Tesla's sales in China "flash crash" The smart car revolution is happening
Tesla's sales "plummeted" and Wall Street stock prices "crashed"
Tesla's market share fell to around 6.7% as China's new energy vehicle market was unprecedentedly fierce, according to Bloomberg's calculations based on data from the China Passenger Car Association, compared to 10.5% in the first quarter of last year, as China's new energy vehicle market competition is unprecedentedly fierce. Although the China Passenger Car Association did not provide a breakdown of local deliveries and exports of Tesla's Shanghai-made vehicles in March this year, data for the first two months of 2024 showed that Tesla's market share was about 6.6%, down sharply from 7.9% in the same period last year.
According to Tesla's production and delivery report for the first quarter of 2024, Tesla delivered a total of 386,810 vehicles worldwide, far below the previous average expectation of 449,080 vehicles. This is the first time Tesla has fallen below the 400,000 mark since the third quarter of 2022, and it is also the first year-on-year decline since the second quarter of 2020, a decrease of more than 8.5% compared with the delivery of 422875 vehicles in the first quarter of last year. Among them, in 2023, Tesla will deliver 1.809 million vehicles in China. Of these, 947,000 units were produced at the Shanghai plant and 603,000 units were delivered in China. With production accounting for more than 50% and delivery accounting for about 1/3, the importance of the Chinese market to Tesla is self-evident.
Wall Street reacted strongly to the decline in Tesla's sales in China. Before the market on April 2 (Tuesday), Eastern time, Tesla's share price fell 4.9% on the 2nd, and its market value evaporated by 27.36 billion US dollars, or about 198 billion yuan. Throughout the first quarter, Tesla's stock price fell 29%, the largest quarterly decline since its IPO in 2010. Some media used "Tesla's sales 'flash crash'" in the headline to describe Tesla's "disaster".
Tesla launches "zero interest" in China
Specifically, Tesla produced 412376 Model 3 and Model Y in the first quarter, with 369783 deliveries, while other models (Model S/X) produced 20,995 units and delivered 17,027 vehicles. It is worth noting that before the delivery report was released, Tesla raised the price of all Model Y models by $1,000 in the U.S. market. In the Chinese market, Tesla also raised the price of the Model Y long-range version and high-performance version by 5,000 yuan earlier this week, and the current prices of the Model Y long-range version and high-performance version are 304,900 yuan and 368,900 yuan respectively.
However, on April 3, Tesla China officially announced the launch of a limited-time low-interest replacement policy for Model 3/Y models, and launched a preferential policy of "zero interest" installment purchase for the first time. In fact, in January this year, Tesla began to continuously adjust its prices in China, with the Model 3/Y rear-wheel drive version and the long-range version being reduced by 6,500 yuan to 15,500 yuan, and on February 1, less than a month after the official price reduction, Tesla announced again that it would offer limited-time offers. On March 1, Tesla officially announced a triple discount.
Industry Analysis:
Tesla data "an absolute disaster"
As for the reasons for the collapse in sales, Tesla explained that production of the Model 3 model at its Fremont, California, plant is still in its early stages, and that our factory is also facing closure. In addition, in January, the outbreak of the Red Sea crisis interrupted Tesla's supply of parts and temporarily suspended production at its factory in Berlin. In March, environmental activists set fire to infrastructure near the same factory, depriving Tesla of sufficient operational capacity and again halting production.
"The difference between deliveries and production means that Tesla has about 46,000 units in stock, which means that Tesla may have serious demand issues in addition to the known production bottlenecks at its Fremont and Berlin plants," Deutsche Bank analyst Emmanuel Rosner wrote in a note. Daniel Ives, managing director and senior equity analyst at Wedbush, said that we expected Tesla's first-quarter deliveries to be terrible, but the actual numbers were simply "an absolute disaster." The analyst believes that for Musk, this is a pivotal moment for Tesla, otherwise there will be some darker moments ahead, which could disrupt Tesla's long-term narrative. ”
The smart car revolution is taking place in China
However, Tesla is also facing stiff competition from domestic EV makers in the Chinese market. Previously, in line with the thinking of surprising the world, Tesla realized a series of subversive concepts for the automotive industry at that time, such as supercharging, high-level autonomous driving, handling beyond ordinary new energy models, and production process reform to reduce costs. The product has already been launched and has become a benchmark in the industry, but its proud Model 3 and Model Y have been released for the first time before 2020 and have only minor updates since then. At the same time, a series of competitors such as domestic BYD, NIO, Xpeng, Li and now Xiaomi have launched more high-tech performance and more eye-catching models. Among them, BYD has a particularly rich number of models, including the Seagull hatchback, Yangwang U8 and so on.
Xiaomi Group officially delivered its first smart electric vehicle, SU7, on April 3. Lei Jun, the founder of Xiaomi, revealed that SU7 has received more than 100,000 orders, and the number of locked orders has also exceeded 40,000. According to Bloomberg and Reuters, Xiaomi SU7 ushered in its first trading day four days after the press conference, and the stock price soared 16% on April 2, and then narrowed its gains, closing up nearly 9%, hitting a high in more than three months. According to Reuters, Lei Jun said at the delivery ceremony held in Beijing on the 3rd that the real transformation of smart cars has officially begun.
According to statistics, in 2023, the mainland's automobile foreign trade exports will further reach a new level, with 4.91 million vehicles exported, a year-on-year increase of 57.9%, ranking first in the world for the first time. Among them, exports of new energy vehicles totaled 1.203 million units, a year-on-year increase of 77.6%, providing global consumers with diversified consumption choices. On March 6, BYD officially started construction of its production base complex in Camasaari, El Salvador, Bahia, Brazil, which is expected to be put into operation from the end of this year to the beginning of 2025. The launch of BYD's production base in Brazil marks another acceleration of BYD's global expansion. Founded in 2014, in addition to selling electric forklifts, trucks, trucks and passenger cars in the Brazilian market, BYD Brazil has also set up a pure electric bus chassis factory, a solar panel factory, a battery factory and other factories in Brazil to meet the local market demand.
However, in the face of the continuous rise of China's new energy vehicles, different parties in the United States are increasingly wary of Chinese electric vehicles that rely on high cost performance and are loved by users. One of the U.S. Congress's plans is to impose a tax rate of more than 100 percent, including keeping an eye on Chinese companies manufacturing in Mexico. Interestingly, however, a recent Reuters report quoted Caliber's survey data showing that Tesla's U.S. potential customer base in the first quarter of this year has been shrinking, suggesting that Americans themselves may not like American cars that much. Part of the reason for this phenomenon is the personal image of its CEO Elon Musk. In the U.S., Tesla's latest Cybertruck has received mixed reviews in the market, so sales have been mediocre since its launch in December last year.
Author丨Niu Yulong, the chief writer of Shenzhen Satellite TV Direct News