Tesla, which lost $600 million on bitcoin, is increasingly dependent on China

2022-08-04 0 By

Recently, Tesla filed its 10-K annual report with the SEC, revealing a series of more specific financial data.In addition to the usual numbers of deliveries and total revenue, tesla’s 10-K document covers the progress of major projects such as energy storage, financial services and factory construction. In addition, it also mentions potential operating risks, the share of revenue in major global markets, and changes in book value since the purchase of Bitcoin.Tesla said it will continue to expand production at existing plants and plans to further control costs by increasing local manufacturing capacity in major markets, including gigafactories in Berlin and Texas, both of which will open this year.In addition, energy storage business has a strong presence in Tesla’s layout. According to Tesla, it has developed software that can remotely control and schedule energy storage systems.However, the profitability of the energy storage business has yet to show. In the fourth quarter of last year, the revenue of the energy storage business fell by nearly 15% quarter-on-quarter to $688 million (about 4.38 billion yuan), accounting for only nearly 4% of the total revenue, and the profit margin needs to be further explored.Of course, Tesla’s investment results in bitcoin, which has always been “unprofessional”, have also attracted much attention. After all, Musk was once known as the “first person with cryptocurrency”, and his company’s investment results seem to be more able to test Musk’s “with money” performance.According to data, Tesla lost $101 million last year due to the bitcoin crash. At the peak of last year, Tesla only made about $1 billion (6.36 billion yuan) from its bitcoin investment, which even surpassed the net profit of its auto business in 2020.Since then, bitcoin prices have been weighed down by multiple negative factors at the end of last year.Losses on Bitcoin, while relatively acceptable, are still a negative sign when compared to the auto business, where gross margins are steadily rising.Tesla’s bitcoin holdings still had a fair market value of $1.99 billion at the end of last year.On the other hand, the 10-K document again shows the importance of the Chinese market to Tesla.The words “China” and “Shanghai” appear 45 and 65 times, respectively, and the Shanghai plant has become a buzzword in Tesla’s earnings reports, meetings and reports.First of all, of Tesla’s total revenue of $53.823 billion last year, The Chinese market contributed $13.844 billion (about 88.06 billion yuan), accounting for nearly 30%, second only to the US market and increasing by more than 100% for two consecutive years.Such a high rise behind, cannot leave Shanghai gigafactory plus support.The Shanghai Gigafactory accelerated localization of vehicle production and provided more room for gross margin growth, giving Tesla the power to become a “price butcher”. It also helped Tesla to leave a number of new domestic car makers far behind. Its cumulative deliveries last year were more than three times that of The Total deliveries of The Company.And when the Berlin plant could not start production on time due to delays in obtaining construction permits, the Shanghai plant shouldered the heavy responsibility of filling the gap.Model 3 models produced at the Shanghai factory have been exported to dozens of countries including Germany, France and Italy since October 2020, two years after production began.Previous media reports said the Shanghai plant exported 160,000 vehicles last year, including more than 130,000 for the Model 3 alone.Therefore, it is not difficult to see that the demand and supply capacity of the Chinese market are crucial to Tesla’s revenue and cost control.Looking ahead, it is foreseeable that Tesla will continue to increase production capacity at the Shanghai plant, which will be more targeted at domestic consumers once the Berlin plant opens.During last month’s earnings call, Musk revealed that Tesla had no plans to launch a new model this year, and remained focused on increasing production capacity and looking for new gigafactory sites, which will be announced by the end of the year.In fact, at the end of last year, there were many media reports that Tesla was looking to build a second gigafactory in some Chinese cities, which immediately attracted the attention of many people inside and outside the industry. Tesla’s global vice president Tao Lin later publicly denied the news.But there is no denying that if Tesla does build a second factory in China, or if it continues to push into a lower price range with increased production capacity, other new car makers will face a more immediate “dimension reduction” blow.ZAKER News/Bao Xingwa Editor/Zeng Xiantian