Say goodbye to “selling carbon monks”, Tesla jumps out of the cycle of over-selling and small profits

The first double-digit operating profit margin is worth looking forward to in the second half of the year.

At 4 o’clock in the morning on July 27, 2021, Tesla’s 2021Q2 financial report arrived as scheduled. The first thing I did after downloading was to pull the PDF to the image area as fast as possible. After searching for two minutes in an atmosphere of tension and anticipation, I confirmed one thing-this time Tesla did not release Cybertruck during the earnings report.

I sighed for a long time. I felt a little lost when the stone fell to the ground. I thought there would be a surprise this time, but the protagonist of this financial report is already the financial report itself.

However, after a quick review of the data, I found that the financial report this time was so good that it couldn’t be better.

01 Record highs in history, everywhere

200,000 units in a single quarter

From the beginning of delivery, Tesla delivered 201,304 vehicles in Q2 this year, including 199,409 Model 3/Y and 1,895 Model S/X. While setting a new single-season delivery high, Tesla’s cumulative delivery volume in the first half of the year came It reached a record 386,181 units. Both of these figures more than doubled in 2020Q2, which was affected by the epidemic.

Say goodbye to "selling carbon monks", Tesla jumps out of the cycle of over-selling and small profits

List of deliveries

Such delivery results are actually not surprising in the context of Tesla’s global market as the overall supply is in short supply, and production capacity continues to climb. It can be seen that Tesla has withstood the MCU chip shortage in the automotive industry in the first half of the year and achieved growth. On the other hand, such data also shows that the negative public opinion in the country has not had a big impact on Tesla’s overall sales some time ago.

After all, short-term public opinion will indeed have a certain impact on Tesla’s domestic market demand, but before the completion of the Berlin plant, the cars built at the Shanghai plant can also be exported overseas to Europe, Asia-Pacific and the Middle East where the supply side is still in large vacancies. The region, speaking of it, has the feeling of “cutting peaks and filling valleys.”

Finance: a big leap in earning power

However, compared with the delivery data, the financial data of the second quarter is more eye-catching. The following are the main statistics.

Say goodbye to "selling carbon monks", Tesla jumps out of the cycle of over-selling and small profitsMain financial information

  • Total revenue was US$11.958 billion, an increase of 15.1% month-on-month and a year-on-year increase of 98%. Revenue from the automotive business was 10.206 billion US dollars (of which 354 million US dollars were revenue from the sale of carbon emission credits), an increase of 13.4% from the previous month and an increase of 97% from the same period last year;
  • The profit of the automobile business was US$2.899 billion, an increase of 21.6% month-on-month and a year-on-year increase of 120%;
  • The total gross profit is 2.884 billion US dollars, the overall gross profit margin is 24.1%, and the vehicle gross profit margin is 28.4%;
  • Cash and cash equivalents reached 16.229 billion U.S. dollars;
  • Operating cash flow minus capital expenditures (free cash flow) US$619 million;
  • Operating income under GAAP rules was US$1.312 billion, and operating profit margin reached 11.0%;
  • Net profit was 1.142 billion U.S. dollars, a year-on-year increase of 998%, and a month-on-month increase of 160.7%

To put it more bluntly, in 2021Q2, Tesla has the following indicators:

  • Total revenue
  • Gross profit
  • Gross margin
  • Automotive business revenue
  • Gross profit of automotive business
  • Bicycle gross profit margin
  • Operating income
  • Operating margin
  • Net profit

All have set record highs. It is no exaggeration to describe the financial data of 2021Q2 as a full house.

If you combine the delivery data that set a record high in 2021Q2 and the delivery of only 2,340 units of the high-end product line Model S/X, behind the above data is an exciting thing for investors: as the delivery volume increases, Tesi While pulling the Model 3/Y product line to bear more of the bulk of sales, the profitability of bicycles has not decreased, but has increased with the reduction of costs and the improvement of production efficiency.

The result is that Tesla’s net profit for the single quarter of 2021Q2 can be tied to the sum of the net profit of the previous four quarters by adding one million US dollars.

It’s no longer “selling carbon monks”

In addition, my other focus is on Tesla’s carbon credit revenue this quarter. This easily overlooked data is of great significance to me, because although this is Tesla’s eighth consecutive quarter of profitability, in the previous seven quarters of profitability, Tesla’s revenue from selling carbon credits was greater than its net profit.

In other words, in the previous 7 quarters, Tesla was still at a loss if it did not sell carbon credits. In this regard, colleagues in the company often ridicule Tesla as a “sell carbon.”

And 2021Q2 is the first time in Tesla’s history that its net profit is higher than its carbon emission credit revenue. After removing the $354 million in revenue from selling carbon credits, Tesla’s profit in the second quarter was still $788 million.

Although the official did not specifically express this, this is actually a memorable milestone in the history of Tesla’s development. Tesla’s self-hematopoietic ability has risen to a new level this quarter. For the first time, the double-digit operating interest rate has also begun to break Tesla out of the “over-selling and small-profit” cycle, and at the financial report level, it has shown the transformation from a car company that represents traditional manufacturing to a technology company.

02 Factory, new car and FSD

Capacity pressure is still

Because the Berlin factory and the Texas factory are still under construction, Tesla’s current production capacity is still being carried by the Fremont factory and the Shanghai factory.

Say goodbye to "selling carbon monks", Tesla jumps out of the cycle of over-selling and small profits

The Fremont plant currently has an annual production capacity of 600,000 units, of which the Model 3/Y is 500,000 units, and the Model S/X after the facelift is 100,000 units. However, Model X has not yet begun to deliver, and Model S is still in the process of ramping up production capacity, and cannot reach the established annual production target in the short term.

Fortunately, the Model S production line transformation and production ramp-up preparations have been almost completed in Q2. Musk said at the Model S Plaid delivery ceremony on June 11, “In the next few weeks, hundreds of units will be delivered every week, and then It will gradually increase to more than 1,000 units per week.” Waiting for the completion of the ramp-up of production capacity, S/X delivery volume in the second half of the year is expected to usher in the most ferocious growth in recent years.

Say goodbye to "selling carbon monks", Tesla jumps out of the cycle of over-selling and small profits

Excluding Model S/X, strong demand for Model 3/Y in the US domestic market has also eaten up most of the production capacity of the Fremont factory, and Tesla has made two-handed adjustments in the face of the resulting insufficient capacity. The first is that the first model produced by the Texas plant is Model Y, which will increase the subsequent supply capacity to the local market. The other is to vigorously increase the Model Y production capacity of the Shanghai plant and provide part of the Model Y production capacity for export before the completion of the Berlin plant.

The protagonist in the second half of the year: Shanghai Factory & Model Y

There is no doubt that the stable high output of Tesla’s Shanghai plant played a very critical role in the record delivery volume in the first half of the year. At the same time, the production capacity of the Shanghai plant still has room for growth in the second half of the year as the second-phase Model Y plant and the supply chain are further improved.

On the demand side, the launch of the domestically-produced Model Y this month has added a lot of bargaining chips to Tesla’s sales expectations in the second half of the year. After a subsidy of 276,000, the starting price of the Model Y series has been reduced by 71,900.

Say goodbye to "selling carbon monks", Tesla jumps out of the cycle of over-selling and small profits

While the new car has more space as an SUV, the NEDC battery life of 525 km is 57 km longer than that of the standard Model 3. It starts with standard rear seat heating, steering wheel heating, 14-speaker audio, fog lights, and HEPA filter. The price is only 25,100 more expensive than Model 3, and the price-performance ratio is outstanding.

This car is self-evident for Tesla’s sales increase in the domestic market. It can even be predicted that Model Y will top the domestic mid-size SUV sales list in the second half of the year. It is basically a matter of time.

In addition, because of the delay in the construction of the Berlin plant, Model Y for the European market will also be supplied by the Shanghai plant for a period of time. On July 9th, Model Y was launched on the official websites of European countries.

Say goodbye to "selling carbon monks", Tesla jumps out of the cycle of over-selling and small profits

It is not difficult to notice that the models put on the shelves in Europe this time are the 4-wheel drive long-range and high-performance versions of Model Y. The domestic demand for these two versions will undoubtedly fade a lot under the impact of the standard Model Y. At this time, the high-end Exporting the redundant production capacity vacated by the models to the European market can be said to be a very clever choice, and it is another “peak-cutting and valley-filling” for maximizing the utilization of production capacity.

What happened to Cybertruck and Semi?

Unsurprisingly, the ticket bounce happened again, and Musk said that the semi-trailer mass production time will be postponed to 2022. The reason is “I want to concentrate on building factories, and there are still limitations in terms of the current supply chain and battery capacity, which are not enough to support mass production.”

But for consumers, Cybertruck is definitely more concerned. Before the earnings report, Musk had already revealed several news.

    • The design of the production car is almost the same as the prototype car;
    • Cybetruck does not have a door handle, and the door is opened by automatically identifying the occupant;
    • The production car will be equipped with 4-wheel steering, which can effectively reduce the turning radius of Cybertruck as a large car and improve handling.

Say goodbye to "selling carbon monks", Tesla jumps out of the cycle of over-selling and small profits


Model 3 and Cybertruck size comparison

Say goodbye to "selling carbon monks", Tesla jumps out of the cycle of over-selling and small profits


The bad news is that Musk’s wording after this financial report is more cautious than the previous confident statement of “mass production at the end of 2021.” He emphasized that Cybertruck’s mass production progress will depend on many aspects, of which the key node is still Battery production capacity, if the supplier’s production capacity exceeds expectations, the progress will naturally be faster.

The main component that affects the mass production of these two cars is undoubtedly the 4680 battery. The good news is that Musk said that the reliability verification of the 4680 battery itself has been completed, but it needs to be pointed out that it is reliable to large-scale under small-scale mass production. Reliability still has a long way to go in production conditions.

Musk’s forecast for the production capacity of 4680 cells is to reach an annual production capacity of 100 GWh by the end of 2022. If the capacity is converted, assuming that the average charge capacity of Tesla’s 4680 batteries is 100 kWh, then by the end of 2022, the capacity of Tesla’s supply chain 4680 batteries can meet the demand of 1,000,000 vehicles per year. The monthly production capacity is 83,000 units.

This shows that Tesla has made sufficient preparations for Cybertruck’s mass production next year. From a supply point of view, 4680 batteries are bound to become the place for Tesla battery suppliers to fight for the next round of bayonet. This kind of supply volume competition has been enough to affect the market structure among power battery suppliers. At present, Panasonic, LG and numerous domestic upstream and downstream suppliers have already invested in preparations for this competition.

FSD: Comprehensive vision, subscription online

In July, the FSD Beta V9.0 software was launched on a large scale in the United States. The new version of the software enabled the previous small-scale push of the surround vision algorithm. Now the vehicle under the FSD Beta 9.0 software will call all ADAS cameras to stitch and distort the images to fit the surroundings. The 3D model of the road environment is displayed in the central control visualization UI.

Say goodbye to "selling carbon monks", Tesla jumps out of the cycle of over-selling and small profits

The brand-new surround vision neural network has been greatly improved in terms of accuracy, perception range and other capabilities. With higher-level control algorithms, FSD 9.0 software opens up the city street auto-driving function to users, which can realize intersection steering, vehicles and obstacles. Avoid actions such as avoidance. In addition, the DMS camera in the car is also turned on in the new version of FSD for driver status monitoring.

Another thing Tesla did this year is to cancel the front millimeter-wave radar on Model 3/Y models, and completely use visual algorithms for distance detection. Tesla’s view on this is that after training with data from more than one million vehicles, the current vision has enough reliability to replace radar in certain scenarios.

In addition, this month, the FSD in the United States will launch a subscription system. The subscription price for basic assisted driving users is 199 US dollars/month, and the subscription price for EAP users is 99 US dollars/month. Opening FSD requires the user’s vehicle to have HW3.0 hardware, if not, additional money will be needed to upgrade.

Say goodbye to "selling carbon monks", Tesla jumps out of the cycle of over-selling and small profits

More detailed technical content about FSD This financial report did not expand too much. It is expected that there will be more fierce news on the subsequent Tesla AI Day. What’s more regrettable is that when FSD Beta 9.0 came to China, I didn’t mention it this time. For this time, based on the software training data problem, my prediction is still the second half of next year.

03 Summary of the conference call

Q2 In the conference call after the earnings report, we compiled some key information, which is recorded as follows.

Chip shortage

Although Tesla’s total revenue in 2021Q2 exceeded 10 billion U.S. dollars, the impact of the chip shortage is indeed serious. It is difficult to say how long it will last. Tesla cannot control it and it is more difficult to predict. And if you change the chip, the software actually has to be rewritten.

In the financial report, Tesla also said that in order to alleviate the semiconductor shortage, Tesla’s firmware and electrical engineering teams have been working hard to design, develop and verify 19 new different controllers.

Capacity issues

The construction progress of the Texas Super Factory is very fast, and it has been built in one year. We are now holding a conference call with everyone at the Texas Gigafactory. This year Model Y will also be put into production in Texas and Berlin as planned. Mass production is very complicated, it is difficult to tell, there are many uncontrollable variables. It’s easy to set up a tram startup, and there are many in the United States. But Tesla is the one that hasn’t gone bankrupt, and this is the most difficult.

The Model Y production lines of the Texas and Berlin super factories will be roughly similar to the existing ones, but there are many differences. Berlin Model Y will use an integrated die-cast rear body and front body. In terms of batteries, Berlin’s mass-produced Model Y will directly use 4680 batteries.

More details on opening overcharge

For non-Tesla users of other brand models, using Tesla overcharge is very simple, and the entire App operation is enough. However, there may be a time limit for charging, and the rate may fluctuate with the peak of electricity consumption, and trough pricing will be carried out.

Musk reiterated that Tesla’s goal is to promote sustainable energy transformation, not to build barriers to attack opponents. In addition, the opening of the overcharging network helps to dilute costs, allowing Tesla’s overcharging network to develop faster and on a larger scale.

Mass production of 4680 cells

Tesla is cooperating with its existing suppliers to produce 4680 cells. With sufficient battery supply, Tesla will have an annual output of 1 million Powerwall next year. In the long run, the total annual battery production capacity of Tesla and its suppliers will reach 1,000-2,000 GWh.

The performance and service life verification of the 4680 cells has been verified at the Kato factory in California, and the production verification is nearing completion, but 10% of the processes are currently the bottleneck limiting the output.

Tesla conducted a crash test on the internal structure of the front die-cast body plus CTC single structure battery pack, and the result was no problem.

Expectations for FSD subscription

There is no point in setting a specific target at present. Tesla focuses on promoting FSD. In terms of regulation, at least in the US market, Tesla has not been affected.

Musk said that once it proves that autonomous driving systems are safer than human drivers, they may be more popular with regulators. During the period, he talked about the example of elevator operators. The elevator used to be manual, but now it is fully automatic. The same thing may happen to autonomous driving.

04 Thoughts on Q2 Financial Report

It’s another season to pave the way

Although 2021Q2 has set new highs in delivery, revenue, profit, profitability and other financial report data, looking at the second half of this year, 2021Q2 is just a foreshadowing.

As for the reason, the same sentence-looking at the global market, Tesla is still in an obvious state of short supply.

Last year, affected by the epidemic, Tesla’s production capacity for export to Europe was very limited. As a result, the sales of Model 3 in Europe did not perform well. At that time, we saw a lot of online analysis about “European users do not like Tesla. However, the reality is indeed every batch of new cars in Europe to Hong Kong Tesla is sold out very quickly, which he did between cars will be delivered to wait for the next batch.

And up to now, in any car market in the world, the market appeal of Tesla Model 3/Y is still not comparable to competing products.

So it is the same conclusion-looking at the global market, the current sales of Tesla depends on the production capacity of the factory.

This may be the reason for the large number of shipments of Model 3 LFP batteries. In Q2, Tesla set a record high bicycle gross profit during the time when the high-end production line was shut down and reformed. It can be predicted that when the production capacity of Model S/X climbs, The next financial report data still has the opportunity to refresh the profit margin record again.

In addition, after the second phase of the Model Y production capacity of the Shanghai plant is increased, the delivery volume will also foreseeably increase.

And don’t forget, Tesla currently holds the long-life rear-drive Model Y, long-life rear-drive Model 3, and long-life 4-wheel drive Model 3. Faced with possible changes on the demand side, Tesla still has Combinations that can be dealt with. The aforementioned Model Y will continue to be on the shelves in China, and the export of high-end Model Y overseas is a typical example.

Regarding this year’s delivery expectations, based on Tesla’s annual growth target of 50%, this year’s delivery volume will reach 750,000 units. Under the premise that more than half of the delivery target in the first half of the year has been achieved, I think it is not difficult to accomplish this goal this year. of. How many units can be delivered beyond expectations is the suspense.

Tesla’s “Tetris”

If you look back at the past few years, you will find that the second quarter of 2021 is actually a relatively flat quarter for Tesla. In this quarter, Tesla did not bring many “new” things to everyone. In contrast, Tesla’s focus this quarter is mainly on the word “implementation.”

The Model S Plaid, which has been delayed for several months, finally started to be delivered, and the pure visual FSD V9.0 which has been delayed for several months is finally pushed, and the FSD subscription system, which has been warmed up for some time, is finally online. In this quarter, Tesla finally filled in several pits that had been promised for a long time.

The reason why everyone is worried about these things is that many of these things are worth looking forward to. When these things are really implemented, no matter as users, fans or even peers, everyone will feel excited and excited.

For Tesla, even if it does skip the vote, because these goals are really important and challenging enough, they will still be recognized and cheered the day they are achieved. Moreover, Tesla did do a lot of incredible things.

This feeling is very similar to the deep groove left for the long stick in playing Tetris, even if you wait for the long stick to appear and pile up other places, but when the long stick finally appears, you accelerate it into the reserved depth After the slot, the feeling of several layers of squares being flattened to the ground is always unsatisfactory.

So when Tesla tells everyone that it will do something, until the time it is actually done, everyone will keep paying attention to it, because everyone knows that Tesla can do it in the end, everyone knows After waiting for a while, Tesla will still bring the long stick to fill the hole.

It is always said on the Internet that Tesla does not understand user operations, but what Tesla is doing is actually a user operation that other companies cannot learn.

So let’s take a look at the pits left by Tesla now: die-cast body Model 3, integrated battery pack, 4680 batteries, FSD China push, FSD China subscription, Cybertruck mass production, Model S/X delivery in China , Supercharge is officially open to third parties. To a certain extent, these are the refreshing points left for the future.

And consumers will continue to scold Tesla for skipping tickets while looking forward to the day when these pits are filled.

Posted by:CoinYuppie,Reprinted with attribution to:
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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