Another 520 billion evaporation! Tesla's worst performance in 4 years, Musk said...
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For the full-year sales target, Tesla still insists on 1.8 million vehicles. But for growth, Musk also spoke of "soft words".
Reporter丨Liu Yang Liu Xiaomeng
In the third quarter, gross margin fell below 18% and net profit fell 44%. This Tesla earnings report, which has the worst ability to make money in four years, made Musk a little disappointed.
On October 19, Tesla released its financial report showing that in the third quarter of this year, although revenue rose again, a year-on-year increase of 9%, the growth rate slowed down. At the same time, gross margin declined more than expected, and net profit fell. Tesla attributed the "discoloration" of its earnings report to the high interest rate environment and insufficient utilization of new factories, but old problems such as slow release of market demand after frequent price cuts still exist.
In the conference call after the earnings report, Tesla CEO Elon Musk was quite restrained, although he still insisted on challenging the annual delivery target of 1.8 million vehicles, but began to play "preventive shots" on issues such as FSD and Cybertruck.
Gross margin "pull alert"
On October 19, Beijing time, Tesla's stock price fell by more than 9%, its market value lost about 71.6 billion US dollars (about 523.3 billion yuan), and Musk's net worth shrank by about 13.349 billion US dollars (about 100.081 billion yuan). This is Tesla's second consecutive day of sharp decline, yesterday the company's market value lost 38.6 billion US dollars (about 282.4 billion yuan) overnight.
On the news, the financial report shows that in the third quarter of this year, Tesla's revenue was $23.4 billion, a year-on-year increase of 9%. While revenue increased year-over-year, it declined 6% sequentially, below market expectations and the slowest revenue growth in three years. Before the earnings report, Wall Street expected Tesla's third-quarter revenue of $24.256 billion. From the perspective of revenue structure, Tesla's revenue in the third quarter fell month-on-month, mainly affected by the automotive business. Among them, Tesla Motors business revenue was $19.625 billion, and revenue in the second quarter of this year was $21.268 billion.
Image source: Sina Weibo @Tesla screenshot
From the profit side, Tesla's situation is not optimistic. In the first quarter of this year, Tesla's net profit fell by more than 24% year-on-year, which once attracted attention. However, Tesla's net profit increased to $2.7 billion in the second quarter, a year-on-year increase of more than 20%, and the situation improved. However, it fell again in the third quarter, with net profit of $1.853 billion, down 44% year-on-year.
In addition, in the third quarter earnings report, Tesla's gross profit margin was also focused on. In the third quarter of this year, Tesla's overall gross margin was 17.9%, lower than market expectations. In contrast, the gross margin in the second quarter of this year was 18.2%, and Tesla's gross margin has continued to decline since the third quarter of last year.
Although the operating value is not satisfactory, Tesla's energy storage sector has become a bright spot. According to the financial report, in the third quarter of this year, Tesla's energy production and storage revenue reached $1.559 billion, a year-on-year increase of 40%, and the installed capacity of energy storage products increased by 90% year-on-year, reaching 4GWh. Tesla related people said: "Tesla continues to promote charging 'new infrastructure', laying out more than 50,000 superchargers and nearly 5,600 supercharging stations around the world, forming the world's largest supercharging network so far." ”
Succeed or break Cybertruck
Regarding Tesla's current operating situation, Musk explained: "Due to the lack of utilization of new factories, the upcoming Cybertruck pickup model, and the expenditure of artificial intelligence and other projects, resulting in increased operating expenses, its profit margin has been hit. ”
In 2019, Tesla released the Cybertruck, which is known as the most concerned Tesla model outside the Model 3, and is also known as Tesla's future market "grabber". However, due to a number of reasons, the Cybertruck has been delayed. In April, Musk made it clear that the Texas Gigafactory would be responsible for the production of the Cybertruck, Semi and the second-generation Roadster 2.
In the third quarter earnings call of this year, Tesla announced that the first batch of Cybertrucks is scheduled to begin deliveries at the Texas Gigafactory on November 30 this year. Although the specific price of the model has not yet been announced, Tesla revealed that more than 1 million people have subscribed to the Cybertruck.
However, when asked about the delivery expectations for the Cybertruck, Musk changed his previous high profile and gave a conservative estimate. "It was very difficult to raise production, there was nothing to copy, and everything about the production of this car had to be invented from scratch. In the future, Cybertruck will deliver about 250,000 vehicles a year, but it will not be possible next year, and it will not be possible until sometime in 2025. Musk admits that achieving positive cash flow for Cybertruck is the most difficult step, and it will take 12-18 months for Cybertruck to become an important contributor to positive cash flow. On the call, Musk's remark "I want to lower expectations for Cybertruck, we're digging our own graves with Cybertruck" elicited laughter from executives around him, but it didn't look like a joke.
It is worth mentioning that Tesla also bluntly said that reducing costs is still the focus. Tesla revealed that in fact, the goal of the third quarter is still to cut the average cost per vehicle, generate positive free cash flow, while maximizing deliveries and continuing to invest in growth projects such as AI. It is reported that Tesla's cost per vehicle in the third quarter was $37,500. Tesla said that "although the production cost of the new factory is still higher than that of the old factory, we have implemented the necessary upgrades in the third quarter to further reduce the cost of bicycles."
Boosting demand remains an old problem
Compared with the profit problem, the outside world is more concerned about Tesla's gross margin and revenue, and the change in this data also points to Tesla's market demand.
Although it has experienced many rounds of price reductions, Tesla's sales in the third quarter of this year have not significantly improved. Data show that in the third quarter of this year, Tesla's global sales were 435,100 vehicles, down 6% from the previous month. Although Tesla explained that the main reason for the decline in deliveries was the shutdown of production capacity due to the upgrade of key facilities. However, market research company Cox released a report showing that electric vehicle sales in the US market exceeded 300,000 for the first time in the third quarter of this year, but Tesla's market share fell to an all-time low.
In addition, according to data from information service company Experian, Tesla still occupies more than half of the market share, but it has shown a steady downward trend in the past three years, far less than the 79.4% in 2020. Musk said: "The vast majority of people are loan car buyers, but as interest rates rise, it becomes harder and harder to buy cars, and high interest rates will weaken demand." People want us to advertise, Tesla is doing some advertising, and advertising needs to pay off. But if people can't afford a car, advertising won't help, it's all that matters. ”
Although Musk attributed the demand problem to high interest rates, Tesla is not only shrinking its market share in the United States, but also experiencing a certain decline in the Chinese market. According to data released by the Passenger Vehicle Market Information Joint Conference, Tesla's sales in September this year were 43,500 units, down 43.9% year-on-year. Yan Jinghui, a member of the expert committee of the China Automobile Dealers Association, believes that the current competitiveness of China's new energy vehicle market is heating up, from the independent brand "small" to the comprehensive layout of new forces in products, which has further eaten Tesla's market share.
For the full-year sales target, Tesla still insists on 1.8 million vehicles. But for growth, Musk also spoke of "soft words". "A lot of factors are changing, especially macroeconomics. Our focus is on achieving volume growth in a cost-effective manner. Better updates will be provided in the fourth quarter. Musk said Tesla can't keep 50% growth forever, but it will grow much faster than any car company in the world.
It is worth noting that on the same day as the earnings report, the Tesla Model 3 new version was officially launched in the Chinese market. Tesla related people revealed: "Tesla will start the first batch of vehicle deliveries at the end of October, and the test drive will arrive at the store at the end of the month." In the view of Cui Dongshu, secretary general of the Passenger Association, Tesla also hopes to boost a wave of sales before the end of the new car launch and delivery in the fourth quarter.
Editor丨Wang Naixin
Picture丨Beijing Business Daily, Tesla official website screenshot, Sina Weibo @ElonMusk, Sina Weibo @Tesla screenshot, Visual China, OneImage