On Monday Eastern Time, Tesla's stock price rose more than 6% to close at $209.86, reaching a new high in nearly three months. Its market value surged overnight by $38.2 billion, with a total market value of $669.285 billion.
Some analysts believe that the sharp rise in Tesla's stock price may be related to its new car purchase finance policy launched in China.
On July 1st, according to Tesla's official Weibo account, in July, Tesla will provide consumers with triple benefits when purchasing cars. Firstly, for the Model 3/Y standard range version, Tesla will launch a maximum 5-year zero interest and low interest discount car purchase policy, with a minimum daily supply of 85 yuan; Secondly, a maximum 5-year zero interest and low interest purchase discount policy will be launched for the Model 3/Y Long Range All Wheel Drive Edition, with a minimum daily supply of 107 yuan; Finally, the annual fee rate for limited time and low interest rates in July has dropped to a starting point of 0.5% (equivalent to an annualized interest rate of 0.93%).
Sina Weibo (@ Tesla)
It is understood that in this promotional activity, a down payment of 79900 yuan can be chosen as a 5-year zero interest plan. Specifically, for different models of vehicles, the Model 3 rear wheel drive version has a minimum daily supply of 85 yuan, and the long range all wheel drive version has a minimum daily supply of 107 yuan; The daily supply of the Model Y rear wheel drive version is as low as 95 yuan, while the long-term all wheel drive version is as low as 118 yuan. Compared to the previous standard annual fee rate of 2.5%, Model Y can save up to 26000 yuan in interest.
Tesla's new car purchase finance policy in China may be closely related to the market pressure it is currently facing. Under the fierce price war in the Chinese car market, Tesla's sales in China have also fluctuated.
Public data shows that in the first quarter of 2024, Tesla's retail sales in the Chinese market were approximately 132400 vehicles, accounting for 30.57% of Tesla's global market production, but a year-on-year decrease of 3.64%; According to data from the China Association of Automobile Manufacturers, Tesla's sales in China decreased by 0.5% in the first five months of this year.
The decline in sales has also had a significant impact on Tesla's performance. According to official information, Tesla's total revenue in the first quarter was $21.301 billion, a year-on-year decrease of 9%; The net profit was 1.144 billion US dollars, a significant decrease from 2.539 billion US dollars in the same period last year; The net profit attributable to common shareholders was 1.129 billion US dollars, a significant decrease of 55% year-on-year; The operating profit margin also decreased from 11.4% in the same period last year to 5.5%.
Or to alleviate operational pressure, it has been reported that due to poor energy density and charging performance, as well as high costs, if cost reduction cannot achieve the expected results by the end of the year, Tesla will consider stopping production of 4680 batteries at its GigaTexas factory in Texas and instead purchasing from external suppliers.
In response to this, a reporter from the Daily Economic News asked Tesla China for confirmation, and the other party replied, "Tesla has already mentioned at its June shareholder meeting that the production of 4680 batteries is proceeding smoothly."
In fact, as early as the beginning of this year, Tesla participated in the price war competition. In January of this year, both Tesla Model 3 and Model Y models were priced lower. Among them, the updated Model 3 has reduced prices across the entire range, with the rear wheel drive version dropping to 245900 yuan and the long range version dropping to 285900 yuan; The Model Y rear wheel drive version has been reduced to 258900 yuan, and the long range version has been reduced to 299900 yuan.
Subsequently, on April 21st, the Tesla Model 3/Y/S/X series was reduced in price by 14000 yuan, with the updated Model 3 priced at 231900 yuan, a decrease of 5.7%; The price of the Model 3 Long Range Renewal has dropped to 271900 yuan, a decrease of 4.9%; On April 24th, Tesla's official Weibo account once again announced the launch of a "0 down payment" or "limited time 0 interest" promotion, applicable to the Model 3 and Model Y.
Some believe that Tesla's "5-year zero interest" promotion, rather than a direct price reduction, may be a signal of a cooling off in the car market's "price war". According to data from the China Association of Automobile Manufacturers, only 10 car models underwent price reductions in May this year, with a smaller scale compared to the same period in 2023. As a comparison, in February of this year, 29 models were reduced in price, 49 models were reduced in March, and the number of reduced models in April reached as high as 54.
Cui Dongshu, Secretary General of the National Passenger Car Market Information Joint Conference, believes that the number of discounted models in May has dropped to a lower level of 10, reflecting the temporary end of the "price reduction trend". With a significant reduction in the number of discounted models in May, the market is gradually returning to a normalized competitive situation of promotional increments.
After multiple rounds of price reduction and promotional measures, Tesla's sales have gradually rebounded. On the evening of July 2nd, the latest sales data released by the China Association of Automobile Manufacturers showed that in June this year, Shanghai's super factory delivered over 71000 vehicles, and Tesla's domestic sales exceeded 59000 vehicles, an increase of 7% from the previous month. In the second quarter of this year, Tesla's domestic sales increased by 10.2% month on month.
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