Musk left a question mark

Chinese entrepreneur

2024-04-30 09:07Published on the official account of Beijing "China Entrepreneur" magazine

Header photo by Deng Pan

Text: "Chinese Entrepreneur" reporter Kong Yuexin

Edited by Ma Jiying

Only 23 hours. According to public information, at 13:17 pm on April 29, Musk's private jet took off from Beijing Capital Airport, ending this 23-hour trip to China.

Source: Network screenshot

At 14 o'clock in the afternoon of April 28, a private jet with registration number N272BG landed at Beijing Capital International Airport, and it was Elon Musk, CEO of Tesla, who stepped off the plane.

According to Reuters, it was Musk's "surprise visit" to China, adding that Musk's trip to China was not made public, and Tesla did not immediately respond to a request for comment.

According to public information, Musk's last trip to China was on May 30 last year, and a 44-hour intensive itinerary was arranged, and Musk's "China tour" was also very fulfilling. According to public reports, on the afternoon of April 28, Ren Hongbin, president of the China Council for the Promotion of International Trade, met with Musk to exchange views on topics such as the next step of cooperation.

According to CCTV's "News Network", on April 28, Premier Li Qiang met with Elon Musk, CEO of Tesla Inc. in the United States, in Beijing.

Li Qiang said that Tesla's development in China can be called a successful example of Sino-US economic and trade cooperation. China's hyperscale market will always be open to foreign companies. China will continue to work hard to expand market access and strengthen service guarantees, so as to provide a better business environment and stronger comprehensive support for foreign-funded enterprises, so that enterprises from all over the world can invest in China with peace of mind.

Musk said that Tesla's Shanghai Gigafactory is Tesla's best-performing factory, thanks to the hard work and wisdom of the Chinese team. Tesla is willing to further deepen cooperation with China and achieve more win-win results.

Musk not only posted the news of the meeting between the two on social media X, but also deliberately landed on Weibo, which has not been updated for several months, and synchronized the blog post.

Source: Weibo screenshot

According to CCTV's "News Network", Zhu Xiaotong, Tesla's global senior vice president, and Tao Lin, Tesla's vice president of public affairs of the Chinese government, were present.

Similar to last year's style, Musk's trip to China is still under wraps. Because the time coincides with the 2024 Beijing Auto Show, many people have speculated whether Musk will visit the auto show hall, and Tesla's public relations is noncommittal.

According to the global network, about this trip, Musk is still here to launch FSD (full self-driving) software in China.

A few hours after arriving in China, Musk also quickly received good news.

On the evening of April 28, the China Association of Automobile Manufacturers and the National Computer Network Emergency Technology Processing and Coordination Center issued the "Notice on the Testing of 4 Safety Requirements for Automotive Data Processing (the First Batch)", in which 76 models from 6 companies, including BYD, Ideal, Lotus, Hezhong New Energy (Nezha Automobile), Tesla, and Weilai, meet the 4 compliance requirements of automotive data security. Tesla is the only foreign-owned company that meets the compliance requirements.

Source: Screenshot of Weibo hot search

At present, the competition in the auto market is becoming more and more fierce, in order to cope with the decline in sales, Musk announced in the form of an internal letter on April 15 that Tesla will lay off 10% of its global workforce, affecting nearly 14,000 people. It is also Tesla's largest layoff since 2017. On the day the news of the layoffs broke, Tesla's stock price plummeted 5%, wiping $30.5 billion from its market value.

On April 23, the news broke on the Internet that Tesla had broken all the offers of fresh graduates, and it was said that the result was that Tesla would compensate for one month's liquidated damages. On April 24, the topic appeared on Weibo hot search, and many netizens said that they were unilaterally terminated by Tesla after getting the job offer.

After Musk's trip to China, can Tesla break new ground?

Tesla's troubles

Tesla hasn't had a good time lately.

On April 23, Tesla released its financial results for the first quarter of 2024. According to the data, the revenue in the first quarter of 2024 was US$21.3 billion, down 8.69% year-on-year, the largest revenue decline in 12 years, of which the total revenue of the automotive segment was US$17.38 billion, down 13% year-on-year, and the net profit was US$1.13 billion, down 55% year-on-year.

In the first quarter, Tesla delivered a total of 387,000 vehicles, down 8.3% year-on-year. This is Tesla's first year-on-year decline since the second quarter of 2020.

In the capital market, Tesla's share price has continued to fall since the beginning of this year, with a cumulative decline of more than 30%.

Although Musk behaved very easily in the subsequent earnings conference, he has to admit that Tesla's road ahead is not easy when the new energy track is getting more and more rolled.

Source: China Attempt Library

In 2021, Tesla's market share in China was 16%, but as of December 2023, this figure has dropped to around 6.7%. Even in the United States, Tesla's market share fell from 62% in 2022 to 55% last year.

In the fourth quarter of 2023, BYD's pure electric passenger car sales surpassed Tesla to become the world's first for the first time. In the first quarter of 2024, BYD sold 586006 vehicles in the domestic market.

In China, in the 200,000~300,000 yuan market segment where Tesla's main model Model 3 is located, competitors include ZEEKR 007, NIO ET5, BYD Han, Xiaopeng P7, Zhijie S7, etc., and the newly listed Xiaomi SU7 is also menacing, becoming the new "top stream" of the market segment.

Musk's card is "price reduction".

In March this year, when the "price war" of domestic car companies was raging, Tesla chose to operate in reverse and announced that it was about to raise prices. On April 1, Tesla's official website in China showed that the price of the Model Y increased by 5,000 yuan.

But in less than a month, Tesla compromised with the market. On April 21, Tesla's official website in China showed that Tesla's Model 3/Y/S/X series was reduced by 14,000 yuan in Chinese mainland, of which the starting price of Model 3 was reduced to 231,900 yuan, and the starting price of Model Y was reduced to 249,900 yuan.

At the Q1 earnings conference, Tesla also revealed some news to be encouraging.

At the conference, Musk said that Tesla's low-priced model, which costs about $25,000, will start production in early 2025, even if it is not later this year. As soon as the news was announced, Tesla's stock price rose more than 10% after hours.

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.

In terms of FSD external authorization, Tesla said that it 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.

Tesla also recently offered a free trial of FSD, slashing the purchase price of the option from $12,000 to $8,000 and the subscription price from $199/month to $99/month.

As Tesla's core business unit, the continuously updated FSD will become the second growth point of Tesla's global market, and it will also become the core of its valuation.

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

However, in terms of Tesla's FSD expansion, Musk still can't clarify the specific time node.

CICC's research report pointed out that if FSD is to be promoted in China, the entire set of data closed-loop needs to be in China, and it is necessary to prepare for data collection and model training, and consider whether the BEV perception scheme can be well adapted locally. In China, FSD mapping may need to cooperate with Chinese manufacturers, and Tesla needs to build a local computing center and set up a local algorithm adaptation team.

Musk's trip to China "KPI"

Tesla's absence from the Beijing Auto Show ushered in a new "top stream" this year.

On the first day of the Beijing Auto Show, Lei Jun and Zhou Hongyi became the focus of attention of the audience and were rated as "one red and one green two traffic kings". When Zhou Hongyi and Lei Jun visited the exhibition, they received the treatment of star-like personal follow-up.

Although Tesla did not participate in this Beijing Auto Show, this did not affect the popularity of Musk's topic.

Xiaoyu, a self-media who was already ready to give up the exhibition and take a good rest, cheered up again after learning the news of Musk's visit to Beijing, "Musk may go to the auto show on April 29, and I will squat him." ”

Judging from Musk's specific actions, every time he travels to China, he is burdened with some kind of KPI.

Ten years ago, on January 24, 2014, Musk registered a Weibo account and posted his first Weibo post on the same day: "What I want to say most is, thank you for your support! I am very grateful for your support, and we will 'make a difference' in the Chinese market in the future." ”

Source: Weibo screenshot

Three months later, on April 22, Musk came to China. This time, he participated in CCTV's dialogue column, was interviewed by a number of media outlets, and also delivered Tesla's first batch of new cars in the Chinese market. In a meeting with Wan Gang, then Minister of Science and Technology, Musk bluntly said: "I hope China can give Tesla tariff preferences, whether the two sides can explore the possibility of building a factory, and let Tesla charging piles enter the country." ”

Despite the friendly atmosphere of the first visit, Tesla's sales in China in 2014 were not ideal. In January 2015, Musk publicly admitted that "Tesla's sales in China have been unexpectedly poor." ”

In 2015, Musk visited China three times and participated in activities such as the Boao Forum, which was analyzed by the industry to promote Tesla's sales in China. Out of dissatisfaction with China's performance at that time, Musk personally engaged in "sales".

After 2017, Musk's several trips to China were to build the Shanghai Gigafactory.

On May 10, 2018, Tesla (Shanghai) Co., Ltd. was established in Shanghai. On July 10 of that year, Musk arrived in Shanghai and signed an investment agreement on a pure electric vehicle project with the Shanghai Lingang Management Committee and Lingang Group.

On January 7, 2019, Tesla's Shanghai Gigafactory started, and Musk danced excitedly at the groundbreaking ceremony. In January 2020, Musk attended the delivery ceremony of Tesla's domestically produced Model 3 and danced awkwardly again before the delivery ceremony began.

During his 44-hour intensive trip to China in May 2023, Musk mainly wanted to solve the problems of Tesla's global market expansion and product replacement, energy storage planning, and FSD function application.

This time, the application and promotion of FSD is expected to see the light of day.

On April 29, according to Bloomberg, people familiar with the matter said that Tesla will clear the key hurdles to the launch of advanced driver assistance features in China through its cooperation with Baidu on maps and navigation features. The person also said that Tesla will then be able to deploy its self-driving services on top of the lane-level navigation and maps provided by Baidu.

This time, has Musk, who has come and gone in a hurry, achieved his wish?

Resources:

"Although Musk doesn't admit it, he still has to rely on low-cost cars to boost the stock price", Geek Park

"Musk's Words, Tesla Soars 400 Billion", letter list

"Tesla handed over the worst record in 12 years, Musk said it is speeding up the launch of cheaper models", love Faner

"The market value has shrunk by more than 6,000 billion yuan, and Musk has made a "super bet"", National Business Daily

"Tesla's speed of life and death, Musk learns from the West", NetEase Technology

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