Tesla Begins Taking Orders On Its Cheaper China-Built Model 3s (#GotBitcoin?)
Prices for the locally built cars are significantly lower than what a Chinese buyer pays for a Tesla imported from the U.S. Tesla Begins Taking Orders On Its Cheaper China-Built Model 3s (#GotBitcoin?)
Tesla Inc. promised to start delivering Model 3 sedans built at its new Shanghai plant within six to 10 months—and priced them well below the imported version—as the electric-vehicle maker races to capitalize on booming Chinese demand.
Offering up details on its China strategy, Tesla said prices for the locally built Model 3 will start from about $47,500 for the Standard Range Plus version. Chinese buyers currently pay $58,900 for a basic Model 3 imported from the U.S.
Initial orders are being taken for the local Model 3 with the first Shanghai-built cars scheduled for delivery late this year or early next year, the company said in a post on its social media account.
Getting China right, industry analysts said, is pivotal for Tesla, whose share price has halved in the past six months amid doubts about its ability to ramp up deliveries in the U.S.
“Tesla has struggled with the Model 3 launch,” said Bill Russo, founder of Shanghai-based consulting firm Automobility. “A repeat of this in China would put their timing at risk and place further stress on their cash flow.”
Tesla broke ground on its Shanghai factory in January. The buildings’ exteriors appear to be nearing completion, judging by recent images posted on Twitter by local Tesla enthusiasts who have been monitoring activity at the site.
At a launch ceremony at the start of the year, Tesla Chief Executive Elon Musk said the plant could start production this year and hit stride in 2020. Friday’s announced delivery dates for the Model 3 suggests the company is on track to meet that timetable.
Sticking to that schedule would enable Tesla to tap into subsidies for electric vehicles before the government cancels them by the end of next year. Under the existing program, a Model 3 manufactured in China would qualify for a subsidy of about $3,600, potentially allowing Tesla to lower its sticker prices.
While the overall Chinese auto industry is experiencing a slump, with annual sales falling last year for the first time since 1990, sales of electric vehicles are surging. The growth includes the premium segment in which Tesla operates.
Tesla already enjoys significant brand cachet in China, and the robust demand for electric vehicles gives the company at good chance of transforming itself from the niche player it is today.
“Tesla is coming into a good segment with a brand that is rooted as a leader in the EV sector,” said Mr. Russo, who said the Silicon Valley company was right to commit fully to China.
In gearing up for local production, Tesla has started a full-throttled recruitment drive. Organizers said an event in eastern Shanghai close to the new factory drew 4,000 applicants on Wednesday. One applicant, who had worked on an assembly line for General Motors Co., voiced confidence in Tesla’s prospects. “I hope to retire at Tesla,” said 28-year-old Zhang Cong.
Tesla ultimately plans to build 500,000 vehicles a year at the Shanghai facility—a massive step-up from the 16,360 imported vehicles it sold in China last year, according to auto-intelligence firm LMC Automotive.
Trade tensions between Washington and Beijing have come into play as Tesla pursues its China plans. Beijing dropped a longstanding requirement that foreign car makers form joint ventures with Chinese partners, a policy that had been criticized by the U.S. But Beijing also raised tariffs on imported cars from the U.S. in retaliation for levies imposed on Chinese goods by Washington.
The new ownership rules and the higher tariffs gave Tesla reason to accelerate plans for a China factory. But in the meantime the tariffs caused it trouble. After raising prices to reflect the new duties, Tesla then slashed prices, drawing a backlash from recent buyers who weren’t offered refunds.
Operating alone means Tesla can retain all the profits from its local operation, rather than sharing them with a joint-venture partner, though it must also shoulder all the political and financial risks associated with the project.
Tesla Cuts Prices On Cheapest Model 3 And Y SUV In The U.S.
Tesla Inc. trimmed prices for its cheapest Model 3 and Model Y while raising prices for the Performance versions, according to the electric carmaker’s website.
The Model 3 Standard Range Plus is now 2.6% cheaper at $36,990 in the U.S. The price of the Model Y Standard Range was cut by 4.8% to $39,990.
Tesla Chief Executive Officer Elon Musk has regularly lamented that Tesla’s cars are too expensive, and the company has a long history of enacting price cuts and incentives to drive deliveries during critical quarters. At the “Battery Day” event last fall, Musk said the company was working on a $25,000 car.
The Performance variant of the Model 3 rose 1.8% to $55,990, while the price of the Performance variant of the Model Y increased 1.7% to $60,990, the website shows. Tesla also lowered prices in Japan.
“Adjustments may reflect mix strategy,” analyst Dan Levy of Credit Suisse said in a note to clients. “We believe Tesla strategy is to cut price (funded by cost cuts) to spur volume increase.”
The shares were down 1.4% to $786.43 at 1:29 p.m. on Thursday in New York. Through Wednesday, they had gained 13% this year, while the S&P 500 rose 4.7%.
Tesla delivered nearly half a million vehicles in 2020 but has warned that deliveries in 2021 will be weighted toward the second half of the year.
The new prices are before any state incentives or gas savings. Tesla also advertises lower prices for its cars on its website that take into account for what it sees as “potential savings” of EV ownership. Those include both state and federal incentives or tax savings that discount the purchase price, as well as the hypothetical lower cost of operating an electric vehicle versus a combustion engine car.
Tesla China Demand Fuels ‘Home Run’ Quarter For Deliveries
Tesla Inc.’s estimate-smashing deliveries of electric vehicles in the first quarter suggest boss Elon Musk’s bet on growth in China and Europe is starting to pay off.
The results marked a strong start to a year in which Musk, the company’s chief executive officer, is counting on global operations to help scale-up production and sales.
The shares jumped after Palo Alto, California-based Tesla said it delivered 184,800 cars worldwide in the year’s first three months. The figures trounced the 169,850 average estimate in a Bloomberg survey of analysts and beat the fourth-quarter figure by about 4,000 vehicles.
The quarter was “a massive home run in the eyes of the bulls,” Dan Ives at Wedbush wrote in a research note Friday. On Sunday, he upgraded Tesla to outperform from neutral, and raised his 12-month price target for the stock to $1,000, from $950. Tesla’s shares could hit $1,300 in a long-term bull case scenario, he said.
“The 1Q delivery numbers released on Friday was a paradigm changer and shows that the pent-up demand globally for Tesla’s Model 3/Y is hitting its next stage of growth as part of a global green tidal wave underway,” Ives said in the April 4 note. “We now believe Tesla could exceed 850k deliveries for the year with 900k a stretch goal, despite the chip shortage and various supply chain issues lingering across the auto sector.”
Tesla was up 7.3% to $709.85 Monday in early U.S. trading. The shares closed at $661.75 on Thursday in New York, ahead of the Good Friday market holiday.
Musk is pushing into China — already the world’s largest automotive market, including for EVs — to gain a foothold amid competition from local electric-vehicle startups as well as Volkswagen AG. Auto sales are forecast to rise in the nation this year for the first time since 2017, and in March, Premier Li Keqiang told the National People’s Congress the government will help boost the number of EV charging stations and battery-swapping facilities.
Tesla’s volume stands apart from most other automakers, who are mainly showing declines in part because of electronic-chip constraints, analysts at Jefferies said in a research note. “Shares should respond well to the Q1 delivery data.”
After a remarkable run in 2020 that saw its stock price surge by more than 700%, Tesla’s shares fell roughly 6% this year through April 1.
“While the EV sector and Tesla shares have been under significant pressure so far this year, we believe the tide is turning on the Street and the eye popping delivery numbers coming out of China cannot be ignored,” Ives said.
Tesla recently refreshed the Model S sedan and the X, an SUV. No Model S and X vehicles were made in the quarter, and only 2,000 were delivered in total.
“We are encouraged by the strong reception of the Model Y in China and are quickly progressing to full production capacity,” Tesla said in a statement. The new Model S and Model X have also been “exceptionally well-received,” the company said, adding that it’s in the early stages of ramping production.
Cowen & Co. raised its Model Y forecasts for this year off the back of the robust numbers.
“Receptivity to the Model Y in China was always a gray area in our minds, since there was never disclosure on deposit/interest levels from Tesla,” analysts led by Jeffrey Osborne wrote in an April 4 report. “Given the upside in 1Q21 coupled with the positive tone in the release, we are raising our Model Y forecasts for 2021 and would expect the Street to do so as well.”
Osborne added that production at 180,338 for the quarter was pleasing, “suggesting that the lingering semiconductor shortage plaguing other auto OEMs is not affecting Tesla in a big way despite the two shutdowns at Fremont in February.”
Tesla currently makes the Model S and X only at its factory in Fremont, California, and the smaller Model 3 and Y both there and at its plant in Shanghai. It plans to build two more factories this year, one in Texas and another near Berlin. The company doesn’t break out sales by geography, but the U.S. and China are its largest markets and nearly all the sales were of the Model 3 and Y.
With production at the Fremont factory temporarily shutting in February over parts supply issues, Tesla’s higher-margin Shanghai plant will account for a bigger share of volume in the quarter, which should support profitability, Jefferies said in the note.
Chief Financial Officer Zachary Kirkhorn warned in January that production would be low due to the transition to the revamped products, while the global semiconductor shortage and delays at ports were also expected to weigh on the quarter.
Tesla said its delivery count should be viewed as slightly conservative and final numbers could vary by as much as 0.5% or more.
The quarterly delivery figure is widely seen as a barometer of demand for both Tesla’s vehicles and consumer interest in electric vehicles worldwide as legacy automakers roll out electric cars of their own.
Tesla Model 3 Loses Coveted ‘Top Pick’ Consumer Reports Rank
Tesla Inc.’s Model 3 sedan was stripped of its Top Pick status by Consumer Reports, which cited the temporary loss of automatic emergency braking and other safety features.
The influential magazine said Thursday it removed the designation after Tesla ditched radar as a supplement to its camera-based sensors, a move that temporarily suspended several advanced safety systems.
“If a driver thinks their vehicle has a safety feature and it doesn’t, that fundamentally changes the safety profile of the vehicle,” David Friedman, vice president of advocacy for Consumer Reports, said in a statement.
The magazine said its scoring of the Model 3 dropped by three points to 75 — but it was still enough to retain its “recommended” status. Consumer Reports said Tesla didn’t respond to its request for comment.
The move comes as the U.S. National Highway Traffic Safety Administration stopped labeling certain Model 3 and Model Y sport-utility vehicles produced on or after April 27 as being equipped with features such as automated emergency brakes, forward collision warnings and lane departure warning systems.
Tesla this week said its Model 3 and Model Y vehicles built for North America will no longer be outfitted with radar starting this month. Instead, its autopilot driver-assistance will rely mostly on camera vision, resulting in the disabling of some safety features during an unspecified transition period.
Electrek and TechCrunch both reported Thursday that Tesla has begun enabling the in-car monitoring system, telling customers in a software update that the cabin camera above the rearview mirror can detect and alert driver inattentiveness while Autopilot is engaged.
Tesla’s mainstay Model 3 earned its first Top Pick ranking from Consumer Reports last year, a designation the nonprofit bestows to only 10 cars, SUVs and trucks per year.
Tesla Unveils Supercharging Route Along China’s Famed Silk Road
Tesla Inc. has unveiled what it claims is the longest supercharging route in China, a 5,000 kilometer (3,100 mile) stretch spanning the vast nation from east to west that’s studded with 27 electric-car charging stations along the way.
A promotional video about the route, which also pays homage to China’s majestic landscape, was retweeted by CEO Elon Musk.
— Tesla Greater China (@teslacn) June 19, 2021
Charging facilities are vital to the promotion of electric cars, with range anxiety one of the main reasons why people don’t want to make the switch away from gasoline vehicles.
The route covers nine cities, starting from the eastern coastal hub of Zhoushan and stretching to the western city of Horgos bordering Kazakhstan. It loosely follows the same path as the legendary Silk Road, a network of trade routes that for centuries was central to economic, cultural, political and religious interactions.
Tesla drivers will be able to travel to tourist attractions including the Kumtag Desert, the Turfan volcano and Sayram Lake, famous scenic destinations in Xinjiang, all without worrying about their cars losing power.
China, the world’s biggest electric car market, is critical to Tesla, which has a factory in Shanghai and sells thousands of cars there every month. The California-based company has already set up around 840 charging stations in China and more than 65,000 supercharging poles covering over 310 cities.
Now there will be one charging station every 100 kilometers to 300 kilometers along the Silk Road and drivers can charge their cars to run for up to 250 kilometers in a single go in just 15 minutes, if weather conditions are supportive.
The video, in Chinese with English subtitles, may also be another effort by Tesla to restore its image in China, which has taken a battering in recent months after some of its cars were banned from military complexes on security concerns and following a high-profile protest by an unhappy customer at the Shanghai Auto Show in April.
Despite those wrinkles, Tesla’s China shipments were strong in May, with the company reporting wholesales of 33,463 locally made vehicles last month, compared with 25,845 in April, according to China’s Passenger Car Association.
Fire Erupts At Tesla Big Battery In Australia During Testing
A fire has erupted at one of Tesla Inc.’s biggest utility-scale batteries in Australia as the facility was preparing to begin operations.
The fire occurred within one of the Tesla Megapacks at the Victorian Big Battery during initial testing between 10 a.m. and 10:15 a.m. local time on Friday, Louis de Sambucy, managing director of Neoen Australia, which operates the facility, said in a statement. No one was injured, the site has been evacuated and the companies are working closely with emergency services, according the statement.
MR: Large battery fire in Moorabool
FRV is currently responding to a battery fire on Geelong-Ballan Road.
A large lithium battery is fully involved with crews working to contain the fire and stop it spreading to nearby batteries.
— Fire Rescue Victoria (@FireRescueVic) July 30, 2021
The site, near Geelong in Victoria, has been disconnected from the grid and there will be no impact to electricity supply, Neoen said. An Australian Energy Market Operator spokesperson confirmed that the site has been separated from the grid, and that the incident has not impacted electricity supply.
There is currently no threat to the community, Fire Rescue Victoria said.
Installing the 300-megawatt system in Australia’s second-most populous state is designed to modernize and stabilize the local grid, according to Neoen. AEMO has reserved 250 megawatts of the battery.
Battery storage technology is being deployed on an ever-growing scale to meet demand to back up the surge in wind and solar power generation, and Tesla’s technology has been used at several utility-scale projects across Australia.
Australia has been at the forefront of large-scale battery deployment since Tesla Chief Executive Officer Elon Musk in 2017 won a bet on Twitter that he could install one within 100 days and the Victorian Big Battery was the latest vying to be crowned the world’s largest. Tesla’s energy generation and storage business has been growing, though it still made up less than 7% of the company’s total revenue in the second quarter.
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