Judging from the speed of technological innovation in the past decade, the mobile Internet has swept everything and transformed the world, and the appearance of the automotive industry can be said to be rock solid and unchanged over the years. The only bright spot came from Tesla. A car company, suddenly famous all over the world, throughout the past decades of automotive history, there is no second such example.
"Iron Man" Elon Musk wrote down Tesla's three-step development strategy ten years ago: first, to produce high-end electric vehicles with a small number and high price; Electric vehicles; 3. Mass production of electric vehicles at prices that the public can afford.
Musk has completed the first two steps through 13 years of persistence, launching the luxury supercar Roadster, as well as the Model S and Model X. The third step is to launch the Model 3, a Volkswagen electric car, which is currently being implemented. Once the Model 3 is successfully mass-produced and delivered, it will increase the market share of electric vehicles by an order of magnitude, and the automotive industry pattern may be reshuffled.
Tesla was established in July 2003 and listed on the Nasdaq in June 2010. The closing price on the day of listing was $19, and the stock price has been between $190-220 in the past two months. In the six-and-a-half years of a losing streak in its listing, Tesla's stock price has nearly tripled. What kind of story did Musk tell that made the capital market so sought after?
AiAnalysis will analyze Tesla's growth history, business model, operational efficiency, performance and other perspectives, trying to clearly present the company's development trajectory for the domestic emerging Internet and new energy vehicle companies as a reference.
Frugal first car cost only $400 million
Tesla development history map
The automotive industry is capital-intensive. So far, Tesla has raised a total of US$6.16 billion from equity financing and debt financing, of which 5.2 billion has been raised after the IPO.
Musk, an entrepreneurial star in Silicon Valley, insisted on endorsing the company with his own capital investment in the early days, and raised funds through various channels (government, human resources), which is an important reason for the company to avoid multiple bankruptcy crises.
Tesla didn't spend a lot of money in the early days of building cars.
From its establishment in July 2003 to the delivery of its first car, the Roadster, in the fourth quarter of 2008, I infer that Tesla spent a total of $300-400 million. Among them, 2006-2008 three years of sales, research and development and administrative expenses and other operating expenses totaled 210 million US dollars.
Tesla's first production vehicle, the Roadster
Unlike domestic Internet car companies that invest billions and tens of billions in car building, Tesla's early car building appears to be "intensive". The reason is that Tesla did not choose to build its own factory in the early days, but was OEMed by Lotus, and it had only 150 people until 2006, which was a small scale.
In contrast, Li Bin, the founder of NIO, publicly stated that it will cost at least 20 billion before the first mass-produced car rolls off the assembly line. Among them, the OEM cooperation with Jianghuai Automobile plans to invest 10 billion yuan. In addition, NIO has four R&D centers in Shanghai, San Jose, Munich, and London, with more than 2,000 employees.
With the launch of many products and the rapid growth of sales performance, the capital market began to recognize and pursueIn the past three years, Tesla’s financing ability has also been greatly enhanced, and the amount of financing is also significantly higher than the start-up stage.
Another argument for its strong financing ability is its poor hematopoietic ability: since its listing in June 2010, Tesla has only recorded quarterly profits in the second quarter of 2013 and the third quarter of 2016.
The first luxury electric supercar, the Roadster, was delivered in 2008 and was discontinued in 2012. The fundamental reason was that the product lost money and the cost was higher than the selling price. The Roadster, which was planned to be priced at $100,000, cost $120,000. Dollar. Musk's attempt to raise the price was met with backlash from pre-order owners.
Establish a high-end brand image and play from top to bottom
Since its establishment, Tesla has positioned itself as a high-end brand with its own luxury attributes. In addition to the product being a performance monster, Tesla is also pursuing "luxury" attributes comparable to supercars in appearance, interior and industrial design. Tesla experience stores, service centers, charging piles, etc. are all designed with a consistent aesthetic taste, similar to Apple (the establishment of Tesla's retail system is also chaired by Apple's vice president of retail).
Tesla Model S
Among the employees disclosed in the listing announcement in 2010, the proportion of employees in the automotive design department reached 20%. Such a large human investment was a core department for Tesla, which was in its infancy at the time, which shows that Tesla Emphasis on car design.
Tesla's first car, the Roadster, was a D-segment luxury supercar. The second model, the Model S, is not very large in the current market, but it has demonstrative significance. In the full-size luxury sedan market, the Model S has won a place in the competition with the BMW 7 Series and Mercedes-Benz S. Tesla's brand path is unique in being able to establish a high-end image in such a short period of time.
Putting aside brand strategy, another big reason why Tesla needs to position itself in luxury, high-end products is the high cost. Although Tesla has technological innovations in many areas of electric vehicles, the cost is still too high compared to traditional fuel vehicles. And under the conditions of small production scale and small cost allocation base, the cost of a single vehicle is high, and only through the positioning of high-end vehicles can profits be guaranteed. Therefore, the Roadster priced at more than $100,000 and the Model S priced between $60,000 and $100,000 are competing with traditional luxury cars and are a last resort.
Table: Comparison of Tesla's products with competitors at the same price
Source: Public Information
In the automotive industry, a strong brand is the greatest guarantee for continued sales and profitability. Because consumers are too attached to the brand. Automotive products are so complex that consumers rely largely on the brand's reputation to make purchasing decisions.
Tesla can establish a high-end brand image, not only because of the product itself, but also because of the celebrity effect. Among the earliest Tesla owners, there are Google founders, Brad Pitt, Paris Hilton and other stars and Silicon Valley bigwigs, all of which have added a lot of halo to Tesla.
Crazy R&D spending
Tesla's emergence, in addition to Musk's vision that human society must move towards sustainable energy, the biggest opportunity comes from technological changes and breakthroughs. Batteries, motors and electronic controls are considered to be the three core technologies of electric vehicles, of which batteries are the most critical.
Tesla's battery supply is sourced from Panasonic. The breakthrough in battery technology has enabled Tesla to achieve a mileage of 350 kilometers on a single charge on its first car, the Roadster. Solving the problem of battery life is a prerequisite for the commercialization of electric vehicles.
Tesla is powered by a battery pack consisting of thousands of cells, which will not catch fire even if it is short-circuited, and damage to individual cells will not affect other parts. This battery control system is Tesla's core technology patent, and there has been no failure so far.
Tesla owns intellectual property rights in many core components such as battery packs, power electronics modules, high-efficiency motors and software control systems. By the end of 2012, Tesla had 117 patents, which had grown to 203 by the end of 2013. The rapid growth in the number of intellectual property rights stems from the continued heavy investment in R&D. Tesla's quarterly R&D investment increased from $1.94 million in the second quarter of 2009 to $213 million in the third quarter of 2016.
The results of R&D investment reflected in the product are accelerated by 100 kilometersEnhancement, cruising range improvement, continuous improvement of automatic driving performance, and continuous introduction and improvement of functions such as dual-motor all-wheel drive.
Tesla Model X
From foundry to self-built factory, capacity expansion
Initially, Tesla chose Lotus as its foundry. In October 2010, Tesla purchased a factory from NUMMI (New United Motor Manufacturing Inc.). By the end of 2015, Tesla had production sites in Fremont, CA, Lathrop, CA, Nevada and Tilburg Netherland.
Among them, the Gigafactory in Nevada started construction in June 2014 and has been producing Tesla's energy products (such as Powerwall, Powerpack, etc.) since the fourth quarter of 2015. In the first quarter of 2016, it began to cooperate with Panasonic to produce batteries, and in the second quarter, it will start producing batteries for Model 3. The Gigafactory is expected to be fully operational by 2024, with an annual production capacity of 500,000 vehicles. The entire factory will cost $4 billion to $5 billion, of which $2 billion will come from Tesla’s own funds.
Tesla has also struck a deal with battery supplier Panasonic, which will invest in the Gigafactory and produce larger-scale batteries for Tesla when it is built.
The factories of emerging domestic OEMs have also officially broken ground, with a production capacity of 200,000-400,000 vehicles. It is expected that a factory will be put into mass production vehicle production in the second half of 2017, and the construction speed is no less than that of Tesla.
Situation of new domestic OEM factories
In addition to building its own factory, Tesla has also increased production more quickly by reducing customization. Tesla's personalization is a huge advantage, and it also restricts the ramp-up of production capacity. In response to this, Tesla has launched more models (for example, Model S has 60, 60D, 75, 75D, 90D, P100D and other models with different configurations) to cover mainstream market demand and reduce customization requirements.
At the beginning of 2012, Tesla's production capacity was 5 vehicles per week. After the Model S was launched in 2012, the production capacity began to climb, and it reached 400 vehicles per week by the end of the year. The Model X and Model S launched in 2015 share a platform, and with the gradual increase of factories, Tesla has reached a weekly output of 2,000 vehicles in the second quarter of 2016.
As production capacity expands, the time to market for new Tesla models is dramatically shortened.
It takes an average of 7-8 years for a traditional oil car to go from demand research, design and development to production and listing. Electric vehicles have fewer parts and a simpler supply chain (the number of parts provided by Tesla's suppliers is around 3,000, while the number of parts provided by traditional car companies is tens of thousands), so Tesla The time to market for new cars is also shorter.
It took five years from Tesla's founding to the delivery of its first car, the Roadster. The second model Model S took 4 years from announcement to delivery, and the third Model X took 3 years and 7 months from announcement to delivery, and the time to market was gradually shortened. The next Model 3, currently under development, was first revealed in the second quarter of 2014, and the prototype was released in March 2016. If it is delivered as planned by the end of 2017, it will take about three and a half years.
Constructing its own sales system, there is huge room for imagination in the automotive aftermarket
The biggest difference between Tesla and traditional manufacturers is its direct sales model. Traditional car companies are positioned as OEMs, and sales will be handed over to channel dealers. Tesla chose to build its own sales and service system.
Tesla's offline brick-and-mortar stores are positioned for experience and service, as well as expanding customer contact and building brand recognition, and do not assume sales targets. The survey found that building a Tesla brick-and-mortar store within 50 square kilometers can effectively drive sales and customer awareness of the brand.
Potential buyers enter the store to experience the test drive, and the order is still online. The physical store has no sales target pressure, and there is no need to sell to customers, which greatly improves the consumer experience. In addition, the physical store is a service point for placing orders, picking up vehicles after production is completed, and repairing and maintaining them. Deadline 20In the third quarter of 2016, Tesla had 218 brick-and-mortar offline stores in North America, Europe and Asia.
The construction cost of offline self-operated stores is high, and Tesla's current service revenue ratio is still very low. However, from the point of view of the profitability of the whole life cycle of the car, there is huge room for imagination in the follow-up market. The profit of a car's entire life cycle is roughly "28%", that is, the profit of car sales accounts for 20%, and the profit of the aftermarket such as repair, maintenance, auto insurance, and auto finance accounts for 80%. Tesla, which chose to run its own business, cut off the 4S store as a middleman. In the future, it will cut into the aftermarket of the car, and most of the profits will flow into Tesla's pocket.
Tesla China Service Store
Another focus of Tesla's construction is charging piles. Although breakthroughs in battery technology have partially solved the problem of battery life, charging convenience is still an important factor affecting whether consumers choose to buy electric vehicles.
Instead of waiting for the government to build public infrastructure such as charging piles, Tesla chose to invest heavily and build it on its own. Since the release of super charging piles in September 2012, to the third quarter of 2016, Tesla has built a total of 715 charging stations and 4,461 super charging piles in four years.
The cost of building charging piles is huge. According to the annual report, the book value of charging piles as of the end of 2015 was US$340 million. Initially, in order to stimulate sales, Tesla promised that the charging pile would be free for life. In 2016, Tesla announced that charging piles will start charging new vehicles from January 1, 2017. The reasons for the charges are that one is to raise funds for the launch of the Model 3, and the other is that the benefits of free use of charging piles lead to ineffective allocation and waste of resources, which need to be adjusted by price leverage.
Offline asset-heavy operations lead to a very high proportion of Tesla's sales and management expenses. Although showing a downward trend, it is still higher than that of traditional automakers. For the past four quarters (Q4 2015 to Q3 2016), GM's SG&A ratio was 7%, Ford's 8%, Ferrari's 11%, and Tesla's 23%. two to three times.
Product sales continue to rise, and gross profit margins gradually increase
Driven by many factors such as leading technology and high-end brand, Tesla's sales continued to rise. The company's single-quarter vehicle sales increased from 250 in the third quarter of 2012 to nearly 25,000 in the third quarter of 2016, and sales have maintained an annualized growth rate of 164% in the past five years.
Table: Tesla's sales by product over the years
Data source: Tesla annual and quarterly reports
To expand sales, Tesla has also introduced a rental sales model. That is, customers can buy a Tesla car with a lease, and within a period of 36-39 months, the car can be returned to Tesla at the price agreed at the time of purchase. The lease sales model, while increasing Tesla's inventory risk, expands Tesla's sales.
Electric vehicles are still a new thing. When consumers are hesitant to face new things, sales with leases allow customers to experience electric vehicles first, develop habits, and increase their favorability. As of the third quarter of 2016, Tesla had leased and sold 22,960 vehicles directly and through leasing partners.
With the rapid increase in sales, Tesla's per capita production capacity is also rapidly increasing. Before 2013, Tesla's per capita production capacity was $140,000, and in 2014 and 2015 it reached more than $300,000, doubling.
Table: Tesla's per capita sales revenue over the years (unit: ten thousand US dollars)
Data source: Tesla Annual Report
While sales revenue has grown significantly, Tesla's gross profit margin has also increased steadily. It is divided into three stages:
In the first stage (from the second quarter of 2009 to the first quarter of 2012), the sales model was Roadster, and the quarterly average gross profit margin was 18.4%;
The second phase (from the second quarter of 2012 to the second quarter of 2015), the sales product is Model S, and the quarterly average gross profit margin is 19.3%;
In the third stage (from the third quarter of 2015 to the third quarter of 2016), the sales products are both Model S and Model X, and the gross profit margin is 24.5%.
hairThere are three main reasons for the increase in interest rates: first, the substantial increase in sales, the dilution of costs, and the gradual emergence of economies of scale; second, the advancement of technology has reduced the cost of batteries and accessories; third, the Model X and Model S share a platform, and a single vehicle Gross profit margin is increasing. In the third stage, after Model X joins the sales ranks, the increase in gross profit margin is the proof.
Inefficient inventory turns
Compared with traditional automakers, Tesla's new model accounts receivable turnover is faster, but inventory turnover is slower.
Due to Tesla's intervention from the source of the production chain, the inventory carry-over is not completed until the car is delivered to the customer, which results in a high proportion of the company's inventory to total assets and a slow inventory turnover.
Tesla's inventory ratio is 14%, GM and Ferrari 7%, and Ford's 4%. In terms of inventory turnover days, Tesla is also several times that of other car companies. Although the inventory ratio is higher and the turnover efficiency is lower, the risk of Tesla's inventory backlog is basically controllable, because the model of placing an order first and then picking up the car guides supply according to demand, and the risk of inventory backlog is extremely low.
Tesla, like Dell Computer, has achieved order production. Li Bin, founder of NIO, commented that when the market situation is down, traditional car companies have a backlog of inventories, and they are bent on expanding sales and reducing inventories. The service and experience of the company are out of reach, and they cannot be taken care of; while Tesla, which has realized the production-to-order and direct sales model, can focus on the user experience without the pressure of inventory.
Table: Comparison of Tesla's operating asset efficiency with traditional car companies (the range of turnover days is the range of data from 2012 to 2015); data source: annual reports of each company
Tesla has positioned its self-operated direct sales model, which is very different from traditional car companies, in several roles: 1. Drive sales opportunities by expanding customer contact and test drives; 2. Managing the company's high-end brand and excellent reputation; 3. , which can improve the service experience of consumers; 4. Incorporate consumers into the product development process, that is, consumers' feedback and needs can be responded more quickly.
In addition to these advantages, another major advantage of Tesla's online sales model is the improvement in the efficiency of payment collection. Tesla requires customers to pay a deposit when booking and selecting the car configuration, and pay the remaining full amount when picking up the car. Compared with the traditional model of car companies selling through channels, the turnover days of accounts receivable are greatly shortened.
Autonomous driving is the goal
Tesla added the Autopilot feature to the Model S in October 2014, while other manufacturers' Autopilot was still being tested in the lab or on the field.
In 2016, Tesla was in a storm of public opinion because of its autopilot accident. In Germany, it also renamed autopilot to intelligent assisted driving due to government pressure. However, Musk believes that the driver is the ultimate person in charge of vehicle control. Tesla can help drivers better cope with complex road conditions through radar, cameras, ultrasonic sensors, high-precision CNC auxiliary braking systems, GPS, and on-board processors. Reliable, dependable features. Tesla's Autopilot is the same flight system as an airplane, and the pilot doesn't need to operate it when the weather permits.
Tesla 17 inch screen
Amid the skepticism and praise, Tesla has been exceptionally firm on the road to autonomous driving. Through OTA upgrades, Tesla has continued to add intelligent functions to its products, successively implementing navigation services, voice navigation, cruise control, collision avoidance assistance, enhanced backup assistance, vehicle speed assistance, intelligent temperature presets, automatic emergency braking, and blind spot alerts. , Valet Mode, and 3D Navigation updates.
In October 2016, Tesla released the Auto Pilot 2.0 system, and Musk said that it has found a technical direction for the evolution of fully autonomous vehicles. In Musk's long-term plan, the car will be fully autonomous, freeing people's hands from the steering wheel, which can greatly improve people's travel efficiency. What follows is that car sharing drives the increase in car utilization and the decline in car ownership, thereby saving energy.
While Google and many other companies are still researching, testing and choosing directions, Tesla has collected driving data from tens of thousands of sold cars and continuously updated and upgraded its software system. As of October 2016, Google announced that its self-driving cars had completed 3.22 million kilometers of driving, and Musk announced on Twitter that the cumulative driving distance of Tesla Autopilot had reached 3.5700 million kilometers. Tesla is undoubtedly the one that has gone the furthest in autonomous driving.
Highly growing Tesla, valued at nearly $40 billion
Regarding valuation, Tesla is currently in a period of rapid growth, while multinational auto companies are mostly in a mature and stable period. Ai Analysis chose Hong Kong stock Geely Auto and A stock Great Wall Motor as a comparison.
From 2010 to 2015, the compound growth rate of revenue of Great Wall Motors was 27%, the gross profit margin was stable at 25%, and the P/S value was in the range of 1.5-2.1; The gross profit margin is stable at around 19%, and the P/S value is also between 1.5-2.1.
We give Tesla P/S 2.5x for the following reasons:
(1) Tesla's revenue compound growth rate in the past three years is 42%, higher than that of Great Wall and Geely;
(2) The number of Model 3 reservations has exceeded 400,000, ensuring that the company's revenue will continue to grow rapidly in the next few years;
(3) The company's gross profit margin was 27% in the third quarter of 2016, and plans to increase it to 30% in the future, higher than Geely and Great Wall;
(4) Autopilot has become the competitive direction of major auto companies, and Tesla has accumulated the most driving data in the field of autopilot;
In the first three quarters of 2016, Tesla completed sales of $4.7 billion, delivered 22,200 vehicles in the fourth quarter, and expects annual revenue to be around $6.7 billion. Assuming that the growth rate of 30%-45% is maintained (the high growth rate comes from the launch of Model 3), the revenue in 2018 will be between 11 billion and 14 billion US dollars. According to the P/S value of 2.5 times, then Tesla Motors Some valuations are in the $28-35 billion range.
In addition, the newly acquired Solar City will also contribute to a $3 billion valuation. Combining the two parts of automobiles and energy, Tesla is valued at between $31 billion and $38 billion. The company's current market value of $37 billion is within a reasonable valuation range.
Building an energy company covering all scenarios of public life
The competition in the electric vehicle market has become increasingly fierce. Traditional car companies have begun to develop and launch electric vehicles, such as the Nissan Leaf, and more emerging car companies have entered into electric vehicles, such as LeEco and NIO. Tesla is open and welcoming to increased competition.
Tesla began to provide other automakers with services such as batteries and power units before going public in 2010; in June 2014, Musk announced that Tesla could open up its intellectual property for others to use, a move intended to attract And inspire more talented people to continue to innovate on the basis of Tesla, and can also better cultivate the market and industrial ecology.
Tesla's goal in the short term is to focus on completing the development, production and launch of the Model 3, which is the last step in Musk's three-step strategy. The successful mass production and listing of the Model 3 will bring Tesla's revenue, stock price and financial performance to a higher level.
Musk believes that the car will become a "consumer electronic product," which means electrifying the power and making the experience smart. Tesla's current online ordering, OTA online upgrade system programs, and Auto Pilot have already achieved part of the experience intelligence.
In visionary Musk's blueprint, Tesla is more than just a car company.
In November 2016, Tesla and Solar City merged, Solar City is a solar service provider, and the merged Tesla positioned itself as an integrated sustainable energy company providing sustainable energy production, storage and The products and services of transportation can cover all life scenarios such as households, enterprises and governments.
From the automotive industry to the broader energy industry, Tesla's journey is a sea of stars.