It’s getting harder and harder for Tesla to make money.
Tesla’s third-quarter financial report just released this morning shows that its financial performance has declined to a certain extent compared with the same period last year.
Specifically, due to the pressure of falling car sales prices and rising costs, Tesla's revenue and profit indicators have declined. Total revenue fell 9% year-on-year to US$23.4 billion; gross profit was US$4.18 billion, a year-on-year decrease of 22%. %; GAAP net profit was US$1.85 billion, a year-on-year decrease of more than 40%.
Tesla blamed many factors for the decline in net profit.
First, the company upgraded its factory and reduced production, resulting in a decline in deliveries. On the other hand, Tesla is investing heavily in artificial intelligence and has "launched one of the largest supercomputers in the world," which calculates Capacity doubled from the previous quarter.
In terms of cash flow, Tesla's cash flow from operating activities this quarter was US$3.3 billion, a year-on-year decrease of 35%; free cash flow was US$848 million, a year-on-year decrease of 74%. The cash balance at the end of the quarter increased by US$3 billion from the previous quarter, reaching $26.1 billion.
▲Picture from: Bleeping Computer
After looking at the revenue, let’s look at the delivery.
This quarter, Tesla produced more than 430,000 vehicles globally and delivered more than 435,000 vehicles, including nearly 16,000 Model S/X vehicles and nearly 420,000 Model 3/Y vehicles.
It can be found that despite significant price cuts, the sales of Model S and Model X still declined (sales volume in the second quarter was 19,000 units). In this regard, the lack of physical levers and ultrasonic sensors may have had a certain negative impact, but the reason is still due to Tesla's "ignorance" of the S/X high-end product line.
Rather than adding HUD, surround-view imaging and other functions, Tesla should introduce integrated casting, 48V, 4680 battery and other technologies to S and X. Otherwise, Tesla can only continue to lower prices.
As for Model 3 and Model Y, due to the generation gap of the former, the total delivery volume also declined slightly. However, looking forward, with the delivery of the new Model 3 and Cybertruck in the fourth quarter, Tesla expects that the delivery volume for the whole of 2023 will still be It will exceed the 1.8 million units set at the beginning of the year and is still higher than the 50% compound growth target.
*Before going to press, Tesla China officially started sales of the refreshed version of Model 3, priced at 259,900 yuan for the rear-wheel drive version and 295,500 yuan for the long-range all-wheel drive version.
Dig a tunnel with a spoon
Musk mentioned in this morning's earnings call that Tesla is further reducing the manufacturing cost of cars by improving engineering design, optimizing supply chain management, improving production efficiency and other methods.
In a high interest rate environment, we believe focusing on R&D investment and capital expenditures for future growth while maintaining positive free cash flow is the right approach.
Musk said reducing vehicle production costs remains Tesla's top priority. In the past period of time, the company has carried out "ruthless" cost reduction internally, breaking down every expenditure in detail to save "a few pennies" on each component. In the third quarter, Tesla's cost per vehicle has dropped to $37,500.
"It's like digging a tunnel with a spoon," Musk said.
Although Tesla has controlled costs to the extreme, Tesla's total gross profit margin this quarter was only 17.9%, lower than the 18% expected by analysts. In the face of constant price cuts, Tesla's once proud Gross profit margins have dropped to more modest levels, which is not good for investors.
On the other hand, Tesla today has also lost the ability to control gross profit margins by increasing selling prices .
Putting aside the increasingly fierce market competition, rising interest rates and inflation have also put tremendous pressure on Tesla. How to maintain the affordability of electric vehicles is a major challenge Tesla faces today.
Musk emphasized many times in the conference call that for most consumers, the monthly payment pressure is also a key factor in purchasing a car. However, as interest rates continue to rise, consumers’ monthly payment pressure has also increased. This has already It has had a certain negative impact on Model 3 sales.
In this regard, Tesla can only continue to lower prices .
It is a factory and an ecological paradise
In terms of production capacity expansion, Tesla is expanding its production scale in Texas and Berlin to meet the growing demand of the market. But Musk also said that the overall macroeconomic environment must be carefully considered to avoid blind expansion.
The Cybertruck, scheduled to be delivered on November 30 this year, will be produced at the Texas factory. Currently, Tesla has deployed 4 production lines in the factory. But Musk said that it was extremely difficult for Cybertruck to go from prototype to mass production.
Mass production is 10,000% as difficult as building a prototype.
▲The Cybertruck delivery poster just released by Tesla
The construction of talents and infrastructure has also become a potential bottleneck for Tesla's development. As Tesla expands its production capacity in Texas, the region has experienced talent shortages and housing shortages. Musk said Tesla needs to overcome these issues to support long-term growth.
It should be noted that Tesla currently only occupies a small part of the Texas factory land, and the factory still has a lot of room for development.
Before releasing its third-quarter financial report, Tesla revealed that they had invested US$5.8 billion in the Texas factory. The factory currently has more than 12,000 employees and paid more than US$64 million in taxes.
Tesla will not stop here. Before the Texas factory is fully completed, Tesla will invest more than $10 billion in the factory.
However, so much money is not entirely used to build cars. Tesla also announced a plan – farming. Yes, pure electric car companies still have to be environmentally friendly after all. They plan to build an "ecological paradise" covering an area of nearly 50 hectares (approximately equal to 71 standard football fields) at the Texas factory.
When Musk made the announcement, in addition to mentioning boardwalks, hiking, biking trails and trails to streams, he also talked about thousands of trees and plants and the removal of invasive species. In order to improve the soil, Tesla will also create a "shallow water habitat" covering an area of about 12 hectares.
This may sound a bit unrealistic, but in fact, Tesla has already started to do it, and they have sown 18.62 hectares of land so far.
Use artificial intelligence to unify the world
I will say it again, Tesla has the best AI team on the planet, and they are getting better.
Musk believes that Tesla has a huge lead in artificial intelligence, which is reflected in two aspects, autonomous driving and robots.
Tesla recently released a demonstration video of the FSD Beta V12, and without any surprises, the video shows the FSD’s point-to-point commuting capabilities on actual roads in Austin.
Unlike in the past, today's FSD already has the ability to perceive and understand the world through visual neural networks, "just like humans," Tesla described. FSD is currently moving towards end-to-end artificial intelligence rather than relying on traditional software logic.
"We are able to collect anonymous data from vehicles driving on the road, which means that the neural network learns several orders of magnitude more knowledge from driving than the average human driver, including some unusual scenarios." The financial report released in the third quarter showed that, The cumulative mileage of FSD Beta has reached 840 million kilometers.
It is said that one learns from one's mistakes. Tesla is using failure after failure to "feed" FSD.
In addition, FSD has made great progress in entering China. The following picture of the FSD Beta switch in the refreshed version of Model 3 explains everything.
On the other hand, thanks to the exponential increase in the scale of artificial intelligence training calculations, the Optimus robot project has also made great progress. This humanoid robot can now perform more complex movements and actions, and can even do yoga.
Musk said that Optimus can automate operations on factory lines in the future, and "at some point in the future, robots can make robots." It has been previously reported that Tesla plans to deploy some Optimus robots in the factory next year to participate in production work.
Musk has always believed that with artificial intelligence, the rules of the game can be changed – just like their supercharged network.
The BMW Group recently announced that in 2025, pure electric vehicles sold in the United States and Canada will adopt the North American Charging Standard, also known as NACS. By then, BMW, MINI and Rolls-Royce brand pure electric vehicles in the United States and Canada will be able to use designated Tesla Supercharging stations.
To break it down, the brands currently joining the NACS charging standard led by Tesla are: Ford, General Motors, Rivian, Volvo, Polestar, Electrify America, Mercedes-Benz, Nissan, Honda, Acura, Jaguar, Hyundai, Kia, BMW, MINI , Rolls-Royce.
It seems that this is the rhythm of "unifying the world".
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