Specialist
VP at US EV manufacturer
Agenda
- Tesla’s (NASDAQ: TSLA) volume outlook by region and model type
- Pricing dynamics amid reduced prices across regions and China subsidy removal
- Manufacturing and execution risk – German Gigafactory progress and China manufacturing review
- Mid-to-long-term growth and profitability outlook, highlighting potential risks
Questions
1.
Tesla missed volumes consensus in Q4 2022, delivering 405,000 vehicles instead of 431,000. What do you think are the main issues behind this?
2.
In 2023, Tesla is guiding 1.8 million vehicles globally, which is below the company’s long-term target of 50% CAGR. How realistic is this number, given the issues you outlined might persist? If it’s not realistic, what is a realistic number?
3.
China has reduced subsidies on EVs and Tesla has also reduced prices after a demand slump YoY in December 2022. Are there any particular regional drivers for the softening of demand in China?
4.
Do you think Tesla’s price reductions are enough to stimulate demand, or does the company have other levers to pull?
5.
You mentioned the increasing competitiveness of the China market with local players such as Nio and BYD, which sold over 1.8 million EVs in 2022. How big a threat are local players in China, and could they start eating into Tesla’s volume there?
6.
Do you think price reductions could hurt Tesla’s brand desirability? There’s been some backlash, particularly in China, from customers who have bought the models you mentioned recently.
7.
What costs are being reduced to allow Tesla to decrease pricing to this magnitude?
8.
How do you think the price drops will impact Tesla’s order intake levels in percentage terms across regions?
9.
How might Tesla’s price reductions impact gross margins? Some analysts have suggested that the company’s gross margins will fall below 20% due to the price drops.
10.
As you mentioned, Tesla has strong cost reduction programmes and has spoken about accelerating the cost reduction roadmap. Which elements of the company’s roadmap do you think can be accelerated?
11.
What’s your 12-month outlook for battery costs? Do you expect to see continuous improvement?
12.
You said Tesla’s gross margins will be under pressure for some time and the company will have to put pressure on its suppliers. We saw gross profit margins decline in Q4 2022. Why do you think that happened?
13.
What do you think is a sustainable gross profit margin for Tesla in 2023-25?
14.
You mentioned that some of Tesla’s model line-up is dated. How strong is the line-up, and what model refreshes are required to sustain sales?
15.
You mentioned the Cybertruck, which has been delayed. One would expect there to be a certain level of demand, at least in the US market. What are the main issues delaying the Cybertruck?
16.
You classed Tesla’s Semi as somewhat of a distraction, but with some fleets looking to electrify within this decade, it seems the Semi could be an important part of the business. Do you think it could be a real revenue driver?
17.
What are Tesla’s main execution risks, in terms of scaling production further and so on?
18.
Tesla’s Berlin factory has just reached 3,000 cars per week and the company wants to raise the capacity to one million per year. What are the roadblocks for reaching one million?
19.
Another thing that Tesla talks about is vertical integration. One component of that is the 4680 battery, which promised improvements in range, energy density and charge time. Why are we not seeing these promised improvements in the Model Ys that carry this battery?
20.
On the vertical integration strategy that Tesla is pursuing with battery cells, one of the main opportunities is cost. What are the other main opportunities, and what risks come with this strategy?
21.
What are your 1-5-year expectations for Tesla’s vehicle production capacity across its four existing factories?
22.
Which players are Tesla’s competitors across China, North America and Europe, and who do you see as forming the biggest threat?
23.
Despite the increasing range of EVs offered by legacy OEMs and even premium ones such as Mercedes and BMW, why do you think Tesla is still outselling all of them?
24.
Do you expect the wide variety of EVs that will be offered by other automakers to present a big threat to Tesla, just by virtue of having more to choose from when looking at players such as Mercedes, BMW or Hyundai?
25.
GM CEO Mary Barra recently talked about overtaking Tesla in EV sales volume by 2025. Do you think that’s a realistic scenario?
26.
Tesla benefits from a higher margin, so the company can play with price quite a bit and reduce prices to the extent it has recently without going into the negative zone, whereas many other automakers can’t. How sustainable is Tesla’s margin advantage?
27.
How confident are you in Tesla’s management team to steer the business towards growth?
