The world-renowned Tesla Shanghai factory has temporarily suspended production. The world’s largest electric car factory, Tesla’s Shanghai factory, temporarily suspended production on Saturday (December 24), and no new electric cars will roll off the assembly line at Tesla’s Shanghai factory at least in the last week of December.
Tesla China said in an interview with the Global Times on December 25: “The Shanghai factory will still maintain efficient production and excellent output in 2022. The annual production line maintenance work will be carried out as planned next week (that is, this week) for vehicle production. , At the same time, after a year of hard work, the workers also took a break during the maintenance of the production line. The charging piles and other workshops have not stopped, and the media’s statement that the factory has stopped production is not entirely accurate.”
It can be said that the “Tesla Shanghai plant shutdown” is not a major event, but if combined with Tesla’s recent overall market performance, Tesla may have entered an eventful period.
Inventory increases, production cuts, promotions. Sales of electric vehicles in countries around the world, especially China, have fallen and weakened, while the inventory of Tesla electric vehicles has also been increasing. According to previous reports from Reuters, Tesla plans to cut its vehicle production target by 30% in December. The exhaustion of promotions has exposed its exhaustion. Since Tesla’s official website has appeared on Tesla’s official website this month, buyers of Tesla Model 3 and Model Y in the US market can get a promotional advertisement with a price discount of 7,500 US dollars respectively. It plunged 10% on Thursday to its lowest level since September 2020.
Needless to say, “increased inventory, reduced production, and vigorous promotion” are important signals for the industry and even enterprises to turn from prosperity to decline. Currently Tesla is selling cars at a discount to clear inventory, and at the same time needs to prepare for the economic recession. It is worth mentioning that Tesla has launched promotional activities in the Chinese market many times since September. Therefore, Tesla this time Shutdowns could also be related to excess capacity.
Shares have plummeted exceptionally this month. During the month of December this year alone, Tesla stock has plummeted 36%, which will also be the worst month for Tesla stock ever. In comparison, in March 2020, when the sudden spread of the new crown epidemic caused financial markets to plummet, Tesla stock fell only 22% that month.
The share price has been severely oversold this year. As of December 24, Tesla’s stock price has fallen by more than 64% this year. The end of the year is approaching, and Tesla’s stock price is about to achieve its worst annual performance since it went public. Since the stock price hit an all-time high in November 2021, Tesla’s market value has evaporated by about 70%. At the same time, global economic uncertainty is deepening, while consumers have a growing choice of other electric vehicles, making investors worried that Tesla may need to sacrifice profitability to maintain growth rates.
Shares of Tesla have fallen more than the broader market and many of its rivals. At present, Tesla’s market value is 388.9 billion US dollars, and it has fallen out of the top ten market value of listed companies in the world. The decline in Tesla’s stock price marks a sharp downturn for the world’s most valuable auto company. To add insult to injury, the industry has been plagued by chip shortages, global supply chain issues, an overall market decline in a rising interest rate environment, and production shutdowns related to the new crown epidemic. Gordon Johnson, known as Tesla’s biggest short, even made a bolder prediction: the stock price will continue to fall by 80%.
The market share in the United States is declining year by year. A new report released by S&P Global Mobility last month shows that Tesla’s market share in the United States is showing a downward trend year by year. As of the third quarter of this year, Tesla’s market share of newly registered electric vehicles in the United States was 65%, down from 71% in the same period last year. In 2020, Tesla’s market share in the United States was once as high as 79%. S&P predicts that Tesla’s dominance in the U.S. is being challenged as rivals offer more and more cheaper models. Tesla’s market share could drop significantly below 20% by 2025, the firm predicts.
Musk empathizes with others, loves the new and dislikes the old. Since Musk acquired Twitter for $44 billion in October this year, confusion and controversy have continued, including the recent staged Musk shutting down Twitter on the grounds that some media reporters leaked the location of his private plane with his family. The farce of the journalist’s Twitter account. Some investors worry that Musk’s empathy for Twitter mergers and acquisitions and business management has affected his attention and operation of Tesla. For example, Dan Ives, an analyst at Wedbush, an American investment bank, said: “Musk is engrossed in Twitter, which is an ongoing nightmare for Tesla investors.” (Fortune Chinese Network)
The author Wang Yanxing is a columnist of Fortune Chinese Network, a senior researcher at the Chongyang Institute for Financial Studies of Renmin University of China, a former deputy secretary-general of the China Banking Association, and a consulting expert of the Internal Control Standards Committee of the Ministry of Finance.
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