On January 25, local time, Tesla's stock price continued to decline, falling by more than 12% after **, and the stock price was reported at 182$63, market capitalization 5805$700 million. It evaporated 80.1 billion US dollars (about 574.3 billion yuan) overnight. This is the most direct reflection given by the market after Tesla's unsatisfactory earnings data. Although Musk revealed during the earnings call that Tesla is rolling out plans for next-generation vehicles, he apparently failed to appease neurosensitive investors.
Before the earnings report, Wall Street institutions had already lowered their price targets for Tesla. Among them, Goldman Sachs lowered Tesla's price target to $220 from $255. Morgan Stanley analyst Adam Jonas, who has long been bullish on Tesla, also lowered his price target for Tesla to $345 from $380. He expects Tesla's car sales growth rate to fall to 15% in 2024, less than half of the 38% growth rate in 2023.
Tesla's revenue growth rate from 2020 to 2023.
Despite lowering expectations, Tesla continued the weakness of the previous quarter, with revenue and profit falling short of expectations in the fourth quarter, and profitability falling further. According to the financial report, Tesla's revenue in the fourth quarter of 2023 was 251$700 million, below analysts' expectations; Net profit fell 39% year-on-year to 24$8.5 billion. Among them, the gross profit margin in the fourth quarter increased from 179% slipped further to 176%, the lowest value in three years.
According to Tesla, the main reasons for the declining profit margin are lower average selling prices, higher operating expenses for AI and R&D projects, lower revenue recognition related to FSD due to the release of the beta version of FSD for full autonomous driving in the fourth quarter, and higher expenses due to the ramp-up of Cyberturck's production capacity.
In a rare move, Tesla did not give specific guidance for its 2024 results, as usual, but vaguely warned that "growth rates are likely to be significantly lower than last year" in 2024. Affected by sluggish performance and pessimistic expectations, Tesla's stock price fell nearly 6% after hours on the same day.
In the past year or so, Tesla has been the "volume king" of price cuts to boost sales. For the whole of 2023, Tesla deliveries will reach 180860,000 units, a year-on-year increase of 3765%。At the beginning of this year, Tesla once again reduced the price of **. On January 12, Tesla downgraded the Model 3 and Model Y again in China. After the price reduction, the Model 3 starts at 24590,000 yuan, Model Y starting at 25890,000 yuan. In the following week, Tesla sold nearly 9,000 Model Y units in China.
Although the strategy of cutting prices was immediate, there are all kinds of signs that Tesla is being eaten by the ** war launched by itself. Affected by the decline in the average selling price of its cars, in the fourth quarter of last year, Tesla's sales increased by 20% year-on-year, while its revenue increased by only 3%.
Compared with the "involution" of Chinese competitors, Tesla has been slow to upgrade its products and technologies, and is no longer the absolute benchmark in the electric vehicle market, and the gap between domestic manufacturers and Tesla is narrowing. In October last year, Tesla upgraded two models, the Model 3 Y. Among them, the appearance of the Model 3 launched in 2016 has been upgraded, and the interior of the cockpit has also been slightly adjusted, but the new version has 280,000 yuan. Compared with Chinese competitors such as Ideal and Wenjie, it has brought consumers more choices in terms of comfort and entertainment functions.
At the earnings conference, Musk praised Chinese automakers as the most competitive car companies in the world, and said that without setting up ** barriers, Chinese car companies will "eat" most other competitors around the world. In the fourth quarter of last year, BYD surpassed Tesla to win the sales championship.
In the midst of all the bad news, Musk still released some good news, such as revealing many details of the new product to the outside world. Musk and management say Tesla aims to launch the next generation of electric vehicles by late 2025, including a lower-priced model that will use the "unboxed assembly process," which, according to Musk, will be faster, more efficient and less costly. "Once in production, the model will be far ahead of any other manufacturing technology in the world, and it represents a level of excellence. Musk said.
Previously, according to Reuters, Tesla hopes to start production of a new mass-market compact crossover in mid-2025, with an expected production of 10,000 units per week, and the model code name Redwood.
Elon Musk's biography mentioned in the book that Musk revealed in 2020 that he wanted to launch a small, cheap, and popular model with a price of about 2$50,000, but this plan was later shelved and vetoed several times over the next two years. Musk is not interested in low-cost new cars, he prefers to make a robotaxi.
But with the decline in the competitiveness of Tesla's existing products, it is clear that new cars have been rushed to the agenda. Musk also said that "in 2024, we will concentrate on the launch of the next generation of low-cost models". This model is seen as the key to Tesla's next growth, and the future expectation is to maintain a 50% annual growth rate for Tesla, and the market size will reach 700 million units by 2030, almost double the size of the Model 3 and Model Y models.
But increasing production is a challenge for Tesla. The car will be built at plants that have not yet been built in Austin and Mexico and a third plant outside North America. Musk said that for this product "we almost slept in the factory". He called it "a challenging ramp-up process", meaning it is still unclear whether it will be able to start production in mid-2025.
As for the Cybertruck, an electric pickup truck that began to be delivered in the fourth quarter, Tesla said that given the complexity of its manufacturing, it expects the production ramp-up process of the Cybertruck to be "longer than other models". The current production capacity of the Cybertruck can reach more than 1250,000 units, Musk said in October last year that the Cybertruck may not be able to generate significant cash flow for 18 months.
Tesla said in its earnings report that the company is currently in the middle of two major growth waves: the first growth wave starts with the global expansion of the Model 3 Y platform, and the next growth wave will be triggered by the global expansion of the next-generation vehicle platform.