Tesla, the market-leading EV brand, has been in trouble lately, encountering unprecedented challenges in terms of sales, profits, models, and market capitalization.
The Shanghai Gigafactory put Tesla on the fast track to growth, and it has since built four new factories in Berlin, Texas and other places. After more than three years of rapid expansion, Tesla's sales have declined for the first time, and profit margins, which are the envy of other car companies, have also shrunk. At present, the focus of the market is no longer on Tesla's production capacity and delivery capacity, but on how much market space the company still has.
According to Tesla's production and sales data for the first quarter of 2024, the company produced a total of 433,000 units and delivered 387,000 units, with total deliveries down 8.53% year-on-year and 20.16% quarter-on-quarter, far less than the market expectation of a minimum of 420,000 units. Judging from the data, Tesla's production is 46,000 more new cars than it sells, and from this aspect, Tesla's inventory is constantly increasing. This is in stark contrast to two years ago, when customers had to wait a while to pick up their car after payment, and now many cities can directly offer existing cars.
Tesla's main competitor, BYD, reached a historic 620,000 sales in the first quarter, continuing to widen the gap between the two companies, and other domestic new energy brands such as Wenjie, NIO, Xiaomi, etc. are also eroding Tesla's market share. According to the China Passenger Association, Tesla's total sales in the Chinese market in the first quarter were 220,900 units, down from 229,300 units in the same period last year. With the increase in the number of domestic new energy brands and the improvement of automobile technology and quality, the competitive pressure of the domestic automobile market is increasing day by day. China is the world's largest consumer market for automobiles, and the decline in sales here is a very bad sign.
Under the pressure of sales, Tesla has slashed the prices of all models globally since 2023, with individual models once cutting prices by nearly 20%. According to Wells Fargo, in the first half of 2023, Tesla's global car prices fell by an average of 12%. According to Tesla's financial report for the first quarter of this year, the company's earnings fell by 20% year-on-year.
The decline in sales performance and profits has also raised concerns in the capital markets, with Tesla's stock price down 34% this year and is now the worst-performing component of the S&P 500. Compared with the peak market value in 2021, Tesla has fallen by more than half, which will undoubtedly have a certain impact on the company's operation.
Compared with the speed at which domestic new energy brands launch new cars and upgrade iterations, Tesla's replacement is very slow. Tesla currently has four models: Model 3, Model Y, Model S and Model X, but the first two cars account for the majority of sales. The Model Y and Model X are not much different from each other in appearance, only in terms of performance, and it is easy to think of the Model 3 and Model S as the same car, although the two cars differ in size, but not much in appearance. In the past two years, Tesla has not launched a new car, which is also easy to cause aesthetic fatigue among consumers.
In addition, the price span of the four cars is very large, with a price difference of 50-700,000 yuan, which leads to limited choice for consumers, and when other brands have more suitable prices and models, they will naturally abandon Tesla. Launching new models and upgrading older models is essential to keep buyers interested and keep pricing going, but Tesla seems to be ignoring this routine in the automotive industry.
In the early days, Tesla was far ahead of other competitors in terms of new energy vehicle technology, but with the development of the industry and the acceleration of the pace of technological development by other car companies, Tesla's technology no longer has a leading edge in the domestic market, especially in the field of intelligent driving technology and interconnection. In terms of battery life, many domestic cars are also ahead of Tesla. Although it seems that Tesla's technology still has a certain degree of competitiveness, once the gap is opened in the future, the direction of the market will soon change, and companies in this field have to pay attention.
On the whole, Tesla is still at the head of the industry, occupying a large market share, but it is no longer the only one.
From another point of view, although the competitive pressure in the Chinese market has increased, Tesla's biggest advantage lies in the layout, market share, reputation and recognition of the global market, and the domestic brand has not been able to shake its position in Europe and North America in a short time.