What Opportunities Does The Tesla China Factory Bring To The Industry Chain?

- Nov 19, 2019-

After years of development, the companies in the Apple industrial chain have seen many giants. There are not many companies with market capitalization of hundreds of hundreds of billions, and the Tesla industrial chain with the same slogan is quite different. What is the reason for the gap? Can the future Tesla industrial chain become the second apple industry chain? Just as the Tesla China factory is about to go into production, will you talk about the same opportunity in the Tesla industry chain in the A-share market today?

Let's see if they have similar days. Everyone knows that Apple's rise is mainly based on the fact that smartphones have replaced the function of mobile phones. Tesla seems to have this factor. At present, global new energy vehicles seem to have a substitute for traditional fuel. The trend of the car.

Some professional organizations predict that by 2031, half of the car sales will be new energy vehicles.

However, from the current state of view, Tesla does not seem to have any rivals in the global field of electric vehicles.

As you can see from this chart, Tesla is the only electric vehicle company in the North American market that can compete with traditional car manufacturers. This situation seems to have begun to appear in Europe with the launch of model3.

As can be seen from the above figure, Tesla model3 is already in the leading position in the market share of electric vehicles in the European market.

Let’s see if Tesla is similar to Apple in the Chinese market. As the world's largest smartphone manufacturer and seller, Apple's annual income of about 20% is generated in China. As the world's largest automobile production and sales country, will the Tesla China factory provide such an opportunity to Tesla?

As just analyzed, Tesla has almost no rivals in the high-end electric car market, and its real opponent is the high-end brand in the fuel car market. Why is it so important in domestic high-end cars?

This is a comparison chart of the growth rate of domestic luxury cars and overall passenger car sales in the first half of 2019. It is obvious that even in the case of the overall weak market in 2018~2019, the demand for luxury cars is still strong. For Tesla, the market positioning is very favorable. The following is to see if Tesla is competitive with the brand of luxury cars.

This is the market share of the US luxury car market in the second quarter of 2019, and Tesla actually reached a quarter, which shows its position in the American luxury car market. To analyze the specific reasons, can you copy in China?

This picture shows the 5-year life cycle cost of the Tesla model3 against the BMW, Audi, Mercedes-Benz and Toyota Camry equivalent luxury cars, from taxes, policy subsidies, oil and gas prices, maintenance costs and recycling prices after 5 years. Evaluate their costs. As you can see, Tesla model3 is the lowest cost, and Tesla has a better autopilot system, which is the most cost-effective overall. This is also an important reason why Tesla can occupy the first place in the American luxury car market.

Let's look at the location of Tesla, the Chinese luxury car market.

Tesla has already entered the top ten, and the current domestic Tesla is all imported cars. The price/performance ratio has no advantage over domestic luxury cars. However, with the production of Tesla's Chinese factory, the price advantage will gradually be reflected, and the probability of this ranking will continue to rise. Tesla's plan is to produce 1,000 vehicles per week by the end of this year. By March next year, the weekly production will reach more than 3,500. This means that at least 150,000 Tesla is produced annually from the Shanghai plant. This amount is enough to shake the entire domestic luxury car market. It can be seen that in the Chinese market, it should have a great chance to have a similar volume to Apple.

What kind of opportunities does this have for the local Tesla supply chain? I just saw that Tesla's competitiveness in luxury cars, the most important of which is the price advantage, that is, the cost, which means that Tesla's Chinese factory will use a large number of local accessories, which has gained competitive advantage and Tes Companies with a large share of the industrial chain will benefit significantly.

How much revenue does Tesla contribute to domestic suppliers in the next few years? The above table is the calculation of professional institutions (the specific company name has been hidden), the top three are in double digits, and the highest can actually achieve more than 50% of the revenue contribution. And if Tesla can be like Apple, driving the overall competition of China's electric vehicle industry, perhaps we will see Huawei, Xiaomi and oppo in China's electric vehicle market soon, making the entire electric vehicle industry chain in China really do. Big and strong.

On October 24th, Tesla released its third-quarter earnings report. The third quarter revenue was 6.303 billion US dollars, down 8% year-on-year; the net profit attributable to ordinary shareholders was 143 million US dollars, down 54% year-on-year. Tesla achieved profitability in the third quarter. And the delivery volume in the third quarter reached a record, reaching 97,000, and Tesla shares rose sharply on the day.

Tesla's global vice president Tao Lin said on October 21 that Tesla's Shanghai factory can be said to be "ready" and that external sales are only waiting for product certification and national approval.

The author is full of expectations for the Tesla China factory and the Chinese electric car industry.