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

Don't expect too much of a pickup.

Author | Truman

Editor | on the continent

Tesla hit rock bottom again.

Its market value lost $38.6 billion (282.4 billion yuan) overnight.

Even Musk is unusually pessimistic, calling the development of Cybertruck "digging its own grave", saying it is "very difficult" to bring the product to market, achieve mass production and make money.

Musk believes that Cybertruck will face a "huge challenge" to achieve mass production, and it will take another 12 to 18 months to achieve positive cash flow.

Behind this is a not-so-beautiful financial report, which, in a more realistic way, is not as good as expected.

In the third quarter, although Tesla through price cuts to stimulate demand, but operating profit, net profit, gross profit margin and so on have declined to varying degrees. Of this total, revenue was $23.4 billion, net profit fell to $1.85 billion, and gross profit margin fell to 17.9%, the lowest level in nearly two years.

Has just become a mature automobile company, is it beginning to be mediocre again?

Net profit fell 44%, profit margin may continue to decline in the third quarter of this year, Tesla's revenue was 23.35 billion US dollars, an increase of 9 percent over the same period last year, an increase of nearly 2 billion US dollars compared with 21.45 billion US dollars in the same period last year, but this figure is 1.6 billion US dollars less than the previous quarter.

Wall Street had expected Tesla's Q3 revenue to be $24-24.9 billion, basically the same as the previous quarter, but it was actually lower than the previous quarter.

GAAP net profit was $1.853 billion, down 44% from a year earlier, and the market is expected to be $2.231 billion. Adjusted earnings per share were $0.66, down 37% from a year earlier, below market forecasts of $0.91 and $1.05 a year earlier.

In terms of profit margins that people are more concerned about, before the results were released, nine analysts surveyed by Visible Alpha agreed that the price war was likely to push Tesla's profit margins to a four-year low of 18.1%.

Because statistics show that between July and September this year, the prices of Tesla's models were reduced by more than 6 per cent.

Morgan Stanley equity analyst Adam Jonas also believes that Tesla's gross margin on Q3 could fall further to 17.5%.

Demand brought about by price cuts means that profits will be sacrificed at the same time.

Indeed, Tesla's gross profit margin fell below 18% in the third quarter of this year, to 17.9%, falling to the lowest level in nearly two years after a low of 18.2% in the second quarter.

More importantly, Tesla's gross profit margin has been falling since the third quarter of last year.

Colin Langan, an analyst at Wells Fargo, said Tesla's profit margin could continue into the fourth quarter and could fall below 15 per cent. "We have taken into account the help brought by the recent fall in lithium prices. however, this may not be enough to offset the impact of the price cut.

Of course, there are also people who are firmly and persistently bullish on Tesla. Gene Munster, a well-known technology analyst and managing partner of Deepwater Asset Management Company (Deepwater Asset Management), believes that although Tesla's gross profit margin may decline again in Q3, it may rise in Q4.

The delivery targets of 02 and 1.8 million remain unchanged in terms of production and delivery. According to data released by Tesla, a total of 430500 electric vehicles were produced worldwide in the third quarter, while delivery was 435000, a decrease of 31000 compared with the previous quarter.

The reason given by Tesla is that the factory is upgraded and shut down.

Of this total, production of the Model S and Model X models was 13688 with 15985 deliveries, and that of Model 3 and Model Y was 416000 with 419100 deliveries.

In the first three quarters of this year, Tesla delivered a total of 1.324 million vehicles worldwide, exceeding the total of 1.314 million delivered last year.

In the financial report, Tesla reiterated his annual sales target of 1.8 million vehicles. If you want to achieve this goal, it means that Tesla will have to ensure the delivery of 476000 new cars in the fourth quarter.

This is also a record number for Tesla, as for how to do it, Musk has given the answer: the price war continues.

At the earnings meeting, Mr Musk said Tesla would still try to reduce the price. "We have to make our products more affordable so that people can afford them. Reducing the cost of Tesla's car is similar to a game of Thrones, but for a few cents."

In October, Tesla cut the prices of Model 3 and Model Y in the United States. Last month, it also slashed the prices of its high-end models Model S and Model X.

At the same time, after the launch of the new Model 3, Tesla brought the new Model Y in China earlier this month, but has not yet started official delivery or given a date for its launch in the United States.

03, alluding to Mercedes-Benz, FSD will be more comprehensive has always been, Musk has been full of confidence in Tesla FSD, now FSD has come to the V12 version, Musk also has high hopes for it. And said bluntly that FSD may make Tesla the most valuable company in the world so far.

Musk said that Tesla FSD global test mileage has reached 500 million miles (about 803 million km).

In May this year, Musk said in an interview after Tesla's shareholders' meeting that when FSD is really realized, it will be Tesla's "ChatGPT moment".

In July, Musk spoke again about autopilot. According to Musk, Tesla FSD autopilot technology is currently used on American roads, so there is no need to touch the controller (steering wheel, brake, accelerator pedal, etc.) from point a to point b.

In August, Tesla cut the price of the FSD by 1/5, and analysts said Tesla may further reduce the price of the FSD.

But Musk said, "Tesla just wants to make the FSD system cheaper, and the current price is already a recent low."

In this regard, some investors asked, "since FSD is getting better and better and Robotaxi is coming soon, why should we reduce the price?"

Tesla's answer is: we want more people to afford it, so more people will try. Over time, the price of FSD will increase in proportion to its value, and the current price is only a temporary low.

In addition, Tesla also asked Musk whether he planned to bear the legal liability of autopilot like Mercedes-Benz.

Musk joked that everyone seems to think that Tesla is legally responsible, but Mercedes-Benz's system is very limited and of little use, while Tesla FSD is more comprehensive.

"only some people understand the profound significance of Tesla's artificial intelligence, which is basically a baby version of AGI, which must be driven by understanding the real environment. Tesla has more than tripled the amount of computation in artificial intelligence training to adapt to the growing amount of data and the Optimus robot project."

04. Don't expect too much from Cybertruck. Cybertruck, an electric pickup truck, stole a lot of limelight this year, but Morgan Stanley analyst Adam Jonas said investors were "not enthusiastic" about it. As a matter of course, Tesla is also cautious about his performance for the rest of this year.

Cybertruck is scheduled to make its first deliveries at its Texas plant on Nov. 30, but Tesla has yet to disclose the exact price.

In 2019, Tesla expected the Cybertruck to sell for less than $40,000, but Gary Black, managing partner of The Future Fund, who owns Tesla's stock, said: "the price of the Cybertruck single motor will be about $49900, the double motor may be $59900, and the three motor may be $79900, which is slightly higher than the Model Y."

Tesla revealed in the financial report that the Texas plant has begun trial production of Cybertruck, which is still on the right track to start delivery within this year. Previous data show that Cybertruck orders reached 1943876 vehicles and pre-order revenue exceeded 194 million US dollars. The delivery of Cybertruck will help Tesla expand the target market and increase delivery for the whole year.

But Musk is pessimistic about Cybertruck, saying there are 1 million bookings, but capacity and positive cash flow face huge challenges.

"I just want to lower people's expectations of Cybertruck, this is a very good product." However, Tesla's development of Cybertruck is a "self-digging" act, and it will take a year to a year and a half for Cybertruck to contribute positive cash flow.

Musk revealed that Tesla will not be able to achieve the annual shipment of 250000 Cybertruck vehicles until 2025, and it will be "extremely difficult" to increase production. Tesla is currently experimenting with Cybertruck production at a Texas factory, which can produce 125000 vehicles a year.

Obviously, it can take years to digest existing orders alone. This will be a sweet burden for Tesla.

Overall, although revenue, profit margins and other key indicators have declined, Tesla's other business growth is good, including energy storage deployment of 4 gigawatt hours (equivalent to 4 billion watt hours) in the third quarter, an increase of 90% over the same period last year, the highest quarterly installed capacity ever.

The energy business and related services segment made a total gross profit of more than $500 million in the third quarter, double the revenue in the second quarter. Tesla believes that energy storage is becoming one of the company's most profitable and promising businesses.

This article is from the official account of Wechat: Super Electric Lab (ID:SuperEV-Lab). Author: Truman.

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