In Musk's words, Tesla rose by 400 billion

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2024-04-24 12:30Posted in Beijing Science and Technology Creators

In Musk's words, Tesla rose by 400 billion

"We have updated our lineup of future vehicles, and we will accelerate the launch of new models, including cheaper models, ahead of the previously stated production date of the second half of 2025. ”

In the financial report for the first quarter of 2024 released in the early morning of April 24, Beijing time, Tesla once again updated the timetable for the launch of new models. During the earnings call, Musk further said that the new model may be unveiled in early 2025 or even late 2024.

Encouraged by the above news, Tesla's stock price rose more than 13% after hours. Based on the closing market value of $460.8 billion on the day, Tesla soared by nearly $60 billion (about 433.9 billion yuan) in one day.

In addition to pushing the stock price up, Musk's spoilers about the new model are also another counterattack to the previous media revelations.

In early April, foreign media reported that Tesla's top management canceled the development plan of the low-cost model "Model 2" in February without telling employees and suppliers. At that time, Musk immediately refuted the rumors on the social network X and called it fake news.

The soaring stock price also obscured Tesla's relatively poor first-quarter earnings data: in the first quarter of 2024, Tesla's revenue was $21.301 billion, down 9% year-on-year, less than analysts' expectations of $22.3 billion, and its net profit was $1.129 billion, down 55% year-on-year.

The slight bright spot is the gross profit margin. On the basis of 17.6% in the fourth quarter of last year, Tesla's gross profit margin continued to decline to 17.4% in the first quarter, far less than the 19.3% in the same period last year, but this data exceeded analysts' expectations of 16.5%.

Cost reduction and efficiency improvement are having a positive impact on Tesla, and Tesla will continue to promote cost reduction and efficiency improvement measures in the foreseeable fiscal year 2024. A week before the earnings report, Musk announced in the form of an internal letter that Tesla would lay off 10% of its workforce, affecting nearly 14,000 people. This round of reduction in the number of employees is expected to directly save Tesla more than $1 billion.

Behind the normalization of cost reduction and efficiency increase is the growing sales pressure faced by Tesla. In the first quarter of this year, Tesla rarely suffered a decline in revenue and sales.

In the first quarter, Tesla delivered 387,000 vehicles, down 9% year-on-year, well below analysts' expectations of 449,000 vehicles, suffering its first year-over-year decline since the second quarter of 2020.

The rumored $25,000 cheap model is not only the direct engine that drives Tesla's stock price skyrocketing, but also is seen by the outside world as a weapon for Tesla to deal with the sales growth crisis.

But in addition to updating the launch schedule, Musk did not disclose more relevant information, and more suspense was left at Tesla's Robotaxi conference on August 8.

After deliveries of the Model 3 and Y, the main model, fell by 10% year-on-year, and in the first quarter, Tesla's positive growth was supported by other models, including the Cybertruck.

According to the financial report data, in the first quarter of 2024, Tesla delivered 387,000 vehicles, a year-on-year decrease of 9%, of which 370,000 Model 3/Y were delivered, a year-on-year decrease of 10%, and 17,000 other models were delivered, a year-on-year increase of 59%.

The Cybertruck, which began official deliveries in December last year, undoubtedly occupies the majority of other models. Musk, who has crawled out of the hell of Model 3 production capacity, is now facing a new delivery crisis from the Cybertruck.

"There are still challenges in ramping up capacity. According to Musk, in April, the weekly production capacity of the Cybertruck has been increased to 1,000 units.

The 4680 battery cell, a key component that restricts the production capacity of the Cybertruck, also ushered in a year-on-year increase in production capacity. "The progress is encouraging, and we can further improve our capacity by the end of the year, when production will outstrip supply and the speed of production will increase significantly. ”

Musk's latest statement on the 4680 battery also responded to the recent rumors that the project may be cut.

Musk's announcement of the layoffs comes just hours after Drew Bagrino, Tesla's vice president of powertrain and energy in charge of the 4680 battery project, announced his departure. In the new round of layoffs, Tesla's battery department was once exposed as the hardest hit area, with a layoff rate of nearly 30%.

Compared with the Cybertruck, which is still ramping up production capacity, the outside world pays more attention to Tesla's latest progress in cheap models and Robotaxi.

In addition to announcing the acceleration of production of cheaper models, Musk has spent more space painting the future of Tesla's Robotaxi network. According to the official introduction, Tesla Robotaxi has completed the engineering design and can have mass production capacity after launch.

Musk even used Airbnb as an analogy, saying that car owners who join Tesla's Robotaxi network can decide when to use their own cars and when to make money by joining their cars to the self-driving network.

In terms of FSD (full self-driving) external authorization, Tesla has also made new progress. "We are discussing a Robotaxi partnership with a major car company, and (everything) is waiting for an update on August 8. Musk said.

But when it comes to expanding to more regions, Musk still can't draw a clear timeline for Tesla's FSD. "We need to think further about which markets we can enter and whether we can deploy smoothly in those markets. It's more about regulation, we need to get regulatory approvals, and that's the case in China. ”

On April 20, in response to a netizen's post about "when will Tesla launch FSD in China", Musk said at one point on X that Tesla may soon provide FSD services to Chinese users.

FSD, which is full of uncertainty, is far from quenching Tesla's thirst in the Chinese market.

In China, the world's most competitive new energy vehicle market, as more and more car companies launch new models, the market has gradually transitioned from a state of short supply when Tesla entered China ten years ago to a new stage of oversupply.

How to attract consumers to buy their own brand cars has become the top problem for many car companies, and Tesla is no exception.

In the first quarter of 2024, Tesla's market demand problem will be further amplified. In the first three months of this year, Tesla produced 433,000 cars and delivered 387,000 cars, a difference of 47,000 vehicles.

Emmanuel Rosner, an analyst at Deutsche Bank, noted in a note: "The difference between deliveries and production means that Tesla may have serious market demand issues in addition to the known production bottlenecks at the Fremont and Berlin gigafactories." ”

At the end of February, Mercedes-Benz decided to slow down the transformation of electrification, and the goal of fully transitioning to pure electric models by 2030 was revised back to 50% electrification; Plug-in hybrid vehicles, slowing down the pace of pure electric vehicle rollouts, in October last year, Ford and General Motors, successively said that they would reduce investment in electric vehicle business and increase the development of hybrid vehicles.

Chinese automakers, which are running wildly on the road of new energy transformation, are pinning their hopes on marketing and price wars to cope with the pressure of sales growth. The recent arrival of Lei Jun and Xiaomi SU7 has directly prompted Chinese car company bigwigs to enter the live broadcast room and start marketing in person.

Tesla, under Musk, has had to keep up with the pace. Musk, who has always refused to advertise, finally relented at the end of last year and decided to "try a little advertising and see how it works". But four months later, in April this year, the marketing team of nearly 40 people was all fired by Musk on the grounds that "the planned advertising was too mediocre".

In addition to marketing changes, Musk once again offered the banner of price reduction. Following the price reduction of all products in the U.S. market by 2,000 US dollars, on April 21, Tesla China also followed up to start price reductions for all models, and the starting price of all Model S/3/X/Y models was reduced by 14,000 yuan.

In Musk's view, Tesla's price must be constantly adjusted to ensure that production matches market demand.

But the increasingly volatile Chinese market is putting more pressure on Tesla. Tesla's planned $25,000 (180,000 yuan) cheap model has not yet been released, and in 2024, BYD has lowered the price of the affordable sedan to less than 80,000 yuan with the help of price cuts.

Musk's theory that "the only reason preventing consumers from buying new energy vehicles is that cars are not cheap enough" still works, but some consumers have begun to switch from buying Tesla to buying cheaper domestic new energy vehicles.

The price reduction is becoming more and more ineffective, and Tesla's sales are increasing.

According to Wells Fargo, in the first half of 2023, Tesla's global car prices fell by an average of 12%, driving sales growth of 19% from the previous six months. In the second half of 2023, Tesla continues to cut prices, but the growth rate of car deliveries has slowed to 3%.

The fierce competition in the Chinese market is causing Tesla models to lose their previous cost-effective advantages. It has been 8 years since the launch of the main model Model 3 and 5 years since the launch of the best-selling Model Y. Tesla, which continues to rely on existing old models, has begun to gradually lose its dominance in the market, both in terms of price and product features.

An intuitive performance is that in January 2023, after Tesla initiated a price cut, it can still drive a number of domestic new energy vehicles to follow up with the price reduction. But in 2024, Tesla, which has cut prices again, can no longer trigger competitors to follow up.

Musk, aware of the lack of growth, is pinning his hopes on Tesla's future on the next grand narrative: we are currently in between two major growth waves: the first growth wave started with the global expansion of the Model 3/Y, and we believe the next growth wave will be driven by next-generation vehicles, energy storage, full self-driving and other projects.

This has even become one of the reasons for Musk's explanation of the recent layoffs, "About every 5 years, we need to restructure and streamline the company to achieve the next phase of growth." ”

In an email announcing the 10% layoffs, Musk mentioned that "Tesla's 'rapid growth' has led to 'duplication of roles and job functions in certain areas.'" For the next phase of the company's growth, it is extremely important to look at all aspects of the company to reduce costs and increase productivity. This will allow the company to remain lean, innovative, and enter the next growth cycle. ”

In addition to doing a good job in organizational adjustment, in the face of the outside world's question of "whether Tesla needs a full-time CEO", Musk responded on the earnings call that he participates in Tesla-related work every day and will allocate time and energy reasonably.

Tesla's delay in many major projects has become a new motivation for the above-mentioned external doubts. Since leading Tesla out of Model 3 production hell in 2018 by sleeping in a factory, Musk's energy has gradually been diverted to other projects, especially since the acquisition of X (the predecessor of Twitter). Subsequently, Tesla's Cybertruck has been delayed many times, the FSD promotion has been unsatisfactory, and the 4680 battery, which was originally planned to achieve mass production in 2021, has not yet reached the goal.

Whether Tesla's next wave of growth will come depends almost entirely on when the above-mentioned projects in a state of delay will be implemented on a large scale. Now, by announcing the early mass production of cheap models, Musk, who likes to take on challenges, has taken the initiative to make it difficult for himself.

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