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The market value has lost 280 billion RMB! Tesla's net profit plummeted 44%

2024-03-02 Update From: AutoBeta autobeta NAV: AutoBeta > News >

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AutoBeta(AutoBeta.net)10/19 Report--

Tesla released its financial results for the third quarter of 2023 on October 19, Beijing time. Tesla's total revenue in the third quarter was $23.35 billion, below analysts' expectations of $24.1 billion, up 9 per cent from a year earlier and the slowest pace in three years, while operating profit fell 52 per cent year-on-year to $1.764 billion, according to the report.

On the profit side, Tesla's net profit in the third quarter was $1.853 billion, down 44% from the same period last year, showing a significant downward trend compared with the first and second quarters. Tesla explained the decline in profits, the underutilization of the new factory, the increase in operating expenses caused by the upcoming electric pickup truck Cybertruck, as well as the expenditure on artificial intelligence and other projects.

In addition, gross profit margin has always been a financial indicator concerned by investors and the market. According to the financial report, Tesla's gross profit margin fell to 17.9% in the third quarter of this year, down 7.2% from 25.1% in the same period last year. For comparison, Tesla Q1 gross profit margin dropped from 19.3% to 18.2%. This also means that Tesla's gross profit margin has continued to decline in three quarters this year, which is also the lowest gross profit margin in nearly four years.

As for the reason for the decline in gross profit margin, it is mainly dragged down by Tesla's large-scale price reduction during the year. During the third-quarter earnings call, Tesla CEO Elon Musk said Tesla would still try to reduce the price of his car. "the importance of cost cannot be overemphasized. We have to make our products more affordable so that people can afford them," he said. Like Mr Musk, Vaibhav Taneja, Tesla's chief financial officer and chief accounting officer, stressed that the company would "unswervingly pursue further cost reductions in 2024", which involves engineering and plant operations.

Prior to this, Tesla also said: "if the macroeconomic situation continues to be turbulent and downward, Tesla will continue to sacrifice profit margins to promote sales growth." It should be noted that Tesla's gross profit margin of "trading for a car at a price" has been surpassed by BYD. According to the data, in the middle of this year, BYD's gross profit margin was 18.7%, while Tesla's gross profit margin was only 18.2% in the same period.

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Of course, the decline in Tesla's delivery volume and the upgrading of factory equipment are also one of the key reasons affecting its gross profit margin.

According to the data, Tesla produced a total of 430500 new cars worldwide in the third quarter, an increase of about 18% over the same period last year, which was lower than the market estimate of 462000. Of these, 13700 were Model Splash X models and 416800 were Model 3Universe Y models. In terms of new car delivery, Tesla delivered a total of 435100 vehicles worldwide in the third quarter, an increase of about 27% over the same period last year, but lower than the market estimate of 456700. Of these, 16000 were Model Splash X models and 419100 were Model 3 Universe Y models, lower than the market estimate of 439400.

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Tesla said on the earnings call that the quarter-on-quarter decline in sales was due to the shutdown of factory upgrading plans. It should be noted that this is the first time that Tesla has delivered less than output since the second quarter of 2022. For comparison, Tesla produced a total of 479700 new cars worldwide in the second quarter, an increase of 86% over the same period last year, and delivered 466100 new cars, an increase of 83% over the same period last year.

There was a sign that Tesla's delivery volume was lower than output in the third quarter. Tesla CEO Elon Musk said earlier: "We expect production to decline slightly in the third quarter because we will stop work in the summer to upgrade the plant."

It is understood that one of the main reasons for the "upgrading and transformation of the production line" is that Tesla Model 3, which has not been changed for six years, has ushered in the update, and the related upgrading of the production line has brought about the planned suspension of production. Tesla released a new version of the Model 3 and announced the pre-sale price on Sept. 1. officials say the car will be delivered in the fourth quarter, while the old model sold out at the end of the third quarter. As a new model, the new car is mainly upgraded for appearance design, driving experience, cockpit interaction and safety. According to industry insiders, the arrival of the new Model 3 also led to an upsurge of wait-and-see mood among consumers in the third quarter, affecting Tesla's quarterly sales.

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On October 19th, Tesla's official website officially changed the Model 3 refurbished version from the pre-sale state to the sales state, of which the rear wheel drive refurbished version starts at 259900 yuan and the long-lasting all-wheel drive new version starts at 295900 yuan. It is understood that the pick-up cycle of the new car is expected to be 6-9 weeks. Tesla will start the delivery of the first batch of vehicles at the end of October, and the test drive will arrive at the stores one after another at the end of the month.

In addition, Tesla officially announced that the delivery of its pure electric pickup model, Tesla Cybertruck, will begin on November 30. The Cybertruck, Tesla's most important new product since Model 3, was previously thought to significantly boost Tesla's profitability, but the car has not yet opened a reservation channel on Tesla's Chinese website, and the subsequent pricing is unknown.

Tesla officials said that despite a month-on-month decline in production in the third quarter, the 2023 delivery target remained unchanged at about 1.8 million vehicles. By the end of the third quarter, Tesla delivered a total of 1.3241 million vehicles in the first three quarters, which also means that Tesla needs to deliver about 475000 new cars in the fourth quarter to achieve his target. According to the industry, if Tesla wants to achieve the delivery target, he will mainly rely on the new Model 3 and Cybertruck, which is scheduled to go public in the fourth quarter.

Or affected by the above news, by the end of the day, Tesla was down 4.78% at US $242.68, with a market capitalization of US $38.6 billion (about RMB 282.4 billion) lost overnight. The latest market capitalization is now US $770.265 billion.

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