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After three years, Tesla fell to the altar?

After announcing its second-quarter financial report data, Tesla has recently decided to suspend production of new cars at its two major factories in Germany and China.

In the past April-June, Tesla delivered about 254,700 electric vehicles globally, down 18% from the 310,000 in the first quarter.

The production and delivery of new cars are not satisfactory. Tesla's current priority is to increase production to meet the demand for new car deliveries in the second half of the year. The super factories in Berlin and Shanghai are crucial to increasing production and efficiency.

It is understood that the reason why Tesla decided to press the pause button on the production of the Berlin and Shanghai factories is to have enough time to improve its internal production process, such as reducing the production time required for each vehicle at the manufacturing base.

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Retreat to advance, upgrade production line

Foreign media broke the news that Tesla’s factory near Berlin will be shut down for two weeks from July 11, with the goal of approximately doubling production efficiency from August. It was previously reported that Tesla will stop most of the Model Y assembly line at the Shanghai plant in the first two weeks of July, and then the Model 3 production line will be suspended for about 20 days from July 18.

Sources told Reuters that the upgrades at the two plants in Berlin and Shanghai are expected to be completed in early August, when Tesla’s production process will be optimized and adjusted.

German media quoted people familiar with the matter as saying that some of the upgrades at the Berlin plant will focus on manufacturing efficiency, including reducing body production time to about 30 seconds per manufacturing station, rather than the current three minutes.

Interestingly, Tesla's Berlin factory only started production in March this year. Some European media also revealed that the reasons for the suspension of production at the Berlin factory are more complicated. Musk has been very dissatisfied with the production status of the factory, including the slow production speed, the product quality is not up to expectations, and suitable workers are too difficult to recruit.

In other words, pressing the pause button in the Berlin factory is not so much an "upgrade" as it is a "rectification", and the rectification time is at least two weeks.

Tesla previously said the company wanted the Berlin plant to produce 500,000 cars a year, but so far the plant has only been able to produce 1,000 a week — about one-tenth of what Musk had originally planned, something Musk couldn’t tolerate .

In the past second quarter, Tesla not only experienced a prolonged shutdown during the outbreak of the Shanghai Gigafactory, but its new factories in Texas and Berlin also faced the problem of slowing production growth. A week ago, Musk also called the Berlin and Austin factories a multi-billion-dollar "burning pot", underscoring the reality of the company's capacity problems, and Tesla's free cash flow is likely to be affected by disruptions to working capital .

It is worth mentioning that the production capacity dilemma of Tesla’s Berlin factory also has other factors. According to German media analysis, another reason for the low efficiency of the factory is that most of the engines used in new cars come from China. Because of the Shanghai epidemic blockade, in the past The three-month supply of parts has been tough.

An internal employee of the Berlin factory revealed that the lack of employees is also one of the reasons why the production capacity of the base did not meet expectations. Currently, Tesla's Berlin plant employs about 4,500 employees, but if the factory is at full capacity, it will need to increase to at least 9,000 people to meet production needs.

Musk, who is far away in North America, is also well aware of the plight of the Berlin factory, but the expansion plan of the factory is also difficult, because the parliament where the factory is located launched a vote on it, but the majority voted against it.

What is certain at present is that Tesla's Berlin factory and Shanghai factory are suspended and adjusted at almost the same time, and July will be an important turning point for the company to "retreat forward". An internal document that was exposed earlier showed that Tesla plans to suspend most production at the Shanghai plant in the first two weeks of July, but so far, Tesla China has not made any comment on the news.

02

Anxiety and Anxiety

Tesla’s performance in the second quarter was indeed unsatisfactory, with a total of 254,700 electric vehicles delivered globally, down 18% from 310,000 in the first quarter. This is also the company’s first month-on-month decline in the past two years. , breaking the steady growth trend that began in the third quarter of 2020.

In late June, before the data was released, Musk bluntly stated that "Tesla is suffering in a bad second quarter." In addition to the pressure on the supply chain and the epidemic, the ramping production capacity of the Berlin factory and the Austin factory also hurt him. Through the brain.

In the short term, whether in the Chinese market or globally, the supply chain problems of automakers are not over yet, and maintaining the normal operation of core factories is still very difficult. But for Tesla, the "disappointment" in April-June performance may be the beginning of a turning point in fortune. After years of great progress, the largest electric vehicle manufacturer in the United States is still unable to escape the cycle. challenges, and new challenges will be faced in the next few years.

Take the American base camp as an example.

GM and Ford could outsell Tesla by 2025, according to the latest figures from Bank of America's annual Car Wars study released last week.

At present, Tesla has more than 70% market share in the electric vehicle field in the United States, but with the gradual development of traditional automakers and new car manufacturers in the electric vehicle market, this proportion may drop in the next three years. about 11%. At the same time, Detroit giants such as General Motors and Ford will continue to make efforts to electrify, and their share in the field of electric vehicles may be close to 15%, which will have a great impact on Tesla.

For a long time in the past, traditional automakers with a history of 100 years have been the absolute leaders in the automotive field, but it is still unknown whether these established players can continue to lead the market in the era of electric vehicles.

In Car Wars' annual forecast report, John Murphy, senior auto analyst at Bank of America, said that competitors still have a good chance to close the gap with Tesla's product end and increase sales in sales. Catch up. "Also, Tesla has not used its capital most efficiently over the past few years, and its capacity has not been expanding as quickly as expected."

"Tesla's dominance will be eroded." The latest Bank of America report pointed out that Tesla's dominance in the electric vehicle market, especially the US market, is coming to an end.

Especially in the next few years, its status in the rivers and lakes may change drastically in the opposite direction, and the high-ranking electric vehicle leader does not rule out the possibility of being pulled down from the altar.