number of mentions of "Shanghai Gigafactory" reached 34 times, almost double that of the Fremont Gigafactory in California, which is enough to show the importance of China's manufacturing center to the global electric vehicle leader.

Demystifying the fact that profit margins have not fallen but have risen: the Shanghai factory is the main reason

Tesla disclosed in the 10-K table that the gross profit margin of the overall automobile business rose to 29.3% in 2021, further higher than 25.6% in 2020, which is not only several times that of the old car companies GM and Ford, but also has an advantage over some new car-making forces. In the annual report, Tesla also bluntly said that the main reason for the increase in gross profit is that in addition to the increase in sales, the increase in production and the decline in costs of the Shanghai Gigafactory constitute an important positive.

According to the company, the cost of unit production of model 3 and Model Y "significantly decreased" during the year against the background of rising costs caused by tight raw materials, commodities, logistics and supply chains due to procurement and manufacturing in China. Tesla also said that in the future, it will further increase the proportion of local procurement and local manufacturing in Shanghai Gigafactory.

As of the date of the company's annual report, the Shanghai Gigafactory is still Tesla's only mass production plant outside the United States, but Tesla's Gigafactory in Berlin is already in state of equipment commissioning and is expected to be able to enter mass production in 2022 together with the Texas plant in the United States. According to the data disclosed by the company, the Berlin and Texas factories initially only have Model Y production lines, which means that in 2022, a large number of Model 3s will still depart from Shanghai port and sail on the streets of dozens of countries in Europe

(Source: Tesla Form 10-K)

According to data released by the Association in early January, Tesla's Shanghai Gigafactory delivered a total of 484,100 vehicles, of which one-third were delivered to overseas markets. According to Tesla's 936,000 vehicles delivered in 2021, the Shanghai plant accounted for more than half of the deliveries.

Local sales in China have doubled year after year

According to Tesla's annual report, Sales in China reached $13.844 billion in 2021, double the $6.662 billion in 2020, after sales of $2.979 billion in 2019. The electric vehicle giant's revenue in the United States last year reached $23.973 billion, up 57.64% year-on-year.

It should be noted that Tesla's revenue in China is also an important indicator. According to the company's 2018 agreement with the Shanghai government, Tesla needs to invest 14.08 billion yuan in the Shanghai gigafactory over five years, in addition to 2.23 billion yuan in taxes paid annually from the end of 2023.

Tesla also said in its annual report that based on existing investments and sales, the company expects to be able to reach the targets set out in the agreement.