Did Tesla Shanghai Super Factory stop production?

"The charging pile and other workshops have not stopped production, and the media said that the factory stopped production is inaccurate." On December 26, the relevant person in charge of Tesla China told China Newsweek that "Shanghai Factory will still maintain efficient production and excellent output in 2022. The annual production line maintenance work is carried out as planned this week for the production of the whole vehicle. At the same time, after a year of hard work, the workers will also rest during the production line maintenance."

As a wind vane in the industry, Tesla's every move has received strong attention from the outside world. Earlier, Reuters reported that Tesla's Shanghai factory had suspended production on December 24, according to an internal notice and two insiders. In combination with the recent downward trend of Tesla's share price and the reduction of model prices and profits, the outside world questioned the problem of weak demand for Tesla's models.

Image source: Tesla

The above person in charge of Tesla China said that the maintenance of Tesla production line is "normal action". However, Reuters believes that it is not the usual practice for Tesla Shanghai to suspend production during the year-end holiday. The factory kept normal operation in the last week of December last year. However, some information shows that some American automobile companies will cooperate with the Christmas and New Year holidays to stop production lines for about a week.

According to the data, Tesla's Shanghai Super Factory delivered 100000 vehicles in November, a new record for monthly delivery. At the same time, Tesla announced on December 26 that Tesla's 10000th super charging pile in Chinese Mainland was completed and put into use in Shanghai.

Running all the way

According to the data of the National Passenger Car Market Information Joint Conference, the cumulative delivery of Tesla Shanghai Super Factory in the first November has reached 650000 vehicles, far exceeding the 484100 vehicles delivered in 2021.

According to the data, after the expansion of Tesla Shanghai Super Factory, the annual production capacity has exceeded 750000 vehicles, becoming Tesla's largest super factory in the world. At present, the localization rate of the industrial chain of Shanghai Super Factory has exceeded 95%. Tesla CEO Jack Musk once said that Tesla produced by Tesla Shanghai Super Factory has accounted for 1/3 of its total output.

According to TrendForce Jibang Consulting Research, Tesla sold 344000 vehicles worldwide in the third quarter, accounting for 16% of the pure electric vehicle market, ranking first in the best seller list. BYD ranked second with sales data of 259000 pure electric vehicles.

However, Tesla still faces pressure in terms of sales volume. Data shows that Tesla will achieve annual sales of nearly 940000 vehicles worldwide in 2021. When the annual financial report was released last year, Tesla set the goal of increasing its annual sales by 50%, to achieve the sales target of 1.5 million vehicles in 2022. According to the data released by Tesla, in the first three quarters of this year, it delivered more than 900000 electric vehicles worldwide. Although it was close to the annual sales of last year, it still fell short of its goal.

In order to achieve its goals, Tesla has recently implemented sales incentives in several markets. In the US market, Tesla's initial concession policy was to offer a discount of 3750 dollars to customers who picked up cars in the US in December; Later, Tesla decided to provide 10000 miles of super charging service to customers who collected the car that month for free; Recently, Tesla increased the discount to 7500 dollars, which is equivalent to the full tax credit for American electric vehicles that will take effect in January next year. Data shows that as of the third quarter of this year, Tesla's market share of newly registered electric vehicles in the United States was 65%, making it the most popular electric vehicle brand in the United States. However, Tesla's market share this year is 71% lower than the same period last year. In 2020, Tesla's market share in the United States reached 79% at the highest level.

Image source: Tesla

At the same time, Tesla has introduced price reduction measures including insurance subsidies in the Chinese market more than once. In October this year, Tesla adjusted the selling price of Model 3 and Model Y. Among them, the price of Model Y rear drive version is reduced to less than 300000 yuan, thus entering the "300000 yuan price threshold" that can enjoy the national new energy vehicle subsidy policy. In December, Tesla also offered preferential measures such as insurance premium and points.

Tesla's concession stimulated market demand to some extent. According to the data of the Passenger Transport Association, the delivery of Tesla Shanghai Super Factory reached 100291 vehicles in November, an increase of about 40% month on month and 89% year on year. At present, Tesla Shanghai Super Factory mainly produces Model 3 and Model Y. Among them, Model Y ranked first in the overall delivery of passenger cars with the sales volume of 69000 vehicles in November.

Tesla Shanghai Super Factory is an important part of its global production, manufacturing and sales, and carries the important task of Tesla's high growth. According to the previous delivery rules, it gives priority to export at the beginning of the quarter and guarantees local delivery at the end of the quarter. At present, Tesla Shanghai Super Factory supplies overseas markets such as Japan, Australia, New Zealand and Singapore, and has become an important "export center" of Tesla in the world.

Decline in market value

It is worth noting that the recent market value of Tesla, which was previously "overestimated" and "deified", has dropped significantly.

Tesla's market value exceeded 1 trillion US dollars when it was the highest, which exceeded the total market value of the world's 12 largest automobile manufacturers at that time. But at present, Tesla's total market value is 388.9 billion US dollars, which has fallen out of the top ten global listed companies. Since this year, Tesla's stock price has declined by more than 65%, and its market value has evaporated by 723.5 billion dollars (about 5.06 trillion yuan). December of this year was also the worst month for Tesla stock. Tesla lost 219 billion dollars in market value this month, which is almost equal to the market value of Toyota Motor, the second largest automobile company.

Some institutions believe that Tesla's share price mainly reflects the negative impact of Musk's acquisition of Twitter. Musk said that he would resign after he found a suitable CEO candidate for Twitter. Some analysts also believe that Tesla's growth rate was slower than expected, resulting in a decline in its market value. Musk responded to investors on Twitter on December 20 by saying that the decline of Tesla's share price was related to the withdrawal of capital from the capital market.

However, although the current market value of Tesla is greatly reduced, it is still far ahead of other automobile manufacturers, which is equivalent to the sum of Ford, General Motors and Toyota. Its automobile sales in 2021 are only 5% of the three major automobile manufacturers. Gordon Johnson, head of GLJ Research, the largest short seller of Tesla, believes that Tesla's share price will fall in 2023, because compared with other electric vehicle enterprises, Tesla's valuation is still overvalued by investors.

It is worth noting that since the peak of Tesla's market value, Musk has sold more than $39 billion of Tesla shares. After closing on December 22, Musk made a commitment to investors on Twitter Spaces that he would not sell any Tesla shares in the next 18-24 months, "I promise that I will not sell Tesla shares for at least two years from now, and I will not sell them under any circumstances next year."

At the same time, Musk said that the US economy will fall into a "serious recession" in 2023, which will affect real estate, automobile and other industries. As early as June this year, Musk said that he "felt the economy was very bad" and asked Tesla executives to suspend all recruitment and lay off 10%. Now it seems that Musk's judgment on the economic trend has not changed.

So, can Musk lead Tesla to avoid this "serious recession"?