At a time when U.S. stocks fell, Tesla rose for the seventh consecutive trading day, and the stock price has risen to more than $1,000.
Tesla shares are up 18.3 percent so far in March, on track to be Tesla's best month of performance since October 2021, when shares rose nearly 44 percent.
Barron's pointed out that the current commodity market is triggering inflation, bond yields are getting higher and higher, and the market is constantly digesting the Fed's increasingly aggressive interest rate policy, even if these factors will continue to put pressure on Tesla stocks, But Musk will continue to move forward.
1
The stock price continued to rebound
The optimism reflected in Tesla's stock price recently may be for many reasons. Prior to this, CEO Elon Musk tweeted the "Third Part of Tesla Master Plan," which will build on the "First Part" he wrote in 2006 and the "Second Part" plan he formulated in 2016, aiming to continue to break through and build smaller, lower-priced, more-than-numbered electric vehicles with better battery facilities to maintain its rapid growth.
On the other hand, investors may also be optimistic about the prospect of Tesla delivering data in the first quarter. Currently, Wall Street expects Tesla to deliver about 322,000 vehicles, up from 306,000 in the fourth quarter of 2022. The data is expected to be officially released around April 2.
On a full-year long-term plan, Tesla expects to deliver about 1.5 million vehicles in 2022, up from 936,000 in 2021, and hopes to increase production and sales at an average annual rate of 50% for the foreseeable future. To this end, Tesla opened a new factory in Berlin, Germany, on March 22, which is seen as a milestone in Musk's entry into the European car heartland, and also to some extent, it has also promoted a short-term rise in the stock price.
2
Tesla's trend is inseparable from the "China factor"
Looking back at the full year of 2021, Tesla achieved phenomenal growth. Of the 936,000 vehicles it delivered, more than 480,000 were produced in China. Barron's magazine notes that the most impressive part of Tesla's China factory is its construction speed, which saves nearly a decade or so of construction time compared to the Berlin factory and the Texas factory, respectively. In 2022, Tesla's China plant will enter its third year of operation, and 800,000 or 900,000 vehicles are expected to be produced in that year, accounting for 60% of its total global production plan.
The Chinese factory has played a huge role in promoting Tesla's aggressive expansion and sales plans, but it has also raised some negative concerns among American investors that Tesla is too dependent on the Chinese supply chain. Previously, due to the temporary shutdown and shortage of spare parts caused by the latest wave of the new crown epidemic in Shanghai, some US institutions even considered buying Tesla put options for 12 months to hedge against the short-term investment risks caused by the factory shutdown – but this is a short-term problem that Tesla has solved. Some media reported that the plant started again after a few days of shutdown.
The greater supply chain risk lies in the soaring prices of battery materials, a factor that is partially offsetting the increased demand for electric vehicles due to more expensive gasoline. As the Russian-Ukrainian conflict continues to exacerbate inflation and supply chain disruptions, the price of metal minerals used for lithium-ion battery materials has risen by about 40% this year. Citigroup analyst Jeff Chung wrote on March 15 that manufacturers have raised the price of various batteries by 27%-41% since september last year. If you take into account the change in raw material costs from year to date, the current market needs to raise prices by another 15% to 40% to maintain the profit margins of battery manufacturers
At present, this situation has greatly increased the production costs and supply chain pressure of "Teslas", and has triggered price increases in various car manufacturers. According to the information changes on Tesla's official website, the price of its models is currently about 4% to 7%. Elon Musk has said on Twitter that "Tesla has seen significant inflationary pressures in raw materials and logistics in the near future." ”
In terms of particularly scarce battery materials, Tesla is also closely dependent on China. According to relevant statistics, China's battery material production share accounts for about 80% of the global total, dominating the production of global battery materials, of which CATL (300750.China) is the world's most valuable battery manufacturer, is expected to break through the market share of 35 billion US dollars by 2022.
In addition, in terms of the vehicle sales market, as the world's largest electric vehicle market, China's electric vehicle penetration rate will account for about 15% of all new car sales in China in 2021, while the figure in the United States is only close to 5%. This has also become one of the core factors that Tesla's future performance trend is inseparable from the Chinese market.
3
A variety of factors affect full-year earnings expectations
While battery prices are soaring, the entire automotive industry is grappling with high prices for plastics, aluminum and steel. Mike Ward, an analyst at Benchmark Capital, estimated in a mid-March study that non-battery-related raw materials are collectively driving an increase in car costs by about $500.
Barron's pointed out that in general, price increases may not be a key factor affecting Tesla's stock price. After all, this is not the first price increase for Tesla or the electric car industry: in 2021, Tesla has raised prices several times, but it has not hurt the stock price. After rising more than 740% in 2020, Tesla shares are still up about 50% in 2021. However, the 2022 price increase may have some impact on its share price, as investors have recently become more wary of inflation.
In addition, it is worth investors' real attention that the chip shortage in 2021 has led to automakers tending to configure chips on high-end models, thus enabling Tesla to achieve strong bicycle profits in 2021, but the impact of the continued shortage of raw materials and inflationary effects on its subsequent profit expectations in 2022 is still an open question.
At the same time, Ford, Toyota and other manufacturers have also recently announced the challenges of raw material shortages and suspension of production, resulting in pressure on the original production plan and stock price. Toyota pointed out on March 17: "From April to June, the global average production plan is about 800,000 vehicles, in addition to semiconductor shortages, the spread of the epidemic and other factors also make it difficult to look forward to the next few months, and production plans may be reduced." ”
In addition, another negative impact on the global electric vehicle market in 2022 is that electric vehicle incentives are changing. Starting in 2022, China's EV buying incentives have declined slightly; U.S. EV buyers are still waiting for some of Biden's un-passed Infrastructure Rebuilding Act.
The common factors that these electric vehicle industries are currently facing are also likely to affect Tesla.
Text | Sun Yixi
Edit | Kang Juan
Copyright Notice:
Original barronschina articles, not reproduced without permission.
(This article is for your informational purposes only and does not constitute the provision or reliance of investment, accounting, legal or tax advice.) ）
Add stars and don't get lost
Dots, likes and looks are all here!