Teslas free cash flow at the end of the third quarter was $1.395 billion, up 234% month on month and 276% year-on-year; the revenue of automobile business was $7.611 billion, up 47% month on month and 42% year on year; the operating profit margin of automobile business was 27.7%, higher than 25.4% in the second quarter and 25.4% expected by the market.
Tesla said it produced 145036 vehicles in the third quarter, up 51% year-on-year, and delivered 139593 vehicles, up 44% year-on-year. In the third quarter, the output of Model3 / y was 128044, with a month on month increase of 69% and a year-on-year increase of 60%. The output of models / X was 16992, up 169% month on month and 4% year on year.
Tesla said the Shanghai plants model 3 capacity has increased to 250000 vehicles a year. Deliveries of the Berlin and Shanghai plants will begin in 2021, and semi trucks will also be delivered from 2021.
Tesla said it maintained its target of delivering 500000 vehicles this year. The target of 500000 capacity mainly depends on the month on month growth of Shanghai Super factorys modely production, as well as further improvement in logistics and delivery efficiency.
Teslas frequent price cuts, disputes and overdraft
Guo Xiao, investor.com
On September 20, Mr. Chen, who lives in Daxing, Beijing, presented a domestic Tesla Model 3 car. The price after subsidy was 272000 yuan, nearly 30000 yuan less than 299000 yuan at the beginning of the year, and nearly 60000 yuan less than the subsidized price of 331000 yuan just launched last year.
All of a sudden, Mr. Chen was a little unhappy. In less than 10 days, he not only paid more than 20000 yuan, but also replaced the powerful lithium iron phosphate battery of the new model after the price reduction, and the service life was about 20km longer than that of the version purchased.
Naturally, Mr. Chen wanted to protect his rights. But according to Teslas previous confidence guarantee program, if the owner is not satisfied, the vehicle can be returned within seven days after the vehicle is delivered if it meets certain requirements.
Obviously, Mr. Chen has exceeded the 7-day deadline.
Consideration of Teslas frequent price reduction
Looking back on the whole year of 2019, it can be called a year of rebirth of Tesla nirvana. This year, Tesla Shanghai factory completed the whole process from start-up to vehicle delivery in just 10 months, which shocked the industry.
According to investor.com, Tesla delivered 367500 electric vehicles in 2019, an increase of 50% compared with the same period in 2018; in the first three quarters of this year, Tesla delivered 318000 electric vehicles. In October, musk stressed in an internal letter that Tesla will complete its target of 500000 vehicles this year.
This means that Tesla will complete the delivery task of 182000 vehicles in the next fourth quarter, which is 30.6% higher than the record high delivery of 139300 vehicles in the third quarter. From the data point of view, this is undoubtedly a difficult task.
Price reduction has become the best assassin mace to complete the delivery task. In October 1st and October 13th, Tesla adjusted the price of Model3 and ModelS, perhaps at the moment, for musk, it is not what to accomplish the 500 thousand annual delivery volume of sacrifice point profit.
The problem is that Teslas price cut is not a common marketing gimmick, but a direct profit of 20000-30000 yuan each time. For a new car making force that has just turned over, where is Teslas confidence in reducing prices?
The answer is localization.
According to the estimation of Ping An Securities Research Report, the operating cost of a U.S. made model 3 standard endurance upgraded version in 2019 is about $33000, and that of the long endurance rear drive version is about $38400.
In the same period, the operating costs of domestic model 3 standard endurance upgraded version and long endurance rear drive version from Tesla Shanghai factory were about 30700 US dollars and 35900 US dollars respectively, which were significantly reduced compared with the US version.
On the one hand, it benefits from the cost advantages of domestic Tesla in raw materials, labor, depreciation and other links; on the other hand, it also benefits from the alternative process of localization of Tesla supply chain (the above cost estimation is based on 30% - 40% localization).
Ping An Securities estimates that when the localization process of Tesla Model 3 Series vehicles reaches 100%, the operating cost of model 3 standard endurance upgraded version will be reduced to 23300 US dollars, and that of long endurance rear drive version will be 29500 US dollars. Compared with the current (over 40% localization rate), the operating costs of the two models will be reduced by 29% and 23% again.
At that time, the price of domestic model 3 Series cars will be further reduced to about 220000 yuan under the condition of maintaining Musks target gross profit rate of 25%, which is 20-30000 yuan lower than the current price of 249900 yuan. However, the price of long-range rear drive version is 307000 yuan, which is not much lower than the current price of 309900 yuan.
The sudden price reduction of Tesla is related to the replacement of the lower cost lithium iron phosphate battery. Obviously, the process of localization is speeding up (expected to be 80% by the end of the year), which provides sufficient room for the price reduction of Teslas domestic model 3 Series cars.
Its not controversial, but its not illegal
Relevant legal personage says to investor net, this behavior does not violate relevant current law regulation, belong to market behavior.
However, most market players will give some compensation measures to their old customers for the protection of their own brand reputation. For example, when Tesla announced the price reduction on the national day, the official website of Xiaopeng automobile released the price protection measures, saying that from October 1, 2020 to February 11, 2021, if the national retail price decreases after the subsidy of P7, Xiaopeng automobile promises to give price difference compensation (not delivered to users) or equivalent Xiaopeng mall points (delivered users) to all customers who previously purchased Xiaopeng P7.
In contrast, Tesla has made it clear that there will be no compensation for the old car owners, and it is impossible to refund the price difference. However, after Tesla announced the price cut on October 1, Tao Lin, vice president of external affairs of Tesla, made an official response on Weibo, saying that car owners who meet the standard will be given 3-year free super charging rights. The standard is specifically owners who meet the 7-day confidence guarantee plan. This is a disguised compensation scheme for some old customers who meet the requirements.
However, on October 17, Teslas official website announced that Teslas confidence guarantee program had been terminated and offline on October 16, 2020, leaving suspense for the car owners who had been promised to enjoy the three-year free overcharge rights.
Investor.com contacted Teslas official customer service in this regard. The other side said that the enjoyment of 3-year free overcharge rights is calculated based on the time node changed in the plan on October 16. During the previous price reduction period, car owners who met the 7-day confidence guarantee plan can still enjoy the 3-year free overcharge rights, but they should be connected with the delivery consultant..
This shows that consumers who meet the conditions during Teslas two price cuts this month can still get the disguised compensation scheme of three-year free overcharge rights. However, for Teslas potential consumers, the greater impact is the confidence guarantee program which ended on the 17th of this month.
The plan was previously the key basis for Tesla consumers to protect their rights. The plan stipulates that if the vehicle owner is not satisfied with Teslas new car, and if the vehicle meets the conditions of odometer reading less than 1600 km, the new vehicle limited quality assurance has not expired, the vehicle is in a new state, has not been damaged and has no abnormal wear and tear, and is not resold or transferred to any person or entity, the owner can Return the vehicle within 7 calendar days after delivery.
For the purpose of Teslas termination of the plan, investor.com called Teslas official customer service. The other party said: this plan was launched in November 2018, when electric vehicles were still in the initial stage. Tesla wanted to provide consumers with certain confidence protection, but now electric vehicles have become popular, the company decided to withdraw and put the cost into R & D and aftersales Check it out.
No matter whether the explanation given by Tesla customer service is reasonable or not, it is certain that Tesla consumers will no longer enjoy the privilege of seven day return. Relevant legal sources told investor.com that the confidence guarantee program is a commitment of Teslas own service projects, and the manufacturer has the right to increase, decrease or cancel.
Tesla has cancelled the confidence guarantee plan to guarantee potential consumers to purchase new cars. On the other hand, the loss sentiment of old customers caused by frequent price reduction spread on social platforms. Although neither of these changes is in violation of the rules, Tesla has not made any unexpected changes in sales policy, which has caused many consumers to have dissatisfaction. Many owners left a message about Tesla official micro, wrote down negative comments such as feeling like being harvested and turning black from powder to etc.
Obviously, frequent price reduction has affected Teslas brand reputation by the bad purchasing experience of regular customers. (produced by thinking Finance)