Why is Elon Musk becoming the richest person on the planet
and Tesla stock skyrocketing by 740% is just a facade to hide
the behind the scenes chaos? ๐งต
and Tesla stock skyrocketing by 740% is just a facade to hide
the behind the scenes chaos? ๐งต
1)Tesla is supposedly the greatest revolution, happened in the automobile industry.
In spite of the pandemic, Tesla was profitable with a profit of $721mn
In Q2 2021, Tesla made a profit of $1.14bn But still, here are 3 indicators that Tesla is in deep trouble
In spite of the pandemic, Tesla was profitable with a profit of $721mn
In Q2 2021, Tesla made a profit of $1.14bn But still, here are 3 indicators that Tesla is in deep trouble
2)Over-reliance on regulatory credits -Ever since carbon emission has risen and issues around it have spiked up, governments all around the world have introduced incentives for automobile makers to produce ZEVs (Zero-emission vehicles)
3)the number of ZEVs to be produced is based on total vehicles produced
i e If GM, Honda and Toyota have produced 100 in total 10 have to be ZEVsTesla produces all ZEV, earns extra credits
So, companies buy these extra credits for an amount that is pure profit for Tesla
i e If GM, Honda and Toyota have produced 100 in total 10 have to be ZEVsTesla produces all ZEV, earns extra credits
So, companies buy these extra credits for an amount that is pure profit for Tesla
4)In 2020(during a pandemic) $1. 6bn revenue was from credits for Tesla
In Q1 of 2021, Tesla had a profit of $438mn out of which $518mn came from credits as revenue
This may help Telsa in short term but as soon as other companies will roll out their ZEVs it will be in trouble
In Q1 of 2021, Tesla had a profit of $438mn out of which $518mn came from credits as revenue
This may help Telsa in short term but as soon as other companies will roll out their ZEVs it will be in trouble
5)In Q2 of 2021 Telsa generated a profit of $1.14bn out of which only $354mn came from credits
Things were becoming good but then we come to our second point
Things were becoming good but then we come to our second point
6)Tesla's love affair with China :
China's EV market is the fastest-growing market in the world sales of EVs increased by 43% in China in 2021 China accounts for 1. 3mn EVs which is 41 % of all EVs sold worldwide
China's EV market is the fastest-growing market in the world sales of EVs increased by 43% in China in 2021 China accounts for 1. 3mn EVs which is 41 % of all EVs sold worldwide
7)China gave Tesla a $614mn loan to build the Giga factory in China (1st to be 100% owned by a foreign company) It took a record-breaking 160 days to complete the factory
also gave 10 % tax exemption to Tesla
also gave 10 % tax exemption to Tesla
8)Tesla revenue increased from
(2019) $24. 42bn -> (2020)$ 31. 5bn
In China itself it raise from $3bn to $6. 6bn
But tables turned upside down for Tesla in 2021!
(2019) $24. 42bn -> (2020)$ 31. 5bn
In China itself it raise from $3bn to $6. 6bn
But tables turned upside down for Tesla in 2021!
9)In Feb 2021 Chinese authorities held talks with Tesla as customers complained about acceleration irregularities, software updates failure etc.
in return, Tesla had to apologise and comply
in return, Tesla had to apologise and comply
10)In March, China did a security review of vehicles if any information is not going to the US as the automated features in the car relied on camera systems
But the biggest hit to Tesla was :
But the biggest hit to Tesla was :
11)When in april Tesla made a headline at Shangai Auto Show Tesla owner stood on top of the car and said that Tesla breaks' don't work
The media(generally regulated by the government) started posting it on social media and it went viral
The media(generally regulated by the government) started posting it on social media and it went viral
12)Suddenly, Tesla is no longer the favourite brand of Chinese
the sales went down 27% from March to April and 50%
In May on the other hand, Chinese brand BYD saw annual growth of 189.62 % and a monthly hike of 27%
But how sabotaging Tesla will help China ?
the sales went down 27% from March to April and 50%
In May on the other hand, Chinese brand BYD saw annual growth of 189.62 % and a monthly hike of 27%
But how sabotaging Tesla will help China ?
13)Chinese has been known to steal IP from foreign companies especially the US
(one of the reasons why Trump started a trade war with China)
Tesla entry into the market has compelled Chinese brands like BYD & NIO to raise their standards & enhance their performance
(one of the reasons why Trump started a trade war with China)
Tesla entry into the market has compelled Chinese brands like BYD & NIO to raise their standards & enhance their performance
14)Not Only China but competition all around the world has eroded Tesla's market share
In Feb 2021, Telsa recorded a sale growth of 5.4 %
Ford mustang E became 3rd highest selling EV in 2021 in the US
Volkswagen in Europe has beaten Tesla to become top-selling EV maker
In Feb 2021, Telsa recorded a sale growth of 5.4 %
Ford mustang E became 3rd highest selling EV in 2021 in the US
Volkswagen in Europe has beaten Tesla to become top-selling EV maker
15)General Motors has increased investment in the EV and automation sector from
2021 to 2025 to $35bn
All these brands are racing towards the untapped market at the bottom of the pyramid, where Tesla is not able or not willing to cater
2021 to 2025 to $35bn
All these brands are racing towards the untapped market at the bottom of the pyramid, where Tesla is not able or not willing to cater
16)Things to keep in mind after all of this :
i)Tesla is in a crucial position but with the ELON MUSK (the musk effect)Tesla could come out with game-changing strategies to decrease its dependence on credits
ii)Keep an eye on government subsidies in India
i)Tesla is in a crucial position but with the ELON MUSK (the musk effect)Tesla could come out with game-changing strategies to decrease its dependence on credits
ii)Keep an eye on government subsidies in India
17)
iii)Keep an eye on strategic partnerships of companies like Toyota with Panasonic for batteries & Ford with Redwood for battery recycling
iv)Keep an eye on the US-China trade war to learn some geopolitical lessons
iii)Keep an eye on strategic partnerships of companies like Toyota with Panasonic for batteries & Ford with Redwood for battery recycling
iv)Keep an eye on the US-China trade war to learn some geopolitical lessons
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