Shares plummeted 8%! Tesla really can't sell?

Two days earlier, Tesla officially announced first-quarter deliveries of 63, 000 vehicles (a truly clean figure), up 110 per cent from a year earlier but down 31 per cent from the previous quarter. In addition, deliveries of the "walk-through" Model 3 were 50,900 vehicles, below the "lowest estimate" of 51,700 vehicles in the investment market. Tesla's explanation for the plunge in deliveries is that deliveries surged in europe and china, sometimes five times higher than their previous peaks, but delivery was affected not by "demand" factors but by other factors (not explicitly stated). To sum up, Tesla means a lot of demand, just "delayed delivery." Of course, other factors, or slowing demand, may not be clear until Tesla delivers in April. But before this, the investment market seems to Tesla's "official rhetoric" did not buy, Tesla shares plunged 8% on the 4th. It is fair to say that investment markets seem more convinced that Tesla is already facing a "crisis of demand" and more doubtful about the effectiveness of Musk's successive price cuts. So is there a "demand crisis" at Tesla? Will "delayed delivery" trigger a new round of financial crisis for Tesla? Where did Tesla's "demand crisis" come from? In mid-March, many US investment institutions were not bullish on Tesla's demand crisis, and even some US institutions directly stated: "Tesla will encounter'demand hell 'in the first quarter." One of the most important things about Tesla is that it has always been a "stronghold The US market is facing the problem of "subsidised waist-chopping", which has led to doubts about Tesla's sales. After the subsidy cut, Tesla sold 6,500 vehicles in January 2019 and 5,750 vehicles in February 2019 in North America, down more than 70 per cent from 25,250 in December 2018, and the proportion of higher-priced full-drive models delivered continued to decline. This shows that the decline in subsidies for Tesla sales had a huge negative impact on consumer wait-and-see sentiment. North America accounts for 75% of Tesla's sales, and Musk, which has just emerged from a capacity crisis, was caught off guard by a sharp contraction in North American demand. This is the market background for the sudden big price cut for Tesla. Musk and his Tesla desperately need to find new demand outside North America to absorb their rising "capacity". Second, Tesla's overseas market demand has slowed further, European market expansion is difficult, and the crisis in the Chinese market is severe. Europe is currently Tesla's second-largest market, but Tesla's European sales fell sharply in January and February, down 40 per cent from a year earlier and 63 per cent from a month earlier. For Tesla, expanding into Europe is bound to be difficult, in part because of the recent rise of several strong competitors in Europe. At the end of 2018, Jaguar's pure electric SUVI-Pace outsold the Tesla Model S and Model X. In early 2019, Audi officially announced that global orders for its $80,000 high-end electric SUV e-tron had exceeded 20,000 sets. Deep down, these strong competitors from Europe will not only continue to anchor the European base, but will also enter the North American and Chinese markets across the board, putting tremendous competitive pressure on high-end models such as the Tesla Model S, Model X and Premium Model 3. In contrast, Tesla's combined global sales of its premium models, the Model S and Model X, fell by 2 per cent in 2018, suggesting that Tesla is saturated in the high-end electric car market and that its products are less competitive. The situation in the Chinese market is also not optimistic. In January 2019, Tesla sold fewer than 1,000 vehicles in China, of which 18 were Model 3, 251 Model S and 584 Model X. In contrast, Tesla's top disciple in China, the ES8, sold 1,803 of its flagship cars in January, nearly twice as many as the entire Tesla line. Therefore, for Tesla, the "demand crisis" in the Chinese market seems to be more severe, "price reduction and promotion" has become its response to changes in the Chinese market helpless choice. Tesla's crisis has shifted from a "capacity crisis" to a "demand crisis", taking into account recent developments in North America, Europe and China. In the future, Tesla may "again" continue to reduce commodity prices, thereby increasing market share and stabilizing cash flow, after all, reducing costs has become the current stage of Tesla's strategic goal. Delayed delivery could lead to a new round of financial crisis In accordance with special Shipping the Model 3 to Europe and China has been hampered by longer shipping times, which will also lead to a slower withdrawal of funds, according to Ms. Zira. Tesla repaid a $920m bond in March, leaving only $3.7bn in cash at the start of the quarter, compared with $920m in debt, according to a select group. Tesla's next big payout was $566 million in debt due in November, followed by $1.4 billion in bonds due within two years. In addition to these debt repayments, Tesla needs more cash as it prepares to start manufacturing the new Model Y and prepare its Shanghai plant (it has been reported that Tesla has secured $500 million in loans from several Chinese banks). Overall, late delivery does not appear to affect Tesla's cash flow problems, but the company is still under pressure, with quality issues the first to bear the brunt. It can be seen that Musk is now upholding the view that "only fast but not broken", the pursuit of rapid production, squeeze weekly output, quality control and other links to reduce requirements, leading to quality problems. Previously, many car owners had raised various issues with the Model 3 on Weibo. In the short run, this is fine for healthier cash flow, but in the long run, it will hurt Tesla's brand image, and that's something to consider. Tesla delivers according to this quality requirement, and as deliveries increase, its service system should be improved as soon as possible, for reasons that I think everyone understands. Tesla's crisis has shifted from a "capacity crisis" to a "demand crisis", taking into account recent developments in North America, Europe and China. Foreseeable, Tesla will invest more and more strategic resources in China (this price reduction promotion is only the beginning), make full use of China's most efficient and cheap production resources and the world's largest automobile market resources, and rapidly increase Tesla's market share in the Chinese electric vehicle market, in order to solve its current increasingly serious global "demand crisis". Judging from the delivery report, Tesla will not be profitable in the first quarter. So, will Tesla be profitable in the second quarter? Let's see Musk "do it".