From 2020, Tesla will be domestically produced in China, and sales in the Chinese market will also increase by leaps and bounds. Because it flies fast, every time you experience a monthly decline in sales, it will inevitably become the biggest attraction.
Domestically produced for more than a year, Tesla actually experienced three sharp declines in sales.
The largest month-on-month decline was in April this year, when domestic sales of 11,671 vehicles fell 67.1% from the previous month. This was the largest month-on-month decline in sales since Tesla’s production in China. A lot of analysis will be related to the rights protection incident of female car owners at the Shanghai Auto Show in April, as well as the continuous out-of-control braking and out-of-control autopilot systems, but Tesla’s sales have risen again in the next few months.
In April 2020, Tesla also experienced a plunge. Its domestically produced model Model 3 dropped directly to 3635 units from over 10,000 sales in March last year, a 64.2% decrease from the previous month. However, this decline is related to the adjustment of my country’s new energy subsidy policy, which has set a subsidy threshold of 300,000 yuan-electric vehicles above 300,000 will no longer enjoy subsidies (except for battery-changing models).
In July of this year, the month-on-month decline was the most violent, setting a “record” again. According to the data from the Federation of Travel Services, in July, Tesla’s sales in the Chinese market were 8,621 vehicles, a 69% drop from the previous month, directly falling into the delivery range of “Wei Xiaoli”.
Behind the three plunges, almost every time Tesla was examined with a magnifying glass, and it was speculated that this would be the beginning of the disillusionment of the Tesla myth?
This conclusion is not necessarily a bit sloppy.
In fact, the plummet in July has given many reasonable explanations from all angles in the industry.
For example, according to data from the Federation of Travel Services, Tesla’s wholesale volume in July was 32,900, of which more than 20,000 were exported. Cui Dongshu, secretary-general of the Travel Association, believes that the decline in Tesla’s sales in China this time is to ensure the third quarter of foreign market sales and increase exports. It is normal that domestic sales have not exceeded 10,000.
Yesterday, Tesla CEO Elon Musk also confirmed this statement. He replied in response to an analyst’s analysis of Tesla’s tweet that the domestic delivery of Chinese-made cars in July fell by nearly 70% from the previous month. Electric cars produced in the first half of a quarter are used for export, and those produced in the second half of the season are put on the local market.”
In other words, this is a “strategic contraction” of Tesla.
So how to look at Tesla’s month-on-month plunge in the correct posture?
On the one hand, Model Y launched the standard battery life version in early July, the price fell below 300,000, and the starting price was 276,000. At the same time, at the end of July, the price of the Tesla Model 3 standard battery life upgraded version was reduced by 15,000. For the price adjustment of the two models, the accumulated orders will be released in August and September.
However, not all users are “holding money on the sidelines”, and they may not have so much patience. Tesla’s price cut in July also created opportunities for new car brands and independent brands-BYD’s new energy model sales exceeded 50,000 in July, a year-on-year increase of 262.7%, of which BYD Han’s sales exceeded 8,000; the ideal sales volume reached 8589 A year-on-year increase of 251.3% and an increase of 11.4% month-on-month; Xiaopeng also broke the 8,000-vehicle mark, an increase of 22% month-on-month.
Tesla is engaged in a strategic contraction, and competing models take the opportunity to take the lead. This may also mean that Tesla’s “routine operation” of price-for-volume may not be enough every time, and it is also a problem that it should be wary of.
Therefore, every time Tesla’s sales plummet, it will create space for its competitors.
For example, after BYDhan cut the price of Tesla Model 3 by 15,000 yuan, it also announced on August 1 that BYDhan EV will add a standard endurance version of the entry-level luxury model. NEDC has a range of 506 kilometers and the subsidized price is 209,800 yuan. Flexible price strategy is not unique to Tesla, and the offensive to encircle Tesla has become more and more fierce.
This time there is another point worth noting.
At the beginning of this year, Tesla announced that the production capacity of Tesla’s Shanghai factory will reach 450,000 vehicles this year. Recently, there has been news that the current production capacity of Tesla’s Shanghai factory has reached 450,000 vehicles. In other words, the current monthly production capacity of Tesla’s Shanghai plant is 37,500 vehicles. Judging from the data of 32,900 vehicles from the Federation of Transportation Services, in order to ensure exports, Tesla is also almost meeting orders in foreign markets with full production.
It is understood that the main body of Tesla’s Berlin factory, the first European factory, has basically been completed, and a large number of internal equipment is also being installed. It is expected that the Berlin factory may pass the approval in the fourth quarter of this year. By then, orders for the European market will not be available. Count on exports from Chinese factories.
The main part of the Berlin factory building has been completed
Then, from now on, Chinese factories may mainly satisfy export markets such as Japan, South Korea, and Southeast Asia. The size of these markets is far less than the Chinese market. At the same time, the Chinese market is catching up with the United States and gradually becoming Tesla’s largest single market. In other words, the production capacity of Chinese factories will mainly satisfy the Chinese market after foreign factories enter the ramp-up phase of production capacity.
If a large number of export orders are not required, the production capacity of 450,000 vehicles of the Chinese factory must be realized in the Chinese market as much as possible. When will Tesla achieve sales of 450,000 vehicles in the Chinese market?
In 2020, Tesla will deliver nearly 500,000 vehicles worldwide, of which less than 150,000 vehicles will be delivered in the Chinese market.
In the first half of 2021, Tesla has completed sales of more than 160,000 in the Chinese market and is expected to sell more than 300,000 vehicles in the Chinese market this year. According to the growth rate of the past two years, the breakthrough of 450,000 vehicles seems to be just around the corner.
At the same time, Tesla is also planning to continue to reap the Chinese market in the form of dimensionality reduction strikes. It is reported that a pure electric model priced at about 160,000 is expected to be put into production at the Shanghai plant.
However, Chinese brands obviously will not wait for Tesla’s continued price cuts to harvest the market.
Except that Weilai has just made it clear that it will launch a new brand to encircle Tesla, the electric car market of 150,000 to 200,000 is the focus of future market competition. Independent brands have the most layout in this range. Among joint venture brands, such as Volkswagen ID.3, etc., which will be launched in the future, will all enter this range. So, will Tesla be able to play well in every price range?
Moreover, judging from the development law of the fuel vehicle market, “up and down usually”, up to 400,000, down to 100,000, a brand can not do it, the brand positioning is there, if it is low, it will not go up. If you continue to do it, you will lose your value.
For Tesla, how much room is there for continued price cuts or continued exploration?
Although the plunge in January is not enough to determine success or failure, Tesla still has to think a little bit if it wants to keep accelerating in the Chinese market.
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