Tesla, with its thick eyebrows and big eyes, has also launched the "extensive development plan".
On April 15, Musk issued a letter from all employees, saying that Tesla would cut 10% of its staff globally and release more than 14000 outstanding talents to the electric vehicle industry. On Monday morning, Tesla employees who could still use their work cards found that their colleagues' work stations had been emptied as soon as they arrived at the company.
At the same time, just 20 days after the price increase of 5000 yuan for the whole model Y system, Tesla announced a 14 thousand price reduction for all model models in a slap on the face manner on April 21.
The reason for the classic combination of layoff and price reduction is usually not complicated, but Tesla is not so popular.
The global electric vehicle industry has entered the price war of bayonet popularity from the spring of everything's growth. With the entry of new players, the market has accelerated into oversupply. In the last quarter, Tesla delivered only 387000 vehicles worldwide, down 8.5% year on year, almost falling below the lower limit of market expectations. This is also the first time that Tesla has seen quarterly sales decline in the past four years.
China's new energy vehicle enterprises have launched new cars benchmarking Model 3 and Model Y like dumplings, which makes Tesla, the pure electric brother, feel pressure. Recently, Musk said frankly in a program of X that Chinese automobile manufacturing is the most competitive in the world and will pose a serious challenge to Tesla.
Also facing challenges is Tesla's share price. In the past six months, Tesla's share price has dropped by more than 30%, making it the bottom of Magnificent 7, and it was almost expelled from seven investors.
Increasingly, analysts are no longer optimistic about Tesla's earnings. Since September 2023, the seller's researchers have continuously revised Tesla's net profit forecast for 2024. Wind has consistently expected a decline from $15.8 billion to $11.3 billion, a decrease of 30%.
However, it is far from the most serious problem faced by Tesla that the car is not as good as it was a few years ago. If Tesla's fate and car sales are locked in this way, I'm afraid that Musk is most worried about it.
From Bankruptcy to Starry Sea
Today's Tesla enjoys a generous valuation that is far more than that of ordinary car companies, and this generosity stems from the three valuation remoldings of Tesla in the market over the past decade.
The market initially did not recognize Tesla. The thin product line and the complicated cost reduction route of pure trams made Tesla hover on the verge of bankruptcy at the beginning of its listing in 2010. The Tesla Roadster, the world's first lithium-ion battery with numerous awards, starts at a price of up to US $98950, and finally only sells more than 2000 vehicles worldwide.
The turnaround occurred in the Model S delivered in 2012, which did not lose the performance of Roadster and nearly halved its price. NHTSA's five-star rating for safety timely dispelled people's concerns about the safety of electric vehicles. Commentators of the Wall Street Journal compared the Model S to Lamborghini after the test drive, and Wired magazine praised "Model S is very interesting to drive".
Tesla finally gained a firm foothold in the luxury electric vehicle market. In 2013 alone, Model S sold 22300 vehicles worldwide. Tesla's annual operating profit was only 6 million dollars, which seemed to be one step away from profit, far exceeding market expectations.
Tesla then ushered in its first valuation remodeling, from an emerging auto company that was closed at any time to an industry leader marked by pure electric car racing. In February 2014, Morgan Stanley analyst Adam Jonas raised Tesla's share price target from $153 to $320. Tesla's share price rose 14% for two consecutive days, and PS valuation hub came to 8x.
In the upswing of Model S sales beyond expectations, the market's debate on Tesla has shifted from questioning whether it can survive to how to measure the success and sustainability of its competitive advantage.
This sustainability was soon challenged by oil prices. Since September 2014, Brent crude oil has entered a deep bear market, with the price falling from $110/barrel to the lowest $28/barrel in just four months. The other aspect of the fuel vehicle's cost performance ratio is that the entire electric vehicle industry is facing a phased dilemma.
But this cyclical worry pales in the face of strong growth. In the third quarter of 2016, Tesla delivered a total of 24821 Model S and Model X vehicles, with a year-on-year growth of 114%, hitting a record high. This makes the market full of expectations for the upcoming Model 3, and the stock price returns to the rising channel.
On the other hand, some countries, mainly EU member states, have begun to discuss an increasingly radical timetable for banning the sale of fuel vehicles. It has become a consensus among a large number of investors that electric vehicles will eventually completely eliminate fuel vehicles.
At the end of April 2017, hundreds of KUKA robots purchased by Tesla were put into the production line of Fremont factory, making the expected production speed of Model 3 20 times that of Model S/X. Finally, in June 2018, Tesla fulfilled its promise to increase the quarterly production from 2425 to 5000. This has also become the story that investors are fond of talking about in the future about the tent factory saving Tesla from the production hell.
Tesla then completed its second valuation remodeling. The mass production of an affordable pure electric car has turned Tesla from an electric big toy to a banner of the new energy vehicle revolution. The significant improvement of delivery capability made the stock price rise start to fail to catch up with the growth of revenue, and the PS valuation center dropped to 5x.
As soon as he was liberated from the production hell, Musk, who could not afford to be idle, immediately made a fancy move. First, he said on Twitter that he would privatize Tesla at a premium of 20%, and then he repented 17 days later; After a few days of smoking marijuana in front of the camera, investors doubted the CEO's mental state; At the end of the game, I got a bill of prosecution for securities fraud from the SEC.
The continuous nonsense operation made many investors choose to sell, and the trade war put a heavy burden on Tesla's stock price. In Q1 2019, Sino US trade frictions affected the import of many parts and components, thus affecting Tesla's production. By the end of May 2019, Tesla's share price had nearly halved in less than a year.
However, the problem will be solved by the end of 2019.
With the delivery of the first batch of Model 3 in Shanghai Super Factory, Tesla's production capacity has completely exploded, and its stock price has also been on the Falcon Rocket. Even if the new world champion is in the forefront, 500000 vehicles will be delivered in 2020, and port manufacturing will contribute half of them.
It's just that during the three ups and downs in the process of topping, Tesla seems to be really out of gravity. 10 times PS in July 2020, 19 times PS in November 2020, and even 24 times PS in November 2021. The exaggerated valuation needs new narrative support.
The market does not lack the ability to tell stories, especially for a rising stock.
In July 2021, Gene Munster, a well-known technology analyst and co-founder of Loup Ventures, said that Tesla had taken an important step on the long-term road of improving profit margin as the autonomous driving FSD service changed from buyout to monthly payment. In his opinion, in ten years' time, FSD will bring an annual operating profit of more than 100 billion dollars. The market value of this service alone will reach 850 billion dollars, more than the current market value of the entire Tesla Company of more than 600 billion dollars.
However, in the bull market of technology stocks, ARK, which was at its peak at that time, was not satisfied with the AppStore mode, but gave a more bold prediction. In April 2022, ARK analyst Tasha Keeney believed that Tesla would soon achieve full automatic driving and establish an automatic taxi fleet. By 2026, 60% of its expected value would be contributed by the automatic taxi service.
Accordingly, ARK has set a target price of $4600 in 2026, which is more than double the peak of Tesla's share price. So far, Tesla has completed the third valuation remodeling, and the market has no longer regarded it as an automobile enterprise, but as a future of mankind stepping on the AI wave and waving the banner of autonomous driving.
However, even if the stories told at the high point of the market value with the indignation of the crowd can be landed one day, the stock price will still shine into people's accounts in an extremely tortuous way, just like the real life.
Achilles Chases Turtle
One day in March 2019, at dawn, Musk said to his then girlfriend Grimes: "We must raise funds, or we will be ruined [3]." This was almost the eve of Tesla's profitability, and Musk needed a financing to keep the company profitable until that day.
He quickly came up with a solution, which was to hold an "autonomous driving day" to show investors how Tesla could build an autonomous electric vehicle. On April 22, 2019, the first "Automatic Driving Day" of Tesla, Musk announced that Tesla would soon produce a fully autonomous car within a year. At that time, the company would deploy 1 million Robotaxis, and the driver profession would soon become history.
From SpaceX, Tesla to Open AI, Musk is a man who is good at creating miracles, but the cake of automatic driving is too big even for him.
In 2020, 2021, 2022 and 2023, Mask seemed to fall into the paradox of Achilles chasing the tortoise in the ancient Greek philosophy world: he would announce that he would realize automatic driving within one year every year and then renege on his promise. Even Jia Yueting, a well-known accountant, couldn't help teaching Tesla how to make products.
Jia Yueting said recently that the advantages of FF in AI applications and smart cockpit can help Tesla overcome its shortcomings
In fact, not only one million robotaxi are far away, but also the growth rate of FSD subscription revenue is slow, which makes minority shareholders anxious.
According to the market's expectation in 2024, the proportion of "other products and services revenue" including FSD subscription revenue will only rise from 7.3% in 2020 to 8.6%. Compared with Apple's subscription revenue of more than 20% next door, Tesla is still firmly tied to "hardware sales", especially the growth of sales.
No matter how confident investors are, they can't help being pigeoned for five years. With the process of automatic driving falling short of expectations again and again, this company whose sales revenue accounts for more than 80% looks more and more like a car company rather than a software company.
Tesla's PE has dropped from 300 times at the peak to 50 times today, which is still far more than that of ordinary car companies.
From the technology catch-up stage before 2018 to the completion of algorithm innovation in the construction of a multi task learning neural network architecture Hydra Net in 2018-2019, and to the entry of automatic driving into the BEV+Transformer big model era in 2020, Tesla has become the first tier player with road test data that Waymo, Cruise and other companies cannot match.
When the FSD Beta V12.3 was launched on March 17 this year, great efforts were made to finally build up the "end-to-end" capability. Autopilot enthusiasts took the new version to experience the ability of this neural network excitedly in the parking lot of market opening customers: in a very limited meeting scene that is about equal to an old community in Shanghai with more than 30 years of housing age, V12 showed human drivers how to operate. With the large-scale push and trial, there are more voices waiting for the "GPT moment" of FSD.
Tesla FSD V12 First Drives (Highlights)，AI DRIVR
Tesla, with its computing power, algorithms and data, is undoubtedly one of the companies closest to fully automated driving today.
However, whether the massive data can really create the miracle of L5 is still a deep concern of the market. As long as Achilles has not caught up with the tortoise, and as long as humans are still sitting in the driver's seat to take over the endless long tail scene, Robotaxi is still "doing" rather than "done" from the ideal business model.
In the general environment of intensified competition, Tesla will still face the trouble of expected downward repair - obviously, those eager bears will not mind that Tesla's valuation is further closer to the car companies. After all, the average PE of an automobile industry that can be referred to is only 12 times.
Ivana Delevska, chief investment officer of Spear Invest, commented at the beginning of the year: "Tesla has failed to fulfill its commitment to fully automated driving and artificial intelligence, which has been embedded in Tesla's valuation. As another automobile manufacturer alone, it is unable to obtain a valuation of $750 billion [4]."
This assessment is pertinent: in the past three months, Tesla's market value has been less than 500 billion dollars.
The only safety rope left
Although Musk announced at the shareholders' meeting that a large part of Tesla's long-term value will be the humanoid robot Optimus, analysts who have eaten enough Musk's pancakes have become immune to this claim.
In the short and medium term, the burden of whether to prevent Tesla's valuation from keeping up with that of the car companies again falls on automatic driving. After the disclosure of the poor first quarter delivery data, Musk announced that Tesla Robotaxi will be finalized on August 8, 2024.
Sister Wood, "Tesla Pink Head", stood out to cheer for Robotaxi at the first time. In the latest interview, she predicted that by 2030, the entire ecosystem of self driving taxis will generate 8 trillion to 10 trillion dollars of revenue, and platform providers like Tesla will get half of it.
Accordingly, Sister Mu set a target price of $2000 for Tesla, which is equivalent to $10000 before the stock split.
But more investors are obviously not so excited. Since the official announcement of Musk, Tesla's share price has not even stopped falling. On the one hand, naturally, the wolf came and shouted too many times; More importantly, after five years of ticket skipping, Robotaxi is nothing new.
Waymo and Cruise have both obtained automatic driving operation licenses and completed the two important commercialization steps of "removing the safety officer" and "charging" early, which is far faster than Tesla. However, frequent accidents have made it difficult for the two companies to expand their businesses. Waymo's application for expansion services has been shelved, and Cruise's operating license has been directly revoked by the California government.
In fact, it is not only Tesla that has come to the brink of bankruptcy, but also the theoretical basis on which FSD relies.
The major improvements from V11 to V12 have made more and more people look forward to the arrival of the critical point of automatic driving. This "end-to-end" version, which does not use a line of code to identify roads, pedestrians and other road conditions, is all handed over to the neural network for its own thinking and decision-making. The theoretical building at the bottom was once abandoned by the academic community and the industry because of the difficulty in building it.
Whether it is FSD or GPT, today's scientific and technological circles had almost the same doubts about the degree of enthusiasm for neural networks just before 2006. So Jeff Hinton, the father of AI, had to rename "deep learning" to continue his 50 years of cutting-edge technology exploration.
The scientific world is always luring the smartest brain into those unknown frontier fields, and trying to push forward each technology step by step in a lifetime; The business world is very realistic. If automatic driving is still stuck in the "last mile" of technology, few people are willing to give a 50 times valuation to an exploration of unknown duration.
Even though Musk always hopes that people will regard Tesla as an artificial intelligence company rather than an automobile company, stock investors who have experienced many battles will always bring out the sophistication and vigilance of "believing that the chairman is totally lost".
The capital market likes to give Ai a deadline, and the scum man can't wait ten thousand years. Quantum mechanics has not yet developed to slow down the arrival of August 8, 2024. Obviously, there is not much time left for Tesla.
reference material
[1] Tesla Special Report III, Southwest Securities
[2] Tesla Special Report: Reviewing and Thinking, Everbright Securities
[3] Biography of Elon Musk, Walter Isaacson
[4] Foreign media: 2024 has a bad start, and Tesla's market value has evaporated by more than 94 billion dollars
[5] Global electric vehicle leader, scientific and technological innovation leading future growth, Huaxing Securities
Author: Sun Ran
Edited by: Zhang Jieyu
Visual design: Shurui
Drawn by: Sun Ran
Editor in charge: Zhang Jieyu
