Source: Wall Street News

January 7, 2020$Tesla (TSLA.US)$The first domestic Model 3 was delivered at the Shanghai Gigafactory. Musk personally visited the scene and was excited to have an impromptu dance.

He first walked around the stage, wiggled his huge body to the rhythm of the music, and finally simply took off his jacket and danced a “striptease.”

Musk's excitement is understandable.

This day is significant for Tesla.

A few years ago, Tesla fell into a serious production capacity crisis and cash flow crisis. On the one hand, Model 3 production could not meet delivery needs; on the other hand, huge R&D investment caused the company's capital link to collapse.

Coupled with the siege of Wall Street giants, Tesla was once on the verge of bankruptcy.

However, with the commencement of deliveries at the Shanghai Gigafactory, all production capacity issues have been solved.

Back then, Tesla's production soared from 365,000 in 2019 to 509,000 units, and production continued to rise to 930,000 and 1.37 million units in 2021 and 2022. Among them, the production share of the Shanghai Gigafactory increased from 30% to 53%.

At the same time, Tesla's market capitalization began a rapid path. From the end of 2018 to the end of 2021, the market capitalization soared from US$57.4 billion to US$1.06 trillion, an increase of more than 1,600% in three years.

Arguably, the Shanghai factory saved Tesla.

Turning to the present, Tesla is once again facing a moment of life and death — sales are still not improving after several rounds of price cuts, Musk has to seek a “broken arm to survive”, 10% of global employees have been laid off, and 14,000 employees have been “graduated.”

According to the financial report released last week, Tesla's revenue for the first quarter fell 9% year on year lower than market expectations. Not only was it the first year-on-year decline since the second quarter of 2020, but it was also the biggest drop since 2012. Affected by price cuts and the burning of money to develop AI, net profit fell 55% year on year.

At the time of his life and death, Musk visited China by accident. Allegedly, the purpose was to push for FSD to land in China. Tesla and other intelligent connected vehicles made new progress in China. Will Tesla's “Lucky Land” show its prowess again?

Robotaxi promoted by Maskley, Wall Street didn't buy it. Can Tesla deliver the Model 2 that Wall Street is looking forward to?

Against the backdrop of sluggish global demand for automobiles and declining attractiveness of existing models, Tesla needs to regain dominance with new products.

In response to this question, Musk painted two big cakes for Wall Street: the autonomous taxi Robotaxi and the next generation car (probably the rumored cheap model Model 2).

Musk said Tesla plans to launch Robotaxi in August this year and start production of a new, more affordable next-generation model in the second half of next year. The new model was first introduced later this year, and probably early next year.

In the first quarter earnings call, Musk said that “autonomous driving” is Tesla's top priority now, and educating investors, if they don't agree that Tesla is an autonomous driving company, they should not buy Tesla stock.

As can be seen from Musk's statement, he will spend more effort on Robotaxi in the future. Tesla's critical advancements in fully automated driving (FSD) technology have boosted his confidence in robot taxis.

But the problem is that compared to remote autonomous driving, Wall Street and the market are looking forward to Model 2 in the short term.

Tu Le, founder of electric vehicle consulting firm Sino Auto Insights, said in a recent media interview: “I'd say it will take at least eight to nine years for the Robotaxi to be put into use.” This is the most optimistic situation.

When Tesla was the only star electric car company, timing wasn't an issue, but that's no longer the case. Considering rivals everywhere, Musk didn't have eight or nine years to save Tesla.

Also, there are concerns that using a cheap model to attract consumers and Wall Street may not be effective in relieving the pressure Tesla is currently facing.

On the one hand, local Chinese electric vehicle companies can produce at a much lower cost. On the other hand, traditional car companies have increased their promotion efforts for oil trucks and hybrid vehicles, which are further encroaching on the automobile market share.

Tesla's stock price skyrocketed after Musk reconfirmed plans for the new model, but if the Model 2 is not launched as scheduled, it will be tantamount to Tesla raising a white flag in the fierce battle for electric vehicles around the world, and Tesla's stock price will once again be heavily pressured.

Will FSD land in China? Is Tesla's “Fukuchi” once again showing its prowess?

Seeing that Tesla had fallen into a “desperate situation,” Musk once again set his sights on Tesla's “blessed land” — China.

According to Xinhua News Agency, on the afternoon of April 28, Musk arrived at the Diaoyutai State Guest House in Beijing and had an in-depth exchange with Premier Li Qiang of the State Council.

Li Qiang said that with deep economic integration between China and the US, you have me, and I have you, both can benefit from each other's development. Tesla's development in China is a successful example of Sino-US economic and trade cooperation.

Musk said that Tesla's Shanghai Gigafactory is Tesla's best performing factory, thanks to the hard work and wisdom of the Chinese team. Tesla is willing to further deepen cooperation with China and achieve more win-win results.

According to a recent article in the Global Times, some people speculate that Musk's current visit to China is aimed at promoting FSD's implementation in China. Earlier this month, Musk said on social networking platform X that it would “soon” launch FSD technology to Chinese users.

It is worth noting that on the first day of Musk's visit to China, Tesla passed China's automotive data security compliance requirements.

On April 28, the China Association of Automobile Manufacturers and the National Computer Network Emergency Technical Handling Coordination Center issued the “Notice Concerning the Inspection Status of the Four Safety Requirements for Vehicle Data Processing”. All models produced by Tesla's Shanghai Gigafactory met compliance requirements.

According to the First Financial Report, Tesla said that all parts of the country have successively lifted the ban on smart connected vehicles such as Tesla.

On the same day, Musk said on X that Tesla will invest about 10 billion US dollars in AI training and reasoning this year, while reasoning is mainly used in cars.

Also, according to media reports, it is reported that Tesla will cooperate with Baidu in China on maps and navigation functions.

With all the above reports, is it a surprise that FSD will soon land in China?

According to the CICC research report, if FSD is promoted in China, the complete data loop needs to be in the country, and preparations need to be made in terms of data collection and model training to consider whether the BEV sensing solution can be well adapted for localization. In China, FSD map surveying may require cooperation with Chinese manufacturers, and Tesla needs to build a local computing center and set up a local algorithm adaptation team.

The last time Tesla was on the verge of bankruptcy, China saved Musk. Can this time, the miracle be repeated?

editor/tolk