TU-TESL

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In the third quarter, the first batch of model 3 went offline in Shanghai Super factory, and China became the largest single market outside North America. On November 11, it was reported that the first batch of domestic Tesla Model 3 officially drove out of the production line and was about to be put on sale. It is expected that small-scale delivery of domestic model 3 will be carried out by the end of this year, and large-scale delivery will be realized in the first quarter of 2020. The reporter of Beijing News noted that there are not many actions and favorable information in recent years, such as the completion of Shanghai Super factory. In terms of the disclosed third quarter results, Tesla not only made a profit, but also the gross profit margin of its auto business increased. According to the good news of the financial report, the stock price of Tesla rose more than 20% after the day of disclosure. According to Tesla's third quarter performance report, Tesla achieved $6.3 billion in operating revenue in the third quarter, slightly lower than analysts' consensus forecast of $6.33 billion, down 8% from $6.8 billion in the same period last year. According to the quarterly report, the decline of Tesla's operating revenue may be related to the decline of its auto business revenue; in the third quarter, Tesla achieved $5.353 billion of its auto business revenue, down 12% compared with $6.099 billion in the same period last year. In terms of profit, Tesla's net profit attributable to shareholders in the third quarter was US $143 million, better than the market expectation of US $257 million, turning losses into profits and generating positive free cash flow. Tesla said in a letter to shareholders in the third quarter that this was achieved by reducing a large number of costs from the business, "operating expenses are at the lowest level since model 3 was put into production." It is reported that since last year, Tesla has announced at least three rounds of layoffs and restructured its business to cope with the slowdown in sales of higher margin models. On the other hand, Tesla's turnaround in the third quarter was also due to Tesla's continued growth in deliveries. In the third quarter, Tesla produced 96000 vehicles and delivered 97000; the gross margin of Tesla's auto business increased 393 basis points to 22.8% over the previous quarter. "This year's focus is on cost control and preparing for the next phase of growth, while sustained sales growth and cost control are an important combination to achieve sustainable, industry-leading profitability," Tesla said in a letter to shareholders As the largest auto consumer in the world, the consumption capacity of China's auto market undoubtedly has a huge attraction to Tesla. It can be seen from Tesla's quarterly report that although the Shanghai Super factory has not been started in the third quarter, the impact of the Chinese market on Tesla has been highlighted. In fact, Tesla has begun to explore and further bet on the Chinese market. Tesla said in a letter to shareholders in the third quarter that the Shanghai Super plant was ahead of schedule and began trial production. On November 7, Tesla officially disclosed the photo of domestic model 3 on its official microblog, with the Chinese logo "Tesla" at the end. On October 25, Tesla announced that the model 3 standard extended range upgraded (made in China) model with standard basic auxiliary driving was officially open for booking, with the starting price of 355800 yuan; before that, Tesla also received the "birth permit" issued by the Ministry of industry and information technology. Whether it's the public statements of Tesla executives or the information released by Tesla, it's no exception that Tesla's domestic production is in the sprint stage. But the reality is not optimistic. After opening the reservation, some consumers make complaints about Tesla's "open reservation", which is too expensive for the official micro-blog to sell. The reporter of Beijing News learned that the price of imported model 3 is 363900 yuan, and the difference between domestic and imported is only 8100 yuan. In addition, Tesla's Chinese Model 3 models make complaints about the Chinese word "Tesla". Tesla CEO Elon Zeng said on twitter that he will set up a Chinese engineering team to focus on the development and design of software and firmware for factories and vehicles; Tesla is increasing its investment in the Chinese market. In fact, behind Tesla's increased investment in the Chinese market is the importance of the Shanghai Super factory or the Chinese market; the Shanghai Super factory is Tesla's second automobile assembly plant in the world and the first super factory outside the United States, and its importance is ineffable. From the perspective of production capacity, although Tesla's production capacity is on the rise in general, it has also declined in some quarters. The production of Shanghai Super plant will promote Tesla's production capacity and achieve greater delivery targets. At the same time, it can also relieve the production pressure of California plant model 3. On the other hand, the huge consumption potential of the Chinese market and the trend of electric transformation can further guarantee Tesla's profitability. "To build and sell in China, on the one hand, can help Tesla consolidate its sales volume and position in the Chinese market, on the other hand, can further carve up market share and improve the profitability of the enterprise." Analysts of China Merchants Securities told the Beijing News. However, in the face of the decline of subsidies for new energy vehicles, the pain of new energy vehicles, and the further layout of domestic traditional vehicle enterprises and new forces in vehicle manufacturing, although Tesla is betting on the Chinese market, the pressure it faces cannot be underestimated, and the further increased competitiveness may affect Tesla's gross margin.