Has the Chinese market “saved” Tesla again?

In January 2020, Musk attended the delivery ceremony of Tesla’s domestic Model 3, which helped Tesla out of the “capacity hell” that could lead to his bankruptcy, thus greatly changing the pattern of China’s new energy vehicle market.

Source: Tesla, April 2024, Musk made a surprise visit to China, making it possible for Tesla FSD to land in China, bringing new opportunities to the beleaguered Tesla, and may also bring new possibilities to the development of new energy vehicles in China– intelligent second half.

Tesla fell into a new predicament, with a decline in delivery volume in the first quarter, global layoffs of more than 10%, and weak performance in the first quarter.

Tesla got off to a bad start in 2024.

Against a backdrop of rising interest rates, weak demand and increased competition, Tesla’s global delivery fell 8.

5 per cent in the first quarter from a year earlier, the first decline since the second quarter of 2020.

In addition, Tesla produced 46561 more vehicles than he delivered in the same period, and had more vehicles in stock than ever before.

Tesla said at the time: “part of the reason for the decline is that the upgraded production of Model 3 at the Tesla Fremont plant is at an early stage, while the Tesla plant in Berlin has also been temporarily suspended due to parts delivery delays and arson attacks caused by the Red Sea situation.

” But JPMorgan analyst Ryan Brinkman wrote in a report that the difference between Tesla’s production and sales in the first quarter “breaks the view that delivery is somewhat limited by supply rather than demand.

” Soon after, Tesla announced that he would cut jobs by more than 10% worldwide.

Musk stressed in his letter: “from all aspects of the company, it is extremely important to reduce costs and improve productivity.

” This will enable us to be leaner and better innovate in preparation for the next growth cycle.

” “Tesla’s announcement of massive layoffs is equivalent to a reduction in production capacity, and there is no doubt that Tesla’s drop in delivery is the result of falling demand, not supply,” JPMorgan analysts wrote.

” Before releasing its first-quarter results, Tesla announced sharp price cuts in major markets such as China, the United States, Germany and France, some by about $2000.

Musk’s explanation is: “in order to match production with demand, Tesla’s price must change frequently.

” However, Gary Black, a former bullish Tesla and managing partner of Future Fund, believes that the price cut is a futile attempt to boost sales.

Another analysis pointed out that Tesla’s price reduction strategy may be an expedient measure.

Photo: Tesla, meanwhile, Wall Street is increasingly worried about Tesla’s near-term sales prospects.

Astonishingly, there seems to be something wrong with Tesla’s core product, the affordable electric car Model 2, which launched the second wave of growth.

Tesla abandoned his plan for affordable electric cars to develop self-driving taxis, according to Reuters.

Later, Musk posted that “Reuters is lying,” but did not provide further details.

At the first-quarter earnings report, Tesla said he was accelerating the launch of “new models, including more affordable models.

” Tesla will launch a “new model” by early 2025, using its existing platform and production line.

However, analysts questioned whether Musk’s promised reasonably priced electric car was “really a new model or an adjustment to existing models”, but Musk declined to answer, saying: “I think we have made this very clear.

” One analyst believes that Tesla’s comments about the new model confirm that he has suspended the Model 2 project.

“it is clear that Tesla’s new car platform has indeed been put on hold for the time being,” said Sam Abuelsamid, an analyst at Guidehouse Insights.

Tesla’s next generation of electric vehicles should have adopted a completely different production process from the current models.

As Tesla has no intention of spending billions of dollars to build new production facilities or renovate existing factories, we seem to see Tesla continue to produce existing products.

” Consumer demand is weak and affordable electric cars are in doubt.

Some analysts pointed out that in the long run, Tesla needs to think more deeply about how to continue innovation in order to maintain its unique competitiveness in the market.

Musk’s sudden visit to China is intended to break the predicament.

Tesla believes that the future is not only the era of electric cars, but also the era of self-driving.

Tesla is making an all-out bet on self-driving, as can be seen from measures such as the planned release of self-driving taxis and FSD price cuts in the US.

Musk recently touted Tesla’s investment in artificial intelligence infrastructure and the potential to eventually provide self-driving car technology, self-driving taxis and humanoid robots.

Musk even said on a recent conference call, “if there are people who don’t believe Tesla can solve the problem of autopilot, I don’t think they should become investors in Tesla.

” We’ll figure it out.

We’re working on it.

” Toni Sacconaghi, an analyst at Bernstein, is one of the skeptics.

Competitors, especially Waymo, already offer self-driving taxi services on the road, but Tesla is working on self-driving cars, Toni said.

However, Musk’s sudden visit to China seems to bring the possibility of breaking the current predicament for Tesla.

Photo: China Council for the Promotion of International Trade, at the invitation of the China Council for the Promotion of International Trade, Musk arrived in Beijing on the afternoon of April 28 and began a very rapid visit to China.

Before that, people familiar with the matter said Mr Musk was seeking to meet with senior Chinese officials in Beijing to discuss the launch of FSD autopilot software in China and to secure data approval to train his autopilot algorithms.

Dan Ives, a senior analyst at Wedbush Securities, said Musk’s unexpected trip to China changed the rules of the game and Musk needed China to realize his vision of full autopilot.

Subsequently, a series of good news came that Tesla FSD is expected to land in China.

Chinese officials told Tesla that the Chinese government had initially approved Tesla’s plan to launch FSD in China, the Wall Street Journal reported, citing people familiar with the matter.

At the same time, according to the APP of Tesla users, Tesla’s official FSD purchase page description has also changed from “launch later” to “coming soon”.

A person familiar with the matter also revealed that Tesla obtained approval for the landing of FSD in China under certain conditions.

More importantly, Tesla reached an agreement with Chinese technology giant BaiduMap and navigation protocols, as well as meeting the requirements for dealing with data security and privacy issues, remove the two most important obstacles to the landing of FSD in China.

Specifically, first of all, according to people familiar with the matter, Tesla will cooperate with Baidu to deploy its FSD autopilot system based on the lane-level navigation and mapping services provided by Baidu.

It is reported that Baidu is one of only 20 qualified suppliers in China with top mapping qualifications (which can be used in driving assistance functions).

In addition, Shang Guobin, vice president of Baidu, also announced that Baidu Maps True car Navigation will soon be launched in Tesla’s world, creating a more real-time, accurate, safe and efficient navigation experience for the majority of car owners.

, picture source: Baidu map, secondly, on April 28th, the China Association of Automobile Manufacturers and the National computer Network Emergency Technology processing and Coordination Center issued a report on the testing of four safety requirements for automobile data processing (the first batch).

76 models of six enterprises, including BYD, ideal, Lutes, Hezhong New Energy, Tesla, and Xilai, meet the four compliance requirements for automobile data safety.

Tesla is the only foreign company that meets the compliance requirements.

Photo: China Automobile Association, it is reported that in 2021, Tesla announced that he had established a data center in China to localize data storage, and more local data centers will be added one after another.

Next, all the data generated by the sale of vehicles in the Chinese mainland market will be stored in China.

Tesla will make every effort to implement the automobile data safety management and ensure the data security.

Some analysts pointed out that Tesla has adopted the authoritative standards and requirements for the safety of national vehicle data, which is conducive to the comprehensive lifting of the traffic ban and parking restrictions on Tesla and other intelligent vehicles (such as government units, airports, highways, etc.). Based on this, it is not difficult to see that Tesla FSD really seems to be going to enter the Chinese market.

Analyst Dan Ives said in an interview with Bloomberg that Musk’s unexpected trip to China was “a watershed moment.

” “this may open the door for FSD in China and I think it will open up their real golden opportunity.

” Tesla is the “forerunner” and “industry benchmark” in the field of intelligence.

Tesla FSD V12 converted the autopilot system on city streets into a single stack end-to-end neural network trained on the basis of millions of video clips without the need for more than 300000 lines of manual written C++ code, improving the system’s ability to deal with complex driving situations.

In addition, Tesla recently renamed the original “FSD Beta” to “FSD (Supervised)”, and Supervised means “supervision”, revealing Tesla’s growing confidence in the function of FSD.

The market generally believes that the development of new energy vehicles can be divided into two stages, namely, the electrification of the first half and the intelligence of the second half.

At present, the development of China’s new energy vehicles has entered the second half of the intelligent, and technological development is accelerating, FSD will undoubtedly become China’s intelligent “catfish”.

However, as Xiaopeng Motor Chairman he Xiaopeng said, only when more good products and technologies enter, can the whole market and customers have more good experiences, and let the market develop more healthily and accelerate.

Moreover, China is now vigorously promoting opening up plus new quality productivity.

I think whether it is Tesla’s FSD, Xiao Peng’s NGP, or competitor’s NOA, these are all representatives of new quality productivity, and we should support letting a hundred flowers blossom.

Tesla’s future: transformation, and then “God”, with the traditional automakers and new car makers into the field of electric vehicles, Tesla encountered more and more fierce competition.

Tesla has been working hard to open up new development opportunities, and even hopes to change his position.

In early 2024, Musk said: compared with car companies, Tesla’s positioning is closer to AI/ Robotics.

At the first-quarter earnings report, Mr Musk reiterated that Tesla “should be seen as an artificial intelligence robot company” rather than a carmaker.

Musk also outlined Tesla’s ambitious vision for business diversification-artificial intelligence, humanoid robots and running a fleet of millions of self-driving cars.

However, these are based on the software and hardware products that Tesla has not yet completed the development.

Photo: Tesla, Musk has long touted FSD technology as Tesla’s potential cash cow, but Tesla failed to deliver on his promise of full autopilot because his safety and marketing were subject to strict regulation and legal review.

However, Musk has been unswervingly committed to solving the problem of autopilot by Tesla anyway.

Musk once commented on social media platform X, “although he is not betting on Tesla, he is obviously doing his best for autopilot.

” He even pointed out at the meeting, “even if aliens kidnap me tomorrow, Tesla will solve the problem of autopilot.

” Although Musk’s words can show Tesla’s determination, it also makes analysts full of doubts about the future and casts a shadow on Tesla’s transformation.

after all, Tesla’s fundamentals (Tesla’s first quarter revenue comes from selling electric cars) is still electric cars.

Some Tesla investors and analysts say it is much more difficult for Tesla to evaluate the driverless taxi business than low-cost cars.

Tesla, however, the Chinese market seems to bring new opportunities to Musk and the possibility of speeding up his autopilot algorithm.

Since entering the Chinese market ten years ago, Tesla has sold more than 1.

7 million cars in China.

China is not only the world’s largest auto market, but also Tesla’s second-largest market, accounting for about 1/3 of its global sales in 2023.

Therefore, if FSD is approved in China, it could help Tesla provide a buffer against his declining electric vehicle sales and reverse the trend of price cuts hitting his gross profit.

More importantly, as industry experts say, China’s traffic conditions are complex, and there are more pedestrians and cyclists than many other markets, which provides more scenes for speeding up the training of self-driving algorithms.

If FSD is launched in China, Tesla will accelerate the diversified development goals of self-driving technology, artificial intelligence, humanoid robots and self-driving fleet.

In this context, Tesla’s transformation, and then “God”, no longer seems to be a more distant future! , return to the first electric network home page >.

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