Recently, I saw a rather shocking news in several media, that is, Tesla's market value has now surpassed the total market value of Ford and GM, and Tesla has become the highest listed car manufacturer in American history. So what's behind the surge in Tesla's market value? Can Tesla's high stock price last?
Under the unfavourable situation, Tesla exceeded market expectations and sales volume increased significantly, especially the Tesla Model 3, and the delivery volume was much higher than the same period last year. Some experts even predict that Tesla Model 3 car sales may exceed Nissan Leaf sales in the short term and become the world's best-selling electric car model. So is Tesla's recent rise in market value directly related to product sales? Such a definition does not seem logical, because the total sales volume of Ford and General Motors is 10 times that of Tesla. If the stock price is determined by sales volume, there is no reason why Tesla is higher than Ford and GM. How does the market work?
In fact, Tesla's customer satisfaction is not high, and the body structure and design are also very general. It can even be said that it is the simplest and the lowest equipped car in the luxury car class. Many experts do not recommend Tesla, but the actual The situation is much better than expected, and Tesla cars can still sell well. What is the reason behind it? Some people say that the recent sales volume is a long-term accumulated order, because the previous production problems have been delayed and the shipment has not been able to be delivered. Now the operation has started to be smooth, and the delivery can be started, thus pulling up the sales volume. Is it really that simple?
Tesla's stock price rebound is actually due to the skyrocketing delivery volume. In 2017, the Model 3 only delivered more than 1,700 vehicles. At that time, Tesla was in a difficult situation and the production line continued to have problems. However, in 2017 and 2018, it is an explosive growth. Nearly 150,000 Model 3s are delivered in a year. Can such explosive growth not increase the stock price? And with the rapid increase in sales, profitability has also greatly improved, turning losses into profits. By 2019, Tesla has delivered a total of 300,000 Model 3s, and the entire department delivered more than 500,000 vehicles. The performance is beautiful, so it will welcome investors.
Later, Tesla went to Shanghai to build a factory again, which undoubtedly had a very positive impact on the stock price, so it attracted more stock market investors to buy Tesla stock. More than that, Tesla's German factory is about to start mass production. Tesla's prospects are bright. In Europe and China, a new round of big moves will soon begin, and sales will likely increase significantly. I predict that Tesla will enter the million-selling automaker club in 2020, and then start to move higher.
One thing we really can’t help but admire Tesla, its ambitious and strong execution, you see Tesla's Shanghai factory has just been completed, but the Model 3 just released soon after its establishment, this is too fast Come on. These batches of Tesla made in China are very competitive in price and immediately become the focus of consumers. The price of Tesla made in China has been lowered by more than 20%, plus the reduction of purchase tax, the lethality is really big enough.
I'm bullish on Tesla. At the same time, I also very much hope that they will work harder on after-sales maintenance services, improve technical support, improve customer satisfaction, and increase sales more significantly, and the market value will continue to rise. Let us look forward to it together.
There is no need for any introduction here on the coronavirus and we are swamped with information and updates every minute on the epidemic, the fear and anxiety of the people around the world, the devastating effect it is having on the world economy, lives that have been turned upside down, and the agony of not having any clue as to how long this effect will take. If the SARS and MERS experience can be any sort of reference, then this epidemic and the impact is likely to go on for another 6 months or so.
How is the epidemic affecting the automotive world? The immediate effect is that sales fell like a cliff. No one is coming to the showroom out of fear and government shutdown. However, business has to continue, so many dealerships have started to connect with potential buyers online and carry on the sales activities. “智能展厅上线，让您足不出户逛展厅”, shouts the headlines. You can go their websites, social media links, hotlines, the dealerships can provide all sorts of advice and can even pick up the car from the customers location to bring back to the dealership for servicing, maintenance and repairs.
Many new QR codes have been launched to assist the customers, and to provide information neatly categorized and arranged for the customer’s convenience. Dealerships also contact existing customers regularly to provide general and specific updates on the situation and dealership services for the customers, and to give advice on how to maintain the cars during the prolonged periods of inactivity. Many dealerships also provide consultation services on ways to disinfect the cars. “非常时期，非常的爱”, one dealership sends out messages to their customers, giving them moral support, and even offering groceries shopping for the customers if needed. Daily checks with the customers on their well-being is also common.
Insurance renewal is made simpler and government allows, during this period, just digital approvals and insurance certificates. Road tax renewals are also extended for the car owners’ convenience. I think the Chinese government has acted very quickly and decisively, most of what we have seen so far shows a very well-coordinated effort by the various government agencies and ministries, kudos to the Chinese government’s handling of the crisis in spite of the immense difficulty and challenges they faced.
Many of the auto production parts come from China, so with the lock down and shutdowns, supply will soon be affected. We can expect automotive production to fall sharply due to the shortage of parts and accessories. Even automotive service tools and equipment supply will be affected as most of them come from China too. With all these coming together, expect sales to plummet this year especially for the China market. So, what would happen after all the upheaval, when things gradually get back to normal?
One of the expected outcomes is that the auto makers may take advantage of the situation to quickly transform themselves and move faster towards car electrification. There would be less existing baggage allowing for swifter actions. There would also be pent up demand so the second half of the year will see a spurt in sales activities and transactions, though the full year would be still be down compared to the year before.
We wish everyone good health and resilience in this difficult period, but as history has taught us, it will soon pass, and we can look back stronger and more determined