Source | Daily Economic News, the original title of "10 cities compete for Tesla's "second factory", Tesla or choose Shanghai? 》
Wen | reporter Li Shuo Li Xing Li Menglin
On May 4, according to foreign media reports, Tesla is planning to double the production capacity of the Shanghai factory by building a new factory, thus making it Tesla's largest automobile export center in the world.
It is reported that Tesla mentioned in a thank-you letter to the Lingang New Area of the China (Shanghai) Pilot Free Trade Zone that it plans to build a new factory near the current park of the Shanghai factory to expand production capacity. The new plant is expected to produce Model 3 and Model Y models with an annual production capacity of 450,000 units. The expansion of the new plant will help Tesla increase the total production capacity of the Shanghai plant to 1 million vehicles per year.
According to the data, Tesla's Shanghai factory will deliver about 484,100 vehicles (including exports) in 2021, accounting for 51.7% of Tesla's cumulative global deliveries in 2021.
As of press time, Tesla has not responded to the "Daily Economic News" reporter on this matter.
According to China Securities News, multiple sources cross-verified that Tesla has clearly planned to build a new factory near the current Lingang Gigafactory in the Shanghai factory. A few months ago, when the reporter visited the Tesla Gigafactory, he also learned that a large piece of land located about 200 meters near the current Tesla factory has been included in the planning of possible new factories in the future.
10 cities participate in the competition for Tesla's "second factory"
Since Tesla said it would build a second gigafactory in China, several cities have had scandals with the project.
Just two weeks ago, on April 24, according to the information disclosed by the Zhuhai Industrial Development Conference, the recent focus on docking new energy vehicle manufacturing projects has been preliminarily negotiated with Tesla, BYD, Xiaopeng Automobile and Premium Car, to explore the possibility of cooperation, and actively promote bydding byBYD Electronics, Xinwei Communications, Leybold Hi-Tech, Sinoma Lithium Film, Keheng Shares and other high-quality projects under discussion.
▲Image source: Per reporter Huang Xinlei photographed (data map)
The industry believes that the above news also released a signal that Zhuhai City wants to participate in the Tesla Gigafactory project. Prior to this, there have been 9 cities such as Shenyang, Guangzhou, Shenzhen, Qingdao, Yibin, Chongqing, Hefei, Wuhan, Xi'an and Tesla's second factory project in China.
"For Tesla, whether the local industrial chain is complete is the primary consideration of its location. Because reducing costs and maximizing profits is what all companies, including Tesla, pursue. On April 25, Cui Dongshu, secretary general of the National Passenger Car Market Information Joint Association, said in an interview with reporters that even if the local government can give the greatest policy support, if there is no complete industrial chain support, it will make the production of enterprises fall into passivity, invisibly increasing production and manufacturing costs.
Since the Shanghai Gigafactory was put into operation, Tesla's production capacity and market size in China have been rapidly increasing. According to public data, Tesla's Shanghai Gigafactory delivered a total of 484,100 vehicles in 2021, an increase of 235% year-on-year, accounting for 51.7% of Tesla's annual total global deliveries. In the first quarter of this year, Tesla delivered more than 310,000 new cars, an increase of 68% year-on-year. Tesla China's wholesale sales from January to March this year totaled about 182,200 units, accounting for 59% of Tesla's total sales. This means that nearly 60% of Tesla's global sales come from the Chinese market.
▲Image source: Daily Economic News Infographic
On a Tesla earnings call in January, Tesla CEO Musk publicly stated that the company is selecting a site for a new factory, and there may be relevant information released at the end of this year.
In the eyes of the outside world, Tesla chose to build a second factory in China because it learned from the experience brought by the Shanghai gigafactory, that is, the closer it is to the local market, the more beneficial it is to production. At the same time, localized production is more conducive to its cost control.
"The main consideration for OEMs in choosing factories to settle in cities is whether the local industrial chain is perfect, whether the market demand is strong, and the size of the support policies given by local governments, including land and taxation." In February this year, Shi Jianhua, deputy secretary-general of the China Association of Automobile Manufacturers, said in a telephone interview with reporters.
Tian Yongqiu, an analyst in the automotive industry, said in a telephone interview with reporters that the introduction of good enterprises will drive a number of relevant industrial chain supporting enterprises for the local government to settle in. The gradual improvement of supporting enterprises in the relevant industrial chain will also attract more enterprises and talents to enter and improve the local employment rate, thus forming a positive circular effect and boosting the rapid development of the local economy.
In Tian Yongqiu's view, the location of Tesla's second factory in China will mainly consider three factors: one is the convenience of geographical location, assessing whether it is convenient for its export and sales; second, whether the local industrial chain is perfect; third, whether the preferential policies given by the local government are sufficiently attractive.
Tesla's net profit in the first quarter increased by 255%
After the US stock market on April 20, local time, Tesla announced its first quarterly financial report. Despite the impact of the new crown epidemic and the supply chain crisis, Tesla's revenue and net profit still significantly exceeded market expectations and continued to reach a record high.
Specifically, Tesla's first-quarter revenue was $18.756 billion, up 81% year-on-year, higher than analysts' expectations of $17.92 billion; first-quarter non-GAAP net profit was $3.736 billion, up 255% year-on-year, and earnings per share (EPS) was $3.22, up 246% year-on-year, higher than analysts' expectations of $2.27.
It is also worth noting that Tesla earned $679 million in the first quarter through the sale of carbon credits, an increase of more than 116% over the previous quarter, ahead of new energy vehicle competitors.
The eye-catching results pushed Tesla's stock price up 7.8% after hours and 5.28% as of press time. So far this year, due to supply chain factors, Tesla's stock price has fallen by 7.5%, but it is still better than auto giants such as General Motors and Ford, which have fallen by 29% and 23% respectively.
Tesla attributed the first quarter results to an increase in deliveries and an increase in average selling prices. Tesla delivered about 310,000 vehicles in the first quarter, up 68% year-on-year and slightly up from 309,000 units in the fourth quarter. However, Tesla warned that the shortage of key components such as chips caused by bottlenecks in the global supply chain will continue to affect Tesla's production capacity.
"With supply chains becoming a major constraint, our plants have been operating at below-capacity levels for several consecutive quarters, and this is likely to continue for the rest of 2022." Tesla said in a letter to shareholders.
Despite supply chain uncertainties, as Tesla's new factories open in Berlin, Germany, and Austin, usa, in late March and early April, Musk said on a conference call that Tesla had reason to achieve a 60 percent delivery growth rate this year.
Morgan Stanley analyst Adam Jonas expects Tesla to deliver 1.46 million vehicles in fiscal 2022, up 56 percent from 2021.
In addition, Tesla also said that it is developing a customized Robo Taxi self-driving taxi, which will neither configure the steering wheel nor install the foot pedals. Tesla hopes to achieve mass production of Robo Taxi in 2024, which will become a "huge driving force" for Tesla's growth.