Today's message includes the following news:
- Investment Market News
- Tesla's Differences in the Chinese and American Markets
- Tesla Achieves Record High Deliveries in Q3
Don't miss out on today's important content!
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Tesla's Stock Performance
Let's first talk about Tesla's stock. It opened at \$258.02 on Wednesday and closed at \$249.02, a decrease of \$9, or 3.49%.
As for the three major U.S. stock indexes:
- Nasdaq rose 0.16%
- Dow Jones Industrial Average rose 0.09%
- S&P rose 0.01%
U.S. Electric Vehicle Tax Credit Update
Let's look at data recently released by the U.S. Treasury Department. Since January 1, 2024, the U.S. government has issued a total of \$20 billion in electric vehicle tax credit subsidies. This subsidy covers more than 300,000 vehicles. These tax credits are mainly used for new and used electric vehicles to help boost demand for electric vehicles in the U.S. market.
Specifically, 250,000 new electric vehicles received tax credits, and 50,000 used electric vehicles received subsidies.
The data shows that plug-in hybrid vehicles (PHEVs) have received fewer tax credits. Based on market conditions, currently, only one PHEV model, the Chrysler Pacifica, is eligible for the full \$7,500 tax credit. The number of consumers purchasing this model is relatively small.
Other PHEV models are eligible for a \$3,750 tax credit, but again, the number of consumers purchasing these vehicles and enjoying the credit is not high.
According to market statistics, only about 25% of U.S. electric vehicle buyers use tax credits, even though about 70% of consumers in the U.S. market are eligible.
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Tesla's Differences in the Chinese and American Markets
Let's delve into an analysis by X user James Cat, who provided a deep dive into the differences between Tesla's two major markets, China and the U.S.
There are significant differences in Tesla's sales model and profit structure when comparing the Chinese and American markets. James believes the differences lie mainly in three aspects:
1. Model Preferences and Pricing Differences
First, the Chinese market's demand for the Model Y is concentrated on the rear-wheel drive (RWD) version, which uses the lithium iron phosphate (LFP) battery. This is also the cheapest Model Y option in the Chinese market.
Data shows that over 90% of Model Y sales in China come from the RWD model, which has a starting price of 355,000 yuan in China. This price becomes even more competitive after discounts.
Compared to the Chinese market, American consumers prefer the higher-end all-wheel drive (AWD) or long-range rear-wheel drive (LR RWD) versions. This makes the average selling price (ASP) in the U.S. market significantly higher than in China.
This dynamic creates a profit gap between Tesla's operations in the two regions. As the U.S. market opts for higher-end models, the profit per vehicle is higher. However, the lower selling price in the Chinese market leads to lower profit per vehicle.
Therefore, James believes that although the Chinese market is key to driving sales growth, its profit contribution is not as significant as the U.S. or European markets.
2. Pricing Challenges in the Chinese Market
From a pricing structure perspective, Tesla's prices in China are significantly lower than in the U.S. market. Taking the Model Y Long Range as an example, the starting price in the U.S. is \$47,990, while the price in China, converted to U.S. dollars, is \$41,332. This means that the same car is over \$6,500 cheaper in the Chinese market than in the U.S.
This further compresses Tesla's profit per vehicle in China, especially when considering the federal tax credits available in the U.S. market, which further reduces production costs in the U.S.
According to the latest financial report data, Tesla's average profit per vehicle, excluding government subsidies, is about \$6,300. This means that even with continued sales growth in China, the lower pricing actually has a dilutive effect on overall profit margins.
3. The FSD Factor
In addition to models and pricing, another key difference lies in the sales of Full Self-Driving (FSD).
In the U.S., FSD has a higher penetration rate, and consumers are willing to pay a high price for it. This brings additional revenue to Tesla.
In the Chinese market, almost no one currently purchases the FSD system. This further limits Tesla's profit margin in the Chinese market.
Therefore, although labor costs in China are relatively low and manufacturing efficiency is high, it is not enough to completely offset the differences in pricing and model configuration. There is still a significant gap in the production cost structure between the Chinese and American markets.
In conclusion, while the Chinese market is crucial for Tesla's sales growth, its contribution to profits is far less significant than the U.S. market due to lower selling prices and configuration choices. With changing market demand and the impact of local policies, Tesla needs to strike a balance between different markets to both drive sales growth and ensure that profit margins are not overly compressed.
The above analysis is for your reference only and does not constitute investment advice.
Tesla's Record-Breaking Q3 Deliveries
Tesla's third-quarter deliveries surpassed Wall Street expectations, setting a new all-time high.
According to Tesla's latest data, the company delivered 462,890 vehicles in the third quarter of 2024. This figure slightly exceeded Wall Street's expectation of about 462,000, an increase of 0.19%. This once again demonstrates Tesla's steady delivery growth potential.
Tesla's total production in the third quarter reached 469,796 units.
Specifically, deliveries of Tesla's Model 3 and Y reached 439,975 units in the third quarter, while deliveries of other models, including the Model S and X, reached 22,915 units. The data shows strong market demand for Tesla's mid-to-low-priced models.
It is worth noting that Tesla's average daily delivery in the third quarter exceeded 5,087 units. This figure represents a significant increase compared to previous years and marks significant progress in Tesla's capacity expansion and market demand response.
The image shows a detailed review of Tesla's quarterly deliveries in the third quarter of each year since 2013. These data show that Tesla's deliveries have been climbing significantly over the past decade, reaching a cumulative total of 6,690,810 units. This also means that Tesla will surpass the 7 million delivery milestone in the fourth quarter.
Looking ahead, Tesla plans to deliver 516,000 vehicles in the fourth quarter of 2024 to achieve its full-year target of 1.8 million.
However, for the market, long-term importance is not limited to the growth in the number of deliveries. Investors and consumers are more concerned about whether Tesla's autonomous driving system (FSD) has made significant progress, especially whether the number of interventions per mile has decreased.
The market will focus on the Robotaxi launch event on October 10, which will be a key moment for Musk to showcase Tesla's future development plans to the outside world.
Musk has encountered some challenges in the past few critical moments, so netizens like to call him a "pie-in-the-sky king." Therefore, he needs to use this event to gain more trust and recognition from everyone.
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Tesla Energy Storage Soars in Q3
In addition, as electric vehicle deliveries grow steadily, Tesla's energy storage business is also experiencing strong growth. In the third quarter, a total of 6.9 GWh of energy storage equipment was deployed, representing an astonishing year-on-year growth rate of 73%.
Although Q3 2024 energy storage deployments were down more than 25% from Q2's 9.4 GWh, it was still Tesla's best-ever third quarter.
As of the end of Q3, Tesla's total battery storage deployments in 2024 have reached 20.3 GWh, significantly exceeding the 2023 total of 14.7 GWh. This growth has been driven by the continued expansion of Tesla's Lathrop Megafactory, which has an annual production capacity of 40 GWh, equivalent to 10,000 Megapacks.
In addition, Tesla's new Megafactory in Shanghai is expected to begin production in early 2025, adding another 40 GWh of annual capacity and injecting more momentum into Tesla's global battery storage business.
The significant increase in energy storage deployments in 2024 is mainly due to the widespread adoption of Tesla energy solutions. These systems are being adopted by businesses and public institutions around the world to help balance renewable energy supply and provide stable power reserves.
This is an important turning point for Tesla's business. Strong demand in the energy storage market is becoming an important driver of Tesla's future growth. Moreover, global demand for Tesla Megapacks remains strong.
In Australia, the Western Downs battery project in Queensland will double in size under a \$133 million expansion plan.
In addition, Tesla's battery packs will also power the largest energy storage project in French history.
Tesla's energy division continues to expand. With more capacity coming online, Tesla's performance in the energy storage sector in 2025 is worth looking forward to.
What do you think about today's news? Please feel free to share your thoughts in the comments section.
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