[The Epoch Times, January 21, 2023](Comprehensive report by Epoch Times reporter Zhang Wan) In the past year, Tesla’s Shanghai Gigafactory contributed more than half of the company’s sales. However, as the global supply chain tends to be localized and demand in China declines, Tesla’s Chinese factory faces many challenges.
Just entering 2023, Tesla has encountered protests in the Chinese market.
On January 10 this year, dozens of Chinese car owners who had just bought Tesla held a protest in front of a Tesla delivery center in Shanghai, expressing their dissatisfaction with Tesla’s price reduction and demanding compensation for the price reduction.
In fact, in October last year and January this year, Tesla lowered the prices of several models in the Chinese market twice. The prices of Model 3 (RWD) and Model Y (RWD) dropped by nearly 10% after two rounds of adjustments. Twenty percent.
On January 6 this year, Tesla announced price cuts for two Model 3 models and three Model Y models, ranging from 20,000 yuan ($2,800) to 48,000 yuan ($6,703). Among them, the lowest-priced Model 3 (RWD) was lowered by 36,000 yuan (5,027 U.S. dollars) to nearly 230,000 yuan (about 32,000 U.S. dollars); the price of Model Y (RWD) was lowered by 29,000 yuan (4,050 U.S. dollars) to nearly 260,000 yuan (about $36,000).
The sharp price cut has had a negative impact on Tesla, and some potential buyers have also begun to wait and see.
The Shanghai plant has grown in importance in Tesla’s system since it started production three years ago. In 2022, Tesla will sell a total of more than 1.31 million electric vehicles worldwide, of which more than 710,000 (accounting for 54%) will come from the super factory in Shanghai.
However, China‘s new energy vehicle subsidy policy expired at the end of last year, which means that from 2023 onwards, the purchase of pure electric vehicles in China will lose the subsidy of 10,000 yuan.
Tesla launched a round of price cuts in late October last year, and then ushered in a sales peak in November. The Shanghai factory delivered more than 100,000 electric vehicles that month; but by December, Tesla’s delivery The delivery volume (55,800 vehicles) has dropped sharply by 44% compared with November, and it has dropped by more than 20% compared with the delivery volume in December 2021 (more than 70,800 vehicles).
The sharp drop in deliveries is not due to insufficient capacity, but to a drop in demand. The latest data shows that in December last year, Tesla’s Shanghai factory sold nearly 42,000 vehicles in China, a drop of 40% from December last year. Tesla even suspended production at the Shanghai plant on December 23, actively reducing production capacity.
In fact, Tesla’s order backlog has shrunk significantly over the past six months.
According to data from Troy Teslike, which tracks Tesla’s production and sales, from July 2022 to the end of the year, Tesla’s backlog of orders has been reduced by 85% in half a year. As of the end of last year, the backlog of orders in North America had been cleared by the end of last year, and the orders to be delivered in China were also close to zero.
European and American markets tend towards localized manufacturing
Rising production capacity meets weaker markets. If Tesla exports the excess production capacity of the Shanghai plant to the North American and European markets, it will face the challenge of the localization trend of the industrial chain in the two major markets.
The European market is currently the main export market for Tesla’s Shanghai factory. However, as the production capacity of Tesla’s German factory expands, the proportion of local supply will increase.
On December 19 last year, Tesla’s official Twitter announced that the weekly output of Model Y at the Super Factory in Berlin, Germany exceeded 3,000 vehicles.
Tesla’s Berlin factory started production in March last year. By mid-June last year, the weekly output reached 1,000 vehicles, and the output tripled six months later.
Currently, Tesla’s electric vehicles sold in the US market are all manufactured in local factories. In addition to the complete vehicle plant in California, in April 2022, Tesla’s second electric vehicle plant in Austin, Texas will also begin production.
In addition, Tesla’s Shanghai factory’s electric vehicles are going to enter the United States, and they also face the requirement of local supply ratio of battery components and key minerals.
The United States passed the “Inflation Reduction Act” (The Inflation Reduction Act) in August last year, and made an updated regulation in December last year: at least 50% of the battery components of electric vehicles sold in the United States are required to be in the United States, or Buyers can only get half of the $7,500 federal tax credit if they are manufactured or assembled in a country that has a free trade agreement with the United States;
To get the other half of the subsidy, at least 40% of the key minerals for electric vehicle batteries must be extracted and processed in the United States or countries that have signed free trade agreements with the United States before 2024, or recycled minerals from North America. ; This proportion will increase by 10% from 2024 to 80% by 2027.
The current battery components of Tesla’s Shanghai plant come from CATL and BYD’s factories in Sichuan, China.
The industrial chain has been built, but the market share in China has declined
If Tesla’s Shanghai factory focuses its business on the local market in the future, it will face competition from local Chinese automakers for the market.
According to the data released by the China Passenger Passenger Association, Tesla will sell nearly 440,000 vehicles in China (7.7% market share) in 2022, while BYD’s annual sales volume will be nearly 1.8 million vehicles (32% market share). 4 times more.
After Tesla entered China, it led to the formation of China‘s electric vehicle industry chain.
When Tesla first entered the Chinese market in early 2020, the Chinese media said that the weakest link in China‘s electric vehicle industry chain is vehicle manufacturing. car industry chain. It’s like Apple has sorted out the industrial chain for China‘s mobile phone industry, so there are Chinese-made Huawei, OPPO, VIVO, Xiaomi and other companies.
At present, 95% of the components of Tesla’s Shanghai Gigafactory have achieved localized supply. By 2022, the project has formed a full ecological chain of new energy vehicle components including batteries, automotive chips, automatic driving systems, automotive interiors, and precision machining in Shanghai, Suzhou, Ningbo and other regions in the Yangtze River Delta of China.
In 2020, BYD also took the opportunity to seize the Chinese new energy vehicle market, and Chinese companies such as Xiaopeng, Weilai, and Geely also joined the ranks of competing for the Tesla market.
It has promoted the formation of China‘s entire electric vehicle industry chain, and Tesla has entered China for three years, and its share in the new energy vehicle market has not only not increased but has declined.
According to public data, in 2020 and 2021, Tesla’s market share in China‘s new energy vehicle market will remain at about 10%, and by 2022, the market share will drop to 7.8%.
Big databases scare the CCP
After the outbreak of the Russia-Ukraine war last year, Tesla founder Musk’s SpaceX’s low-orbit satellite network “Starlink” (Starlink) provided huge communication support for Ukraine. This makes the CCP fear that the “Starlink” will be used to break through the CCP’s information blockade.
Tesla said in May 2021 that it would build a data center in China to keep user data collected from selling electric vehicles in China in China. In late October of the same year, Tesla announced that it had completed the construction of its data center in China.
Tesla did not hand over the operation rights of the data platform to the CCP state-owned enterprise, but operated it itself, which obviously made the CCP fearful.
Editor in charge: Lian Shuhua #