2023-05-20 01:32:17
Last year, Musk launched a price war, which triggered a chain effect, and blood flowed into the car factory’s bargaining. The just-announced first-quarter financial report faithfully records the reshuffle effect of the tragic knockout.
Tesla CEO Elon Musk will start a price war in 2022, which will stimulate the industry to follow up and sales of electric vehicles will grow significantly. According to statistics from EV-Volumes, LMC Automotive and other organizations, a total of 10.52 million BEVs and PHEVs were sold last year, accounting for 10% of the overall auto market. 10%” is definitely an important milestone for electric vehicles. In 2022, the annual growth rate of electric vehicles is as high as 55%, which is in sharp contrast to the annual decline of 0.6% in the global auto market.
Tesla frequently cuts prices, eat soft but not hard
Tesla’s price reduction strategy, in addition to consolidating its dominant position in electric vehicles, set off an industry knockout competition, and new entrants who failed to produce results were kicked out of the battlefield. For example, Hon Hai invested US$170 million (approximately NT$5 billion) and holds 19.3% of the shares in Lordstown (LMC) of the United States. The production progress is not smooth, and the stock price listed on the Nasdaq Exchange is lower than US$1. If no capital injection is received, LMC and Hon Hai’s partnership may change.
“Financial News” reported that observing the changes in the stock prices of various companies is a combination of market killing, CEO style, and shareholder decision-making, leading to a multi-faceted presentation. Musk joined Twitter’s board of directors in March 2022. On April 14, he announced that he wanted to acquire 44 billion US dollars with “inside and outside property”. , but also into social media. Can Musk really take care of everything? The number one factor affecting Tesla’s stock price is not electric car sales, but Twitter.
Unexpectedly, when the Twitter acquisition was coming to an end in September, Musk threw out Tesla’s price cuts again. So far, the United States has cut prices 6 times, with an average price reduction of more than 10%. The financial report for the first quarter in April showed that the revenue was US$23.3 billion, an annual increase of 24%; the operating profit rate fell to 11.4%, a two-year low; the operating profit was US$2.7 billion, an annual decrease of 26%, showing the impact of price competition. But car production and deliveries increased by 44 and 36 percent, respectively.
At the financial report meeting, Musk said that Tesla has the unique strength to sell cars at a “zero profit” price, and then make huge profits by relying on self-driving software. Software, as a competitive weapon.
However, the car factory that has been rolling around with fuel vehicles for many years is not a vegetarian. The global sales ranking of electric vehicles, the leader in 2022 is China’s BYD, with sales of 1.858 million vehicles, an annual growth rate of 211%. In the first quarter of 2023, the turnover will reach RMB 120.2 billion, an annual increase of 80%; the net profit will be RMB 4.1 billion, an annual increase of 411%. Wang Chuanfu, chairman of BYD, started his business with electronic components. He has been fighting with Hon Hai founder Terry Gou for more than ten years in the electronics industry.
However, Tesla or BYD, the sales are very powerful, but the stock price is very weak, and the reason is very similar: the major shareholders are under heavy selling pressure. In order to raise money to buy Twitter, Musk broke his promise to sell stocks. If he exercised his options at the price, the profit from selling stocks would be hundreds of times. Hong Kong-listed BYD faced selling pressure from major shareholder Berkshire for 10 consecutive times, accounting for about 10% of the chips listed in Hong Kong; since Berkshire invested in 2008, its profit in 15 years has reached more than 30 times.
China’s big reshuffle, Fox lost the leader
In the industrial revolution brought about by electric vehicles, low-priced products have already been priced at the same price as gasoline vehicles, and even because of more advanced construction methods and fewer parts, the prices have been lowered. India’s Tata Motors launched a car with a price of about NT$300,000, which can travel 250 kilometers on a single charge; SAIC-GM-Wuling’s Hongguang Mini sold 424,000 units last year, making it the third best-selling electric car in the world, with a unit price of only 120,000 to 170,000 yuan. Brands created by local car manufacturers in these emerging markets are capturing the hearts of the middle class at ultra-low prices.
“Financial News” reported that in the era of fuel vehicles, the Chinese auto market is dominated by German and Japanese automakers; after the rise of electric vehicles, it is difficult for traditional automakers in Europe, America and Japan to compete in low-priced cars. Volkswagen, a Chinese company of the German Volkswagen Group, has been the sales leader for the past 20 years. However, due to limited supply chain capacity in 2022, its profit will decline by 14% annually; The annual decline in interest widened to 25%. In March, Volkswagen was overtaken by BYD and lost the leading position in China’s sales.
Oliver Blume, CEO of Volkswagen, who has been in office for less than a year, has visited China several times. He said that he will enhance driver assistance, information and entertainment functions to satisfy Chinese consumers. Although China failed, Volkswagen performed well in the first quarter of the world, with revenue increasing by 22% and operating profit increasing by 35% (after deducting one-off items). The strong performance of the European market made up for the weakness in China.
Japanese automakers are also working hard in China. In 2022, Mitsubishi Motors will suffer a huge loss of about US$200 million in China. The new fuel-powered off-road vehicle “Outlander” launched at the end of last year can hardly be sold. Mitsubishi had to announce the suspension of production at the Changsha factory. Japanese media ” Toyo Keizai interviewed a cadre who believed that “stopping production means the first step to withdraw from China.” In the first quarter, Mitsubishi Motors sold less than 4,000 vehicles in the Chinese market, a 58% drop from the same period last year. Whether Mitsubishi will close the Chinese factory is worth watching.
The auto industry is facing two major changes: the attack of electric vehicles and the reshuffle of the Chinese market. Akio Toyoda, the president of the world’s leading Toyota Motor, announced at the beginning of the year that he would hand over the leadership to Koji Sato, the head of the Lexus brand, on April 1. He admitted that “the best way to promote Toyota’s transformation , is to support the new president.” Toyota has always resisted electric vehicles in the past, and now that it has changed its leadership, it will definitely introduce a new approach.
▲ FUCHS’s sales volume in China was overtaken by BYD and lost its leading position. (Source:Foss）
BMW clings to high-end customers, shares strengthen
“Financial News” reported that traditional car manufacturers usually have to endure huge losses in the early stage when they switch to electric vehicles. For example, Ford’s electric vehicle division will lose US$900 million in 2021 and US$2.1 billion in 2022. This year’s financial forecast is estimated to lose US$3 billion. The reason is that it spends a lot of money to develop new models and build factories. Even with losses widening year-over-year, Ford didn’t predict when electric vehicles would turn a profit.
However, established car manufacturers are not all under attack. The first quarter revenue of luxury car manufacturer BMW increased by 18% to 36.8 billion euros, and its earnings before interest and tax (EBIT) surged by 58% to 5.38 billion euros. The outstanding performance came from high-end models And electric car sales are strong. The pre-tax profit rate in the first quarter rose from 8.9% in the same period last year to 12.1%, showing that high-end demand is not affected by inflation or economic weakness at all. The stock price has risen by 33% in the past year, beating Tesla and BYD.
When it comes to high-end cars, Ferrari must be mentioned. Each car costs tens of millions of yuan. It is a luxury car. The stock price has risen by as much as 46% in one year, and it is stronger than BMW. In fact, high-priced cars are not affected. The “widening gap between the rich and the poor” is not only a social phenomenon, but also manifested in industrial competition. Products targeting wealthy customers will not be affected by the economic downturn. This has been confirmed again from the automotive industry.
(This article is sponsored by financial news Authorized to reprint)
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