Recently, news about Tesla came out frequently. First, it was reported that Tesla FSD (fully automated driving) would be launched in Chinese Mainland, and then the construction scheme of Shanghai Energy Storage Super Factory was approved. Tesla's progress in intelligence and energy storage was further accelerated.
However, not all the news from Tesla is good either. According to a reporter from the Huaxia Times, Tesla has issued layoff notices for four consecutive weeks, and its sales in China also declined in April. Its stock price did not stabilize at Musk's sharp rise on the day of his visit to China, and subsequently fell.
On May 9th Eastern Time, Tesla's stock price was $171.97, down 1.57%. Under the impact of layoffs and declining sales, Tesla's stock price has fallen by over 34% from its high on December 28, 2023, and its market value has evaporated by over $250 billion.
Energy storage and FSD will be deployed, and the business network will gradually form a closed loop
On May 6th, the official website of the Shanghai Lingang New Area Management Committee showed that Tesla's Shanghai Energy Storage Super Factory's river related construction plan was approved. According to Tesla's plan, the Shanghai Energy Storage Super Factory will start construction in May this year and complete mass production in the first quarter of 2025. The factory is Tesla's first energy storage super factory project outside of the United States.
Debon Securities believes that Tesla's construction of an energy storage plant in Shanghai, China has taken advantage of China's scale manufacturing and rapid response advantages, which can quickly fill the gap in Megapack's production capacity; On the other hand, leveraging the advantages of China's complete and low-cost energy storage system industry chain can reduce Megapack costs. Tesla's energy storage business layout in China is expected to drive the vigorous development of related industry chains. Huaxi Securities also stated that with the completion of the Shanghai Energy Storage Super Factory, domestic energy storage industry chain suppliers are expected to benefit and follow Tesla's layout to achieve global product supply.
In fact, the groundwork for Tesla's energy storage super factory was already laid during Tesla CEO Musk's visit to China on April 28th.
On that day, Tesla posted two articles on its official Weibo about energy storage and autonomous driving. One of them mentioned, "We will continue to deepen our cultivation in China, jointly develop with industries such as artificial intelligence, electric vehicles, and energy storage, and accelerate the implementation of clean energy and autonomous driving technology."
Another point is that Tesla is not just about cars, but about artificial intelligence and robotics, sustainable energy and electric vehicle companies. From lithium refining to lithium batteries, to over 6 million electric vehicles and charging networks, it is just the tip of the iceberg in Tesla's business value network. The fully autonomous driving capability (driver supervision version) and the underlying technology of artificial intelligence computing and humanoid robots are closely connected. The generation, storage, and sales of sustainable energy are forming a closed loop in Tesla's business network of real-time trading and control platforms for solar, storage, and Autobird electricity.
It can be seen that in addition to energy storage, autonomous driving has also become another focus.
After Musk's visit to China, some media reported that Tesla had obtained "provisional approval" to launch FSD functions in Chinese Mainland. Although the timing of FSD's entry into China has not been determined yet, the Tesla APP has changed the official FSD purchase page for Tesla China from "to" soon to be launched ".
In addition, Tesla has also passed China's automotive data security compliance requirements. On the same day as Musk's visit to China, the China Association of Automobile Manufacturers (CAAM) officially released a notice on the testing of four safety requirements for automotive data processing (first batch). Among them, 76 models from six companies, BYD, Ideal, Lotus, Hezhong New Energy (Nezha Automobile), Tesla, and NIO, meet the four compliance requirements for automotive data security.
On May 9th, multiple media reports reported that Musk had recently warmed up three major updates to Tesla's upcoming FSD system on his social media: the V12.4 version is expected to be released next week, and it will almost fully update model training to improve system accuracy and reliability. The V12.5 and V12.6 versions are currently in testing and are expected to be gradually launched in the future.
Liu Hongchen, Chief Analyst of Pacific Securities Research Institute, stated in a research report that Tesla FSD has run over 1 billion miles since its launch, providing sufficient data for Tesla's training models. At the same time, large model training data requires strong computing power, and Tesla's leading supercomputing center and Robotaxi's continuous catalytic landing path are worth looking forward to.
Liu Hongchen also stated that Musk announced that Robotaxi will land on August 8th this year. Recently, Tesla has initiated a global personnel adjustment, and autonomous driving is expected to receive resource tilt. The support of large models will enhance the perception and generalization ability of urban NOA, accelerate the landing of NOA in cities without maps, empower AI, and accelerate Robotaxi. Tesla's cumulative investment in autonomous driving this year is expected to exceed 10 billion US dollars.
Layoffs and downturns, Tesla may welcome back executive Zhu Xiaotong in China
The personnel adjustment mentioned by Musk has recently ushered in a new round of layoffs. According to CCTV Finance, on May 6th local time, an employee received a notice early on the 6th that their team would further lay off employees. In addition, several Tesla employees stated on the professional social media platform LinkedIn that they received layoff notices over the weekend.
On May 10th, it was announced that Rich Otto, the Product Launch Manager at Tesla, resigned last week after nearly seven years in office. He expressed his resentment towards Tesla's layoffs in a public statement: "A great company is made up of great employees and great products, and great products can only be achieved when employees grow strong. The recent layoffs have shaken the company and its morale, causing this harmony to lose balance and making it difficult to see long-term development. It is time to make changes."
It is understood that this is Tesla's fourth consecutive layoff notice.
Musk announced for the first time on April 15th local time that Tesla would lay off more than 10% of its workforce due to the duplication of roles and job functions in certain areas. Before the layoffs, Tesla hired over 140000 employees worldwide, and a 10% layoff means that over 14000 Tesla employees will face unemployment.
Afterwards, news of Tesla's layoffs was gradually exposed. On April 29th local time, Musk sent a memo within the company announcing that Rebecca Tinucci, the head of Tesla's supercharging team, and Daniel Ho, the new product manager, will resign with the entire team. It is reported that the team has approximately 500 employees.
In addition, Drew Baglino, Senior Vice President in charge of engineering and technology development for Tesla's batteries, motors, and energy products, also resigned in April.
It is worth noting that while layoffs and internal adjustments have occurred, Tesla's profits have also declined, and even under price reduction promotions, it has failed to stimulate new demand in the fiercely competitive market to drive delivery growth.
Tesla's first quarter financial report showed that due to its long-term electric vehicle price reduction strategy and some unforeseen challenges, Tesla's first quarter profit was $1.13 billion, a year-on-year decrease of 55%. The operating profit margin also decreased from 11.4% in the first quarter of 2023 to 5.5%.
Official data shows that Tesla's global delivery volume in the first quarter of this year was 387000 vehicles, a year-on-year decrease of 8.5%, and a month on month decrease of 20.2% compared to the fourth quarter of last year. This is the first time in nearly four years that Tesla's quarterly delivery volume has declined year-on-year.
On May 7th, the China Association of Automobile Manufacturers released wholesale sales data for domestic new energy vehicle manufacturers in April, showing that Tesla's wholesale sales in China in April were about 62167 vehicles, a decrease of nearly 18% from 75842 vehicles in the same period last year, and a month on month decline of more than 30%. And this achievement is based on Tesla's price reduction of 14000 yuan for all models after a 20 day price increase.
Perhaps due to the decline in sales in China, Zhu Xiaotong, one of Tesla's top four executives, has been rumored to be transferred back to China. Recently, there have been media reports that Tesla's Senior Vice President of Automotive Business, Zhu Xiaotong, will be transferred back to China from Tesla's Texas headquarters in the United States. Although this news has not been confirmed yet, Zhu Xiaotong accompanied Musk throughout his visit to China.
According to data, Zhu Xiaotong was born in China and later received education in New Zealand and the United States. He joined Tesla Motors in April 2014 and was one of the pioneers in the layout of Tesla's supercharging stations in China and the construction of its Shanghai super factory. In April of last year, he became the Senior Vice President of Tesla's automotive business, becoming one of Tesla's four top executives and entering the core management team.
It is speculated that Zhu Xiaotong's return is likely to enable him to better understand the Chinese market, to fully promote the landing of Tesla FSD full auto drive system in China and the construction of Tesla Shanghai energy storage super factory, to further stabilize and strengthen Tesla's market position.