Author: Jeff
(Image from Tesla earnings)
Recently, Tesla issued a financial report, after reading the financial report, Xiaobian only has one feeling, that is, Tesla is not only making money, but also really making money, with a daily net income of more than 260 million yuan, and even calling it a "printing machine" is not excessive.
According to its first quarter 2022 report, Tesla's non-GAAP net profit increased by 255% year-on-year to $3.736 billion, and on average, Tesla made about $41.5111 million per day in the first quarter.
What is the truth of Tesla's money-making under the triple package of epidemic, supply chain crisis, and price increases of key raw materials?
The average gross profit of the bicycle exceeds 100,000 yuan Tesla sells cars and sells cars
As we all know, Tesla's main business is new energy vehicles, in the main business, Tesla performance is quite good, it can be said that selling cars are selling crazy, in this regard, in the earnings report and conference call, Tesla unabashedly emphasized that this quarter, whether it is car delivery, revenue or profit margins and other data performance is "record".
Let's take a look at the key data of Tesla's first quarter 2022 financial report:
The overall operating income was US$18.756 billion, an increase of 81% year-on-year, and the gross profit margin was 29.1%, an increase of 7.8 percentage points year-on-year;
Operating profit of US$3.603 billion, an increase of 507% year-on-year, operating profit margin of 19.2%, an increase of 13.5 percentage points year-on-year;
Net profit attributable to equity owners (Non-GAAP) was $3.736 billion, up 255% year-over-year.
The image is taken from Tesla's 2022 Q1 financial report
According to the data, the operating income of Tesla's automotive business in the first quarter was $16.861 billion, an increase of 87% year-on-year, and the gross profit margin was 32.9%, an increase of 6.4 percentage points year-on-year. Combined with the delivery of its 310048 vehicles in the first quarter, the average selling price of its bicycles exceeded US$54,300 (about 350,000 yuan) and the average gross profit of bicycles exceeded US$17,800 (about 110,000 yuan).
In layman's terms, for every car Tesla sells, the gross income exceeds 100,000 yuan, which is probably amazing to most automakers.
While making a lot of money, Tesla also did not forget to step on a competitor, and specially announced a comparison chart of its operating profit margin with bmw, Volkswagen, Toyota and other traditional car companies, as follows:
Image from Tesla's 2022 Q1 earnings report
It is not difficult to see that Tesla's operating profit margin has entered a rapid growth mode since 2020, and by the fourth quarter of last year, it has almost completed the surpassing of bmw, Daimler, Volkswagen, Ford, GM, Toyota, Honda, Hyundai, Nissan and other traditional car companies. In the face of Tesla's high curve in the first quarter, I believe that the above traditional car companies will increase the pressure sharply, of course, it is no wonder that its market value was once proud of BMW, Mercedes-Benz, Volkswagen and other series of traditional car companies.
Tesla's focus in 2022: capacity increases
Generally speaking, in the automotive industry, the secret of making money for enterprises is very simple, that is, open source throttling, open source is to sell more cars, and throttling is to control costs.
Specific to Tesla, its money-making intensity is to sell more cars, and the premise of selling more cars is to expand production capacity.
In 2021, Tesla's Shanghai plant and the US California plant have a combined design capacity of about 1.05 million vehicles, while the newly built Berlin plant in Germany and the Austin plant in the United States have been delayed due to environmental resistance. In the end, Tesla only completed the production of 930,400 vehicles, failing to meet the million expectations.
The lack of capacity directly limited the delivery volume, which made Musk feel very upset, so he made it clear at the beginning of 2022 that Tesla has no new product planning in 2022, and capacity improvement is the top priority.
Subsequently, with Musk's "awkward dance", two super factories in Berlin, Germany and Austin, which have a design capacity of 500,000 vehicles, were officially opened, directly doubling Tesla's "paper" production capacity.
Tesla Austin factory opened (image from Tesla earnings report)
With production capacity, Tesla has a bigger goal, that is, to produce more than 1.5 million vehicles in 2022 and deliver more than 1.4 million vehicles, but the epidemic and supply chain problems are still severe, and tesla, which completed 300,000 and 310,000 units in the first quarter, is difficult to complete the annual target.
At the same time, Tesla's throttling work is also doing well, and it can be said that it is notoriously frugal in the circle, such as not advertising like many traditional car companies, which is popular for everyone, and indeed saves a lot of marketing expenses. But what really makes Tesla money is its incredible productivity and extreme cost control.
Tesla's factory in California is regarded as the most productive car factory in North America, according to the 2021 production data analysis of more than 70 automobile plants in North America by relevant agencies in the United States: Tesla's California plant produces an average of about 8550 cars per week, ranking first. In second place is Toyota's Georgetown, Kentucky plant, which produces an average of about 8,427 cars per week. BMW's Spartanburg plant in South Carolina ranked third with an average weekly production of 8,343 vehicles. In fourth place is Ford's Dearborn plant in Michigan, which produces an average of about 5,564 vehicles per week.
It is also worth mentioning that Toyota's Kentucky factory is almost twice the size of Tesla's California factory, and if you calculate the output value per unit area of the factory, Tesla is far ahead.
In addition to production efficiency, including large castings, structural battery packs, 4680 batteries and other items are also helping Tesla reduce product costs.
Tesla automobile manufacturing plant (image from Tesla earnings report)
Tesla said in its 2021 earnings report that operating margins have always kept rising quarter by quarter. In the third and fourth quarters of 2021, Tesla reduced the cost per vehicle to $36,000 (about 230,000 yuan). The cost here refers to COGS, which refers to all costs directly related to the production of the product, excluding management, sales, and marketing expenses.
This is basically comparable to its gross profit figures for the first quarter of 2022.
According to a report by the Nihon Keizai Shimbun in November 2021, Toyota, the world's largest automaker, has a profit difference of three times that of Tesla per vehicle. According to the report, Toyota's profit per vehicle is about 250,000 yen, Tesla's is as high as 730,000 yen, and the United States General Motors (200,000 yen) and Germany's Volkswagen (180,000 yen) are also far behind Tesla.
According to a data released by QUICK FactSet last year, Tesla's gross profit margin reached 27% from July to September 2021, which is 6 percentage points higher than Mercedes-Benz parent company Daimler (21%).
The most worthy competitor of traditional car companies: Tesla quickly solved the global semiconductor shortage
Tesla has become the object of pursuit by many new car-making forces, and has even become one of the most worthy opponents of many traditional car companies, which is inseparable from its ability to quickly solve the shortage of semiconductors in the near future.
In October 2021, Volkswagen CEO Dies invited Musk to address Volkswagen executives online and praised Tesla's impressive ability to quickly address the global semiconductor shortage.
At the March 2022 South by Southwest conference in Austin, Texas, USA, Diess again praised Tesla as "a pioneer and a benchmark for electric vehicles" and said Volkswagen welcomed competing with Tesla.
The current scenery is certainly enviable, but in fact, Tesla has also experienced the same "painful growth" stage as the current car-making new forces, and has also been looked down upon by many people, and think that Tesla will go bankrupt if it can't play for a few years. Tesla has only lived a prosperous life for just two years.
After 15 consecutive years of losses, Tesla finally made a profit in 2020 and achieved more substantial overall growth in 2021. These two years coincided with the global COVID-19 pandemic, and the industry suffered an unprecedented blow. Being able to turn a profit during a period of market turmoil and sustain growth, Tesla's strategic realignment has played a crucial role.
In 2017, Tesla produced and sold only more than 100,000 vehicles a year. By 2021, Tesla will produce and sell more than 930,000 vehicles, an increase of nearly 10 times over five years ago. All this is due to Tesla abandoning the high-end route and boldly launching the Model 3 and Model Y models.
It can be seen that Tesla chose a set of high-open-low-go playing methods, first using Model S and Model X to label themselves high-end luxury cars, and then quickly sinking to launch Model 3 and Model Y models, completely opening up the mass market. Tesla's approach has also been respected by many new car-making forces, first pushing high-end models, and then pushing Volkswagen models, so as to achieve the purpose of rapidly occupying the market.
At present, from the model production and sales and revenue trend chart, the decline in the production and sales of high-end models has not affected Tesla's profits, and Tesla's sales from 2017 to 2021 have soared from $11.759 billion to $53.823 billion, an increase of nearly 5 times. Gross margin grew from 18.9% to 25.3%, and net profit grew from a loss of $1.962 billion to a profit of $5.519 billion.
Today, when most of the new car-making forces are still struggling to "burn money", Tesla has opened a fast money-making model. What is the secret of Tesla's money? Can the success pattern be replicated? I am afraid that this is not only a problem that new car-making forces, but even traditional car companies are thinking about.