At the moment when the industry is shutting down, costs are rising, supply is tight, and the market is sluggish, Tesla is still soaring - Q1's revenue and profitability have both increased significantly, and many data are better than market expectations. In 2022, Tesla, which has no new product releases, will shift its focus to production capacity. In the end, can Tesla complete the production capacity test? Can we use this to cope with the challenges from new domestic forces and traditional car giants?
Author | Pan Tao Edited | Luo Lijuan
On April 21, Beijing time, Tesla released its 2022 Q1 financial report. Judging by a number of metrics such as revenue, car deliveries, and operating margins, Tesla seems to have spent a record quarter.
Two days before the earnings report, Tesla's Shanghai Gigafactory had just resumed work and production — before that, the plant had been shut down for about three weeks.
Tesla CEO Musk praised this, "Thanks to the Tesla team, especially the Chinese team and the Shanghai Gigafactory, in the face of severe challenges such as the epidemic, they still produce high-quality products, and the factory has resumed production." ”
But he also mentioned on the earnings call that due to the suspension of production, the number of mass production in Q2 will be similar to that of Q1, but Q3 will be much higher, "now look, the probability of achieving 1.5 million production this year."
Tesla has also invested a lot of energy in the production of independent batteries, the procurement of raw materials and the diversification of suppliers. Especially the much-watched 4680 battery. "If everything goes according to plan, the Q3-Q4 could mass-produce 4680 batteries." Tesla said.
According to Tesla's official data, the range of the vehicle after the battery can be increased by 16%, and the cost can be reduced by 14%.
For Tesla, in 2022, when there is no new car release, expanding production capacity is the core of the decision.
In the past two months, Tesla's gigafactories in Berlin and Texas have started deliveries. Tesla, which was once suffering from a ramp-up in production capacity, is now turning production capacity into a weapon for its own attack.
"What we expect is [production] 20 million per year, so basically we've only achieved 5% and there's a lot of room for growth." Musk said.
1
Selling cars "banknote ability"
Tesla's financial performance is enough to make all new cars envious.
In Q1 2022, Tesla's total revenue reached $18.756 billion, up 81% year-on-year. Tesla said revenue growth was driven by higher car deliveries, higher average selling prices and growth in other businesses.
In terms of deliveries, Tesla delivered a total of 310048 vehicles in Q1 this year, of which the Model 3 and Model Y delivered a total of 295324 vehicles, and the Model X and Model S delivered a total of 14724 vehicles. Q1 alone is more than the total delivery volume of "Wei Xiaoli" plus one piece in 2021.
Car delivery source: Tesla
It is worth mentioning that Tesla's global average inventory cycle fell by 63% year-on-year, only 3 days. The efficiency of transfer and the degree of sought-after can be seen.
In the past year, in order to alleviate users' energy replenishment anxiety and stimulate sales, new car-making forces have spared no effort to lay out offline charging facilities.
Tesla is no exception, as of now, in Chinese mainland it has built and opened more than 1100 superchargering stations, 8500 superchargering piles, as well as more than 700 destination charging stations and more than 1800 destination charging piles, covering more than 370 cities and regions.
In the case of many new forces still mired in losses, Tesla's ability to make money is more prominent.
According to the earnings report, Tesla's GAAP operating profit increased to $3.6 billion this year, with an operating margin of 19.2%, which was achieved in the case of a 2018 CEO equity incentive of $48 million. Increased car deliveries, higher average selling prices, and controlled bike costs under inflationary pressures have led to a significant increase in Tesla's operating profit.
Q1, Tesla's GAAP net profit was $3.3 billion, non-GAAP net profit (excluding share-based expenses) was $3.7 billion, and total debt excluding automotive and energy product financing fell below $100 million.
This is already the 11th consecutive quarter of Tesla's profitability.
Auto gross margin is a key factor in measuring the maturity of a car company. Last Q4, Tesla's gross profit margin climbed to 30.6% has shocked the industry, and this year's Q1, the data increased by 32.9%. If calculated according to the selling price of 300,000 yuan per bicycle, tesla will have a gross profit of nearly 100,000 yuan for every car sold.
Source: Tesla Q1 earnings report
In contrast, the gross profit margin of "Wei Xiaoli" is still far from the same, even if the ideal of the highest gross profit margin of the automobile, its 2021 data is only 20.6%. In 2022, improving the gross profit margin of the whole vehicle may be the key battle for "Wei Xiaoli" to catch up with Tesla.
In terms of new products, Tesla in 2022 is slightly lackluster, and there will be no new car releases this year, but Musk still revealed some of the development.
"We're also working on new cars, the dedicated Robotaxi model, a model that's highly autonomously optimized, with no steering wheel, no pedals, and a lot of exciting innovations; but the core is optimising for the 'cost per kilometer' and achieving the lowest cost. Musk revealed that the model is expected to achieve mass production in 2024, which is crucial to Tesla's financial growth.
2
Capacity is more important than product
2022 is a big year for new energy vehicle products, "Wei Xiaoli" has new products on the market, Xiaopeng's G9, the ideal L9, Weilai in addition to the delivery of ET7, ET5, including ES7, including ES7 this year will have three new models will be launched and delivered.
In China, the electric vehicle market is rapidly maturing at a speed visible to the naked eye.
According to the data of the Association, the domestic retail penetration rate of new energy vehicles in 2021 was 14.8%, of which the penetration rate in December reached 22.6% at one point, which was significantly higher than the penetration rate of 5.8% in 2020.
In the face of such a hot market, maintaining a certain frequency of innovation is a common means for car companies to stimulate sales. However, the pace of Tesla in 2022 seems to be different.
Musk made it clear on the earnings call in Q4 2021 that Tesla will not launch any new cars to the market in 2022.
Wei Xiaoli "At the same time as the arms race was started, why did Tesla press the pause button?"
"The problem we face is not limited demand, but limited capacity." Musk responded.
On January 7, 2020, the domestic Model 3 produced by Tesla's Shanghai factory was delivered for the first time, and Musk's awkward dance on the stage was impressive.
In March, Musk couldn't help but dance again, but this time in Berlin, Germany, to celebrate the plant's successful delivery of the first Model Y. After the delivery ceremony, Musk also sent a Special German tweet: Danke Deutschland (thank you Germany)!
The first Model Y delivered at the Berlin Gigafactory Source: Tesla
Immediately following the Berlin plant, Tesla's Gigafactory in Texas, USA, was officially put into operation in April. This means that Tesla already has 6 gigafactories in the world, and its production capacity layout spans three continents: North America, Asia and Europe.
According to Tesla's plan, the factories in California, Shanghai, Berlin and Texas will be mainly responsible for the manufacture of complete vehicles, while the Nevada and New York factories will be responsible for the production of battery packs, charging piles and solar roofs.
In terms of production capacity, the Berlin and Texas plants have an annual production capacity of 500,000 vehicles, mainly producing Model Y; the California plant is 600,000 units, model X and Model S are 100,000 units, model Y and Model 3 are 500,000 units; the Shanghai plant last year's production capacity was about 500,000 units, and the plant is currently expanding production to 1.1 million units.
Based on this calculation, Tesla's maximum production capacity will reach 2.7 million vehicles, but considering the ramp-up capacity and some uncertainties, the actual production capacity will be less than this figure.
Tesla has previously said that the Berlin factory will eventually employ more than 12,000 people, and there are still hundreds of vacancies for engineers, operators and managers waiting to be filled.
Musk revealed capacity-related data during the earnings call, saying Tesla should be able to produce 1.5 million vehicles in 2022.
In fact, in the past 2021, Tesla has already experienced a "production capacity" great leap. In the whole year of 2021, Tesla delivered a total of 936222 vehicles, close to the million-vehicle level, an increase of nearly 90% over the 499647 in 2020.
Tesla said earlier this year that it expected an average annual growth rate of 50% in vehicle deliveries over the next few years. According to this calculation, Tesla's production capacity demand will be around 1.4 million units in 2022.
Now that 6 gigafactories are in hand, Tesla's production capacity cannot be underestimated.
3
Fight on all sides
In 2021, Tesla set a record, becoming the world's first car company with a market capitalization of trillions of dollars. The huge demand in the Chinese market is indispensable.
But while soaring, Tesla still faces competition and challenges.
In China, in 2021, the new force "Wei Xiaoli" also handed over a gratifying report card, the annual delivery volume has approached 100,000 vehicles, Xiaopeng is only one step away, the annual delivery of 98155 vehicles, an increase of 3.6 times.
Among them, in terms of production capacity, in October last year, WEILAI launched a transformation of the production line of the Jianghuai Hefei plant, and after the completion of the transformation, its production capacity can be increased to 300,000 vehicles by increasing the frequency. The second plant, Hefei Xinqiao Intelligent Automobile Industrial Park, which is still under construction, is expected to start operations in the third quarter of this year.
At present, "Wei Xiaoli" has successfully landed on the capital market, has sufficient cash in hand, and has begun to fill the shortcomings by rhythmically releasing new products.
Xiaopeng and Ideal continue to deepen high-end and enhance brand influence. For example, the Xiaopeng G9 and The Ideal L9, which will be delivered in the second half of this year, are positioned in high-end SUVs, and the starting price of the Ideal L9 is as high as 450,000 yuan.
While continuing the luxury strategy, Weilai moderately lowered in price, and the ET5 released at the end of last year, if the battery rental scheme is adopted, the price before subsidies is only 258,000 yuan. This has taken a big step for Weilai, which once sold an average price of more than 430,000 yuan. Deliveries of this product are expected to start in September this year.
Behind "Wei Xiaoli" are new power brands such as Nezha and Zero Run, as well as traditional car companies that have accelerated their transformation.
IN PARTICULAR, BYD announced on April 3 that it has stopped the production of fuel vehicles from March 2022 according to the needs of strategic development, and will focus on pure electric and plug-in hybrid vehicles in the automotive segment in the future.
ASD thus became the first car company in the world to officially announce the suspension of fuel vehicles.
The increasingly lively new energy track has brought more new products to the market and more choices for consumers; but for car companies, it means that the relatively loose competition pattern in the past will become crowded.
Whether Tesla can withstand the impact of new local forces is unknown, and in addition to this, there are tigers from traditional giants.
In Europe, about 100 miles east of Tesla's Berlin plant, it is where the headquarters of German auto giant Volkswagen are located.
According to eu-evs data, in 2021, Volkswagen ranked first in the list of electric vehicle sales in 11 European countries, with a total of 124,389 units sold, with a market share of 14.6%, higher than Tesla, which ranked second with a market share of 13.6%. In Q1 this year, Volkswagen's momentum remained fierce, with earnings reports showing that its all-electric vehicle deliveries rose 65% to 99,000 units.
In the era of fuel vehicles, Volkswagen called the wind and rain, and now in the process of transition to new energy, Volkswagen has also accelerated. In March 2022, volkswagen group supervisory board just passed a resolution to invest $2 billion to build the "Trinity" project, which will be comparable to Tesla's production efficiency.
In the US market, Tesla has always been the absolute protagonist in the spotlight, but since last year, with the successful listing of two emerging forces, Rivian and Lucid, the electric vehicle market has begun to have more suspense. At present, both companies have started deliveries and are accelerating the expansion of production capacity.
Putting aside these competitions, the automotive industry also faces some uncertainties, such as the new crown epidemic, battery supply and other factors, which will drag down automobile production.
On April 14, He Xiaopeng posted on Weibo, "If the supply chain companies in Shanghai and the surrounding areas cannot find a way to dynamically resume work and production, all Chinese automakers may have to stop work and production in May." Subsequently, Yu Chengdong, CEO of Huawei's consumer business and CEO of smart car BU, also posted in the circle of friends that if Shanghai cannot resume work and production, all technology/industrial industries involving Shanghai's supply chain after May will be completely shut down, especially the automobile industry.
Tesla's Shanghai factory stopped production for two days on March 16 and 17, and then continued to stop production from March 28, and officially resumed work and production on April 19.
In addition, like chips, the problem of batteries has become a stubborn problem in the tram industry, not only the price is affected by upstream raw materials, but its production capacity is also very tight. In order to ensure supply, since this year, Xiaopeng and Weilai have spread the news of expanding new suppliers. On the Q1 conference call, Tesla also said, "We still have some inventory of batteries, which supports us to complete our 2022 sales target."
As for the mass production of the 4680 battery, it will affect Tesla's future production goals more.
The Texas Gigafactory, which went into operation in April, has delivered the first cars equipped with 4680 self-developed cells, one-piece die-cast front body and structural batteries, and the Berlin plant will also produce model Y in the future using structural battery packs from 4680 cells and non-structural battery packs from 2170 cells.
Is the application of new technology a gimmick, or Tesla's next milestone? The answer was soon revealed.