Shulou(Shulou.com)11/24 Report--

On January 26, Beijing time, Tesla released his financial results for the fourth quarter and the whole year of 2022. Revenue, net profit and other financial indicators have achieved good growth.

But under the good news, there are also worries. In 2022, Tesla's total global delivery volume was 1.31 million vehicles, falling short of the sales target of 1.5 million vehicles. At the same time, frequent price cuts also led to a continuous decline in Tesla's automobile business gross profit margin.

Data show that Tesla's share price fell nearly 70% in 2022, shrinking by more than $700 billion. In addition to the share price, Musk was mired in the Twitter acquisition in 2022, which also upset Tesla's shareholders. As they say, Tesla now needs a full-time CEO to turn the tide.

Sales target has not been met, car gross profit margin continues to decline, according to the financial report, Tesla's total income reached 81.5 billion US dollars in 2022, an increase of 51 per cent over the same period last year. The full-year GAAP net profit of 2022 was 12.6 billion US dollars, an increase of 128 per cent over the same period last year.

Tesla CEO Musk called 2022 the best year ever in a conference call. But in fact, Tesla is not as relaxed as he described.

Tesla's total global delivery volume in 2022 was 1.31 million vehicles, an increase of 40 per cent over 2021. Unfortunately, it failed to meet its previous sales target of 1.5 million vehicles, which led to its loss of the top spot in global sales of new energy vehicles in 2022 and was ousted by Yadira.

After failing to meet his annual 50 per cent growth target for two years in a row, Tesla began to lower his forecast and expects to deliver about 1.8 million vehicles in 2023. On this basis, this figure is only about 37% higher than in 2022.

In the face of sluggish demand, Tesla's solution is to reduce prices.

Take the Chinese market as an example, on October 24, 2022, Tesla officially announced a price reduction in China, in which Tesla Model 3 adjusted price range is 26.59-349900 yuan, with a maximum drop of 18000 yuan; Tesla Model Y adjusted price range is 28.89-397900 yuan, with a maximum drop of 37000 yuan.

Half a month after the price reduction, on November 8, 2022, Tesla officially announced that Tesla's current car insurance subsidy program has been launched. From November 8 (inclusive) to November 30 (inclusive), purchase the car insurance portfolio of existing cars and cooperative insurance institutions and complete the pick-up on schedule, the final payment can be reduced by 8000 yuan; from December 1 (inclusive) to December 31 (inclusive), the final payment can be reduced by 4000 yuan.

In January this year, just entering 2023, Tesla opened the mode of price war again. Tesla China announced on its website that the prices of all domestic models of Model 3 and Model Y on sale will be adjusted, with the price of Model 3 falling by 36000 yuan and that of Model Y by 29000 yuan. The price reductions of the remaining versions of the two models range from 20, 000 yuan to 48000 yuan, setting a record low for Tesla in China.

The stimulus of the price cut to sales is obvious, with media reports that Tesla China received orders for 30, 000 cars in three days after the price cut was announced in January.

The strength of Tesla's price reduction comes from the profitability of a single car, but frequent price cuts have had an impact on Tesla's automobile business gross profit margin. Tesla's gross profit margin fell to 25.9 per cent in the fourth quarter of 2022 from 27.9 per cent in the third quarter, compared with 30.6 per cent in the same period in 2021, below 30 per cent for three consecutive quarters. The price reduction in January this year will also be shown in Tesla's gross profit margin in the first quarter of this year.

At the same time, frequent price cuts have rebounded among car buyers. After the price reduction was announced in January this year, many Tesla car owners formed rights protection groups and gathered in Tesla experience stores in many places, asking Tesla to compensate car owners who bought cars recently. Some car owners said that they lost tens of thousands of yuan as soon as they bought a car, and they were not reconciled to it.

However, Musk seems to have his own considerations about the price cut.

Musk stressed that improving the affordability of products is the only way to become a manufacturer of millions of electric cars. "Price changes have a significant impact on ordinary consumers, and affordability is very important-Tesla's goal is always to make it affordable to as many people as possible."

The average selling price of Tesla's electric car has shown an overall downward trend over the past few years, and the average selling price of Tesla electric car has been halved between 2017 and 2022, according to the financial report.

Share prices are falling, lawsuits are rife. Musk has more worries that sales are lower than expected, and Tesla's share price is not going well in 2022.

Data show that Tesla's share price fell by nearly 70% in 2022, shrinking by more than $700 billion. In December 2022, Musk also comforted employees in an internal letter: make every effort to increase delivery volume, don't be bothered by the madness of the stock market, as long as we maintain excellent performance, the market will eventually give affirmation.

But it is not only car sales that affect Tesla's share price, but also Musk himself.

A class action lawsuit against Musk accused of securities fraud has been formally heard in California in the United States. The case mainly involves a tweet by Musk that privatized Tesla in 2018, which triggered a severe shock in Tesla's share price. The trial continues, and if convicted, Musk may have to pay billions of dollars in compensation for the incident.

In addition, Musk's personal reputation has deteriorated sharply because of his performance in the Twitter acquisition.

In April 2022, Musk reached a final agreement with Twitter's board of directors to buy it for $54.20 a share, worth about $44 billion (288.6 billion yuan). But shortly after taking over Twitter, Musk started big layoffs. Foreign media reported that Twitter has laid off about 80 per cent of its employees since Mr Musk managed it, leaving only about 1300 employees.

Due to the loss of employees, it has become more difficult for Twitter to develop new features, even defaulting on the rent of the company's offices. Some of the laid-off Twitter employees also filed a class action lawsuit in court.

A month after Musk took over Twitter, Tesla has more negative views than positive views in the US market for the first time in the six years since YouGov tracked Tesla, according to YouGov, a British market research company. In the same period last year, 38 per cent of respondents had a positive view of Tesla, down from 43 per cent at the beginning of the year, according to Morning Consult, a US consultancy.

With Tesla's sales challenge on the one hand and the acquisition of Twitter on the other, Musk seems to be a little unskilled in 2022. This has also caused the dissatisfaction of some Tesla investors, some investors believe that Tesla's share price decline is not caused by CEO. What's more, some Tesla shareholders said that Tesla needs CEO who can work full-time.

In December 2022, it was reported that Musk had appointed Zhu Xiaotong, former president of Tesla Greater China, as Tesla's global CEO, but until now there was no official confirmation. According to foreign media reports, Zhu Xiaotong has been promoted to global management, responsible for Tesla's production operations in the United States, as well as sales, delivery and after-sales work in North America and Europe.

"We still don't know who will be the distant second place," Musk said in a fourth-quarter earnings call when asked who will be Tesla's strong competitor in the next five years. "you can't even see the second one with binoculars." But at the same time, he admitted that Chinese car companies are the most competitive in the world. "they work hardest and work smartest, and some Chinese companies are most likely to be second only to Tesla."

As Musk said, Chinese traditional car companies are accelerating the transformation to new energy vehicles, and a number of new energy vehicle brands are accelerating to enter overseas markets while competing with Tesla in the Chinese market. Although Tesla has a first-mover advantage in the global market, Musk, who is in a lot of trouble, has to take his competitors seriously.

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