In the future, Tesla's lead in the electric car sector is likely to be gradually reduced, with its core competencies in intelligence, driverless technology, data, and branding, said Ren Zeping, the chief economist of China's biggest property developer Evergrande Group and president of the Evergrande Economic Research Institute, in a recent report.
Tesla Model 3 could have a huge impact on China's mid-to-high-end traditional vehicle as well as the new energy vehicle market, he said.
In terms of China's new energy vehicle market, sales from January to November 2019 were 1,043,000 units. Of these, 832,000 pure electric vehicles were sold, mainly mid- and low-end models.
Therefore Model 3 competition targets are mainly BYD Tang, NIO ES6, etc., he said.
The current production capacity of Tesla's Shanghai plant is 150,000 units per year, and Ren Zeping expects the Model 3 to account for more than 12 percent of China's new energy vehicle market by 2020.
Ren Zeping is a well-known macroeconomist in China, having served as chief economist of several securities firms before joining Evergrande.
He is known for his analysis of macroeconomic trends, and analyzing the automotive sector is relatively rare for him.
Notably, China Evergrande NewEnergy Vehicle Group, the car making arm of China Evergrande, unveiled its first batch of six vehicles They are the Hengchi 1, Hengchi 2, Hengchi 3, Hengchi 4, Hengchi 5, and Hengchi 6, covering all classes from A to D, as well as the Hong Kong International Airport.
They are the Hengchi 1, Hengchi 2, Hengchi 3, Hengchi 4, Hengchi 5, and Hengchi 6, covering all classes from A to D, as well as passenger vehicles such as sedans, coupes, SUVs, MPVs, and crossovers.
The following is the full translated text of Ren Zeping's latest report.
When the "Silicon Valley genes" meet the "China market" "China-made", Tesla a year soared 8 times, market value exceeded $250 billion, has been Overtaking traditional car leader Toyota ($200 billion) to top the world's largest car company by market capitalization.
In 2019 Tesla took 357 days to turn farmland in Shanghai's Lingang New Area into Tesla's first overseas Gigafactory.
On January 7, 2020, the first batch of Tesla's China-made Model 3 was delivered in large quantities and the price was reduced to less than RMB 300,000.
At the same time, the Model Y project was officially launched.
Tesla has risen rapidly in recent years and surpassed all traditional car companies to become the world's largest car company by market capitalization.
This means that a big change in the automotive industry is coming, and the market is full of great expectations for the future of new energy vehicles.
Will China, with its huge market, strong manufacturing, and R&D capabilities, give birth to a world-class new energy vehicle giant?
Times make heroes and heroes make time.
1. The rise of Tesla to reshape the competitive landscape of the auto industry.
1) Model 3 becomes a hit.
From January to November 2019, Tesla Model 3 sales in North America reached 128,000 units, exceeding the combined sales of BMW 2/3/4/5 series in the same class (104,000), Mercedes-Benz C/CLA/CLS/E series (95,000), and Audi A3/A4/A5/A6 (70,000).
Meanwhile, GM, Ford and other traditional car companies are laying off workers.
FCA (Fiat Chrysler) and PSA (PSA Peugeot Citroen) merged to become the world's fourth-largest automaker.
The contrast between the traditional car companies and Tesla's rapid growth is stark.
2) Tesla started the wave of electrification and intelligence in cars.
The Model 3 not only made further improvements in the engineering technology of the three electric power but also adopted a centralized electrical and electronic architecture similar to that of a smartphone, which means that a central processor and operating system control all the hardware on the vehicle.
In the future, the core values of the automotive industry will no longer be the engine, body, or chassis, but the battery, chips, in-vehicle systems, and data.
For example, Volkswagen, the world's largest automaker, announced that it would become a software-driven company and set up a "Digital Car&Service" department to vigorously promote digital transformation.
Toyota announced that Toyota will be transformed from a car company to a mobile travel company, their competitors are not once Mercedes-Benz, BMW, and Volkswagen, but Apple, Google and so on.
3) Accelerating globalization strategy: Tesla's Shanghai factory is progressing faster than expected and is expected to replicate the story of Apple's "Silicon Valley innovation + China market”.
The Chinese government has given Tesla support inland, credit, and other aspects.
At the same time, China's strong manufacturing capacity and industry chain supporting capacity will make Tesla China-made cost or more than 20% lower than the US domestic production.
2. Tesla will take three generations of product positioning as the sinking path, and gradually expand its user groups by entering into the market with electrification, differentiated competition with intelligence, and high vertical integration.
At the same time, Tesla maintains its brand image of environmental protection, technology, and high-end.
At the executive level, Tesla has learned the lessons from the first generation of product development, and in the subsequent product life cycle, pays more attention to the balance between innovation, engineering and manufacturing, user experience and cost, and gradually builds its core competitiveness.
1) R&D: Tesla's R&D intensity has been above 10% over the years, which is much higher than the 5% average of traditional car companies.
In the electric car field, Tesla has a number of high technology, such as the combination of high nickel cells and high-precision battery management system, switching reluctance motor, and the first application of silicon carbide power semiconductor.
This increases the range and reduces the overall power consumption of the vehicle.
In the field of intelligent and autonomous driving, Tesla has developed its own vehicle operating system and self-driving chip.
At present, Tesla surpasses most of its competitors in the user experience of OTA and L2 autopilot of the whole car.
2) Manufacturing: Tesla pursues a highly vertically integrated production model.
It adopts the form of independent design + OEM or joint venture for core components such as electric cores and motors, firmly grasping the leading power of the supply chain and continuously reducing costs through scale effect.
According to UBS, the cost of the battery for the Model 3 is about $110/KWh, which is lower than other mainstream battery manufacturers such as LG and CATL.
3) Product matrix: After the Roadster, Tesla launched a new model in 2-3 years on average, Model S/X is positioned in the high-end coupe/SUV, Model 3/Y is positioned in the high-end sedan/SUV.
The few and lean, platform-based model matrix with Apple-style minimalist style also allows Tesla to focus more on creating a hit, thus diluting the R&D and production costs of individual models.
4) Branding, marketing, and service: Tesla has never advertised, but CEO Musk's successful "Silicon Valley Iron Man" persona and Twitter interactions have brought Tesla high traffic and media exposure.
According to the "2018 BrandZ Top 100 Global Brand Value" list, Tesla's brand value reached $9.4 billion, surpassing old luxury car brands such as Porsche.
At the same time, Tesla adopted a direct model instead of the traditional distribution system, using software + OTA to provide users with after-sales service throughout the vehicle's life cycle, further improving the user experience.
3. Tesla's future.
As the degree of vertical integration deepens, Tesla is constantly exploring business boundaries, but it also faces problems and controversies in capacity, product safety and quality, cash flow, and other aspects.
Tesla's future competitors are not only traditional OEMs like Volkswagen and Toyota, but also high-tech companies like Google, NVIDIA, and Uber, oil giants, hydrogen energy technology, and Chinese traditional and electric vehicle startups.
There are still variables in the global new energy vehicle market landscape.
1) Tesla will become a global car company.
Model 3 has become a phenomenal product in the US market.
The priority is to replicate the success in China with its self-built factories and low price policy, to gain market share quickly, and to start pushing the Model Y to meet the needs of SUV users.
Tesla will later launch the Tesla Semi, an electric truck, and the Cybertruck, an electric pickup truck.
We forecast that global electric vehicle sales will reach 35 million units in 2030, and Tesla's annual sales will reach 3 million units, with overseas market revenue accounting for more than 50% of the total.
2) Tesla's lead in electrification is likely to be gradually reduced in the future, with core competencies in intelligence, driverless technology, data, and brand.
From the history of smartphone development, the appearance and supply chain is extremely easy to imitate and learn from, but Apple's profits exceed the sum of all competitors. Because Apple's core is self-developed A-series chips, iOS system, and to build the application ecosystem and high-end brand.
Tesla will have a more efficient iterative algorithm than other competitors by developing its own self-developed self-driving chip and artificial intelligence algorithms, and with the largest number of fleets constantly providing real road data for deep learning.
In the future, once Tesla's camera route is proven to be feasible, it will reflect a significant cost advantage over the LIDAR route.
3) In the long run, automotive services and energy services will be the new growth areas for Tesla.
Tesla has established a global network of directly operated stores and charging facilities and is continuing to push new software and features to its customers through OTAs, as it continues to build its online + offline, car + energy service loop.
When fully automated driving matures, Tesla will also build its own fleet to provide taxi services.
Risks: auto safety accidents, China-US trade friction, etc.
1 Tesla's Brief History
In 2003, Silicon Valley engineers Eberhard and Tappenning founded the electric car manufacturing company called Tesla (Tesla Motors) in tribute to Nikolai Tesla, the inventor of the alternating current.
In 2004, the new Silicon Valley tycoon Musk became the largest shareholder and chairman of Tesla, raising $6.5 million in Tesla's Series A round of financing.
In August 2006, he put forward a "Master Plan", a three-step strategy that would guide Tesla's development.
To build an expensive, niche sports car (Roadster).
Use the money earned to build a cheaper, moderate selling car (Model S/X).
Use the money earned to build a more economical, best-selling vehicle (Model 3).
Do all of the above while also offering a zero-emission power generation option.
1.1 2003-2008: the difficult birth of the Roadster
Tesla entered the automotive industry with a high-end niche electric sports car.
Automotive is typically a technology- and capital-intensive industry, and one of the industries where startups have the lowest chance of survival.
Whether it's manufacturing, supply chain management, or branding, Tesla's early days were no match for traditional car companies with decades or even centuries of experience.
The cost of building a sports car or an affordable car was prohibitively expensive at a time when battery costs were as high as $1000/KWh and the industrial chain was still immature.
Tesla's thinking was very clear: since the first car was destined to lose money, it was better to launch a high-end electric sports car for high-income groups first and to completely overturn people's perception of the short-range and poor performance of electric cars.
In July 2006, Tesla officially launched the Roadster sports car.
The Roadster was a joint venture between Tesla and British Lotus, with a starting price of $98,000.
The supercar accelerates to 100 kilometers in about 3.7 seconds, has a top range of about 400 kilometers, and even surpasses traditional sports cars such as Ferrari in terms of pushback feeling at the start.
As the first hypercar to use lithium-ion battery technology, the Roadster was popular with many Hollywood stars and Silicon Valley executives, and other celebrities upon launch.
However, limited by the supply chain and core components technology bottlenecks, the Roadster production costs out of control, mass production difficulties.
At that time, under the leadership of CEO Eberhard, the Tesla team focused too much on technology development and performance improvement, and neglected production arrangements and product control, greatly delaying the progress of the finished product.
In June 2007, only two months before the Roadster went into production, Tesla still had not completed the development of the two-speed gearbox, a core component of the Roadster.
In addition, due to the lack of scale in supply chain procurement, development costs for the first 50 Roadsters rose from an average of $65,000 to more than $100,000, and more than 30 of the 1,000 scheduled customers canceled their orders due to delivery delays.
With the departure of the founder and turmoil at the top, Musk became CEO to save the day.
Because of mismanagement and out-of-control expenses, in August 2007 founder Eberhard was removed from his position as CEO and finally Musk himself.
In order to get the Roadster to market properly, the Tesla team decided to optimize the first gear gearbox instead of developing a new second gearbox and started cutting unnecessary expenses.
The first Roadster was finally delivered in February 2008.
The economic benefits of the Roadster were limited due to the product's positioning and audience.
From its debut in February 2008 until it was discontinued in 2012, the Roadster was sold in more than 30 countries and approximately 2,450 units were sold worldwide.
With a price tag of $98,000, Tesla was only able to recoup $240 million in cash flow from the Roadster, which was a drop in the bucket for the development and production of the second-generation Model S. In late 2008, the financial crisis caused Tesla to lose interest in the Roadster.
At the end of 2008, the financial crisis worsened Tesla's financial situation and Tesla was on the brink of bankruptcy.
1.2 2009-2015: Desperate times make for a hit
1.2.1 Crisis resolution and successful listing
The strategic investments by Mercedes-Benz and Toyota gave Tesla both financial and brand endorsement.
After the Detroit Auto Show in January 2009, Daimler ordered 4,000 battery packs from Tesla for testing of the Mercedes-Benz A-Class and took a 10% stake in Tesla for $50 million, forming a partnership.
In May 2010, Tesla received $50 million from Toyota for a 3% stake in the company.
The strategic partnership with two traditional car giants not only solved Tesla's immediate financial needs, but also allowed Tesla to quickly learn the production, management experience, and mode of know-how.
In addition, Tesla also acquired NUMMI, a former joint venture between Toyota and GM with an annual capacity of 500,000 units, at a low price of $42 million, laying the foundation for large-scale production.
With the strong support of the US government, Tesla's cash flow crisis was alleviated and the company successfully went public.
After the 2008 financial crisis, in order to promote economic development, the US Congress issued a series of policies to support local advanced vehicle technology and components research and development through subsidies and low-interest loans, including the US Department of Energy's $25 billion Advanced Technology Vehicle Manufacturing Loan Program.
In June 2009, Tesla was successful in obtaining a $465 million loan.
Tesla owners can also qualify for a federal tax credit of up to $7,500 (reduced to $3,750 in 2019) in the context of California's Zero Emissions Vehicle (ZEV) policy.
Tesla successfully went public on the NASDAQ in June 2010, raising a total of $226 million.
This was the first successful IPO of an American automotive company since Ford's in 1956.
1.2.2 Four years in the making, Model S becomes a hit
Positioned as a mid-size luxury sedan, the Model S was Tesla's first true production model and was delivered in June 2012.
Three models were available at the time, with batteries 40kWh, 60kWh, and 85kWh, priced between $57,400 and $87,400, corresponding to the acceleration of 100km in as fast as 4.4 seconds and a range of up to 483km.
For the first time, the Model S introduces a 17-inch center touchscreen with integrated vehicle information, navigation, music, and other functions, while a 4GLTE wireless network allows owners to enjoy free system OTA over-the-air upgrades, such as the Autopilot auto-assist feature introduced in 2014.
In January 2019, the Model S will no longer be available with a battery 75kWh option, with only the 100D and P100D models remaining.
As the first premium electric vehicle, the Model S was an instant hit.
By the end of 2012, Model S bookings had risen to 15,000 from 520 at launch.
In 2013, the Model S ranked first in the US mid-size luxury sedan market share, outpacing established luxury car brands such as the Mercedes-Benz S-Series and BMW 7-Series.
At one point in the fourth quarter of 2015, Model S sales reached 17,192 units and now exceed 260,000 units sold worldwide.
The Model S was awarded "2013 Car of the Year" by Motor Trend magazine, "One of Time Magazine's 25 Best Inventions of 2012", and the prestigious "Consumer" award. Reports' "Top 10 Most Satisfied Car Owners of 2017" and other accolades.
Pragmatism, a focus on long-term planning and cost control, Tesla's profitability and productivity increased dramatically.
With the delivery of the Model S, Tesla doubled its revenue and also turned around to a net profit of $11.25 million in the first quarter of 2013, and became the first automaker to pay off its low-interest Department of Energy loan that same year.
In addition to renovating its Fremont, California plant, Tesla entered into a partnership agreement with Panasonic in July 2014 to invest more than $5 billion in the construction of the Gigafactory1 in Nevada, USA, in order to move forward with Model S production and the Model X project and to meet its production plans for the next 5-10 years.
Gigafactory1 is responsible for all Tesla powertrains, including the lithium-ion battery, solar battery Powerwall, and Powerback supporting the Model series, in order to meet the annual 35GWh power battery capacity of 500,000 Tesla cars by 2020.
Panasonic is responsible for manufacturing and Tesla is responsible for battery assembly and further processing. Currently, the Gigafactory1 produces about 3.5 million 2170 power cells per day.
The Model X, a luxury SUV with eagle wing doors, was delivered in the third quarter of 2015.
Compared to the Model S, the Model X doesn't offer much in the way of performance innovation, and both are similar in terms of customer orientation and price.
The Model X is designed to meet the needs of the luxury SUV market, which is more demanding, and to diversify the product line.
Sales of the Model X are still growing as compared to the steady trend of the Model S. The Model X is still growing.
With total global sales of more than 120,000 units, Tesla's share of the US large and mid-sized luxury SUV market is close to that of competing products such as the Mercedes-Benz GLE and BMW X5.
At the same time, Tesla has carried out a series of industry vertical integration.
In addition to Gigafactory 1, it has built Superfast Supercharger and Destination Charger in large numbers and increased the number of storefronts and service centers globally.
1.3 2016-present: towards mass production
Mid-size cars are the largest and most cost-effective segment of the market.
Based on wheelbase, length, price, and features, the car market can be divided into six segments: micro, small, compact, midsize, midsize, and large.
The importance of the mid-size market in all segments is determined by the industry law that for every $5,000 drop in the price of a car, the number of potential buyers doubles.
For Tesla, the mid-size car is not only the key to its Phase 3 goals but also a key strategic factor in determining whether Tesla can truly become a mainstream car company.
Model 3 follows the Model S as the iconic product for Tesla's successful market expansion.
Announced in March 2016 and delivered by the end of 2017, the Model 3 is extremely cost-effective with a standard starting price of $35,000 and a range of 354 km.
As production capacity climbed, Model 3 sales in the US surpassed those of its counterparts, such as the BMW 5 Series, Mercedes-Benz E-Class, Audi A6, and other traditional luxury fuel-efficient models.
With more than 160,000 units sold across the US in 2019, the Model 3 is the 2019 US midsize luxury sedan market champion.
The great success of Model 3 has boosted Tesla's revenue even more.
For the full year 2018, Tesla's revenue reached $21.46 billion and net income narrowed to a loss of $980 million from a loss of $1.96 billion in 2017.
For the first three quarters of 2019, revenue reached $17.19 billion and net profit fell slightly to $970 million.
By item, full-year 2018 auto sales reached $17.63 billion, or 82.2% of overall revenue, and were Tesla's primary source of revenue.
By country and region, the US remains Tesla's main market, accounting for nearly 70 percent, while mainland China accounted for 8.4 percent of the market.
The China-made Model 3 has stirred the Chinese mainland new energy vehicle market with its low-price strategy.
As one of the important strategies for internationalization, Tesla attaches great importance to the Chinese mainland new energy vehicle market and has built its own Gigafactory in Shanghai.
Due to the low labor and fixed asset costs in China and the attractive loan policies of the Shanghai municipal government, Tesla's capital expenditure in Shanghai is 65% lower than that in the US.
China-made Tesla will cut prices to enter the mid- to the high-end market.
The entry-level Model 3 will be priced below RMB 300,000 and the first employee deliveries will be completed by the end of 2019.
The price increase consists of three aspects.
On the first aspect, Tesla officially announced on January 3 that the prospective range-extended upgrade was cut from RMB 355,800 to RMB 323,800, a price cut of up to RMB 32,000.
On the second side, it was selected in the 11th batch of the "Catalogue of Recommended Models for the Promotion and Application of New Energy Vehicles" on December 6, 2019, and enjoys a subsidy of RMB 24,750 per vehicle.
On the third aspect, it was selected in the 29th batch of the Catalogue of New Energy Vehicle Models Exempted from Vehicle Purchase Tax on December 27, 2019, and enjoys purchase tax exemption.
The three factors contributed to the Model 3's entry price dropping from RMB 355,800 to RMB 299,000, a 38.8 percent price cut compared to the April 2019 imported version.
Model 3 could have a huge impact on China's mid- to the high-end traditional car as well as the new energy vehicle market.
From the traditional car market, China's traditional mid- to high-end cars (in the RMB 280,000-420,000 range) sold 1,361,000 units from January to November 2019, accounting for 5.9% of traditional car sales, mainly ABB car lines such as Audi A4L, Mercedes-Benz C Series, Buick GL8 and BMW 3 Series.
In terms of the new energy vehicle market, sales from January to November 2019 were 1,043,000 vehicles, of which 832,000 were pure electric vehicles, mainly mid- and low-end models, so the Model 3 competition targets mainly BYD Tang and NIO ES6.
Currently, Tesla's Shanghai plant has a production capacity of 150,000 units per year, and Model 3 is expected to account for more than 12% of China's new energy vehicle market by 2020.
As part of the transition to sustainable energy, Tesla is accelerating the deployment of the new energy chain, from electricity production to energy storage and transportation, including the construction of factories, energy storage networks and charging networks in key markets around the world.
In terms of manufacturing plants, in order to reduce the impact of tariffs and consequently production costs to increase the price competitiveness of products, and to pave the way for a long-term market strategy, Tesla built the Tilburg assembly plant in the Netherlands to assemble and test the Model S/X for European customers, and the Gigafactory 3 in Shanghai to manufacture the Model 3 for Chinese and Asian customers.
For energy storage, solar power generation is used to cover home energy storage and large-scale photovoltaic energy storage systems.
Home energy storage products are Powerwall batteries and Solar Roof.
Solar Roof collects solar energy during the day and converts it into electrical energy to be stored in the Powerwall, which can be discharged when the family has electricity demand, forming an organic cycle of "storage and discharge”.
Large-scale energy storage system products are Powerpack, mainly for commercial and industrial energy storage utilization.
In order to better penetrate the field of energy storage, in addition to the Gigafactory 1 production Powerwall and Powerpack battery, Tesla in November 2016 to $260 million to acquire photovoltaic company SolarCity 22% stake, and in Buffalo, New York to build the Gigafactory 2 production of solar panels.
As for the charging network, Tesla's main products are Superfast SuperCharger, Destination Charging, and Home Charging.
Home Charging is the aforementioned car charging using solar + energy storage, which takes about 10-14 hours to fully charge.
The third generation SuperCharger can charge up to 250kW, and the Model 3 long-range version can drive about 120km in five minutes under peak power conditions, which is 50% less than the second-generation charging time.
Destination charging is aimed at parking lots, shopping malls, etc. and charges at the same rate as home charging.
Tesla currently has more than 12,000 Superchargers and 21,000 destination chargers worldwide.
2 Does Tesla have a sturdy moat?
As a firm believer in the first principle, Musk prefers to return to the nature of things to analyze and solve problems rather than adopt analogies and improvements.
He believes that the latter belongs to linear thinking, which can only produce small upgrades and iterations of technologies or products, while disruptive innovations can only be produced by starting from the essence of things.
This way of thinking has been a huge success for Musk's other startup, SpaceX, and has also been imprinted with first principles in Tesla.
It has enabled Tesla to sometimes create amazing designs and products, and at other times to be too radical and counterproductive, often leading to criticism and controversy.
2.1 R&D and design: the industry's most advanced triboelectric technology
According to Relecura, a US patent analysis firm, Tesla has a total of 408 patents/patent families as of 2018.
From a historical perspective, the number of patent applications and grants started to surge after 2009, mainly related to the preparation for the development of the Model S. The number of applications peaked in 2012 and the number of grants peaked in 2013.
In terms of country of filing, the US has maintained its lead, while Europe and China have seen a rapid increase in recent years, which is inseparable from Tesla's global marketing strategy.
Compared to traditional car companies, Tesla's number of patents in the field of new energy vehicles is not outstanding, for example, Toyota has more than 14,000 patents, about 50 times the number of Tesla patents.
For example, Toyota has more than 14,000 patents related to new energy vehicles, about 50 times the number of Tesla patents. From the top ten keywords in patent applications, "battery", "heat management" and "cooling" are Tesla's main targets.
By mobilizing limited resources to focus on this area, Tesla hopes to differentiate itself from traditional car companies in the field of triboelectric systems.
2.1.1 Battery System
Battery technology is one of Tesla's proudest areas of strength.
The patent data shows that the percentage of patents related to battery systems is over 60%.
Tesla's battery power system includes battery cell, battery management system (BMS), thermal management system, cooling management, etc., of which the battery cell accounts for more than 70% of the cost of the battery power system.
Tesla has used 18650 and 2170 batteries before and after the application of two models.
The latest 2170 cylindrical battery adopts a nickel-cobalt-aluminum NCA equipped with the silicon-carbon anode, with a capacity of 3~4.8Ah and an energy density of 300Wh/kg, which improves the performance by about 20% compared with the previous generation 18650.
The Panasonic cylindrical cell used in Tesla has a mature application history in the consumer electronics market, with the advantages of high energy density, mature technology, and a high degree of production automation.
However, in the automotive industry, where the requirements are more stringent, the high-temperature sensitivity, the difficulty of managing groups, and the ease of explosion limit their widespread use.
To this end, Tesla proposes four main solutions, including better bipolar materials, module construction, battery management systems, and thermal management.
First, continuously find the best materials to reduce costs and improve performance.
The performance of the battery monomer will be directly affected by the different composition and proportion of chemical substances in the battery.
Among the three-element materials, nickel mainly serves to improve the overall energy density of the material, while cobalt mainly serves to stabilize the material layer structure and improve the overall cycle performance.
However, too much nickel leads to chemical instability, and too much cobalt reduces the energy and capacity of the material, and the price of cobalt remains high due to mineral scarcity.
For this reason, Tesla is constantly attacking battery material ratios in an attempt to find the optimal solution.
Across the board, Tesla has started using high energy density NCA ternary batteries in the Model S when competitors made lithium iron phosphate batteries with NCM111 in 2013.
When competitors started transitioning from low nickel materials to NCM622/NCM811 high nickel cathode materials in 2017, Tesla has explored higher energy density silicon-carbon anode applications.
Tesla's accumulation of battery technology has enabled it to stay several positions ahead of its competitors in terms of battery energy density and overall vehicle range.
Longitudinally, Tesla has continued to use NCA as the cathode material for its cells, increasing the nickel content, and decreasing the cobalt content.
Comparing the latest Model 3 and Roadster cars, Tesla has averaged about 60 percent less cobalt per car.
According to Tesla's Q1 2018 report, the energy density of the Model 3's core is greater than that of any other core used in a competing car, and its cobalt content is lower than that of the next-generation NCM811 core product to be mass-produced by a mainstream core manufacturer.
Second, the series-parallel combination and hierarchical management mode optimizes the module structure and improves battery charging and discharging capabilities.
Tesla battery adopts the unique series-parallel connection mode and hierarchical management according to the order of "single battery-brick-sheet-pack”.
For example, Tesla divided the 6831 cells of the Roadster battery system into different sub-cells (2 of the 4 modules are 23 Brick/module, and the other 2 are 25 Brick/module, i.e. 2*23*31+2*25*31) for parallel and serial connection, and the design of multiple series and flat panels greatly increases the number of battery layouts and the number of cells to be connected. Use efficiency, thus improving the vehicle's power performance and mileage.
Third, the high-precision battery management system ensures battery safety and improves cycle life. Battery Management System (BMS) is one of the core technologies of Tesla.
Unlike lead-acid batteries, lithium batteries have a non-linear charging and discharging curve, making it more difficult to monitor, predict and manage, whether at the cell or battery pack level.
If improperly managed, overcharging and discharging of individual cells will cause permanent battery damage, resulting in instability of the entire battery system voltage and temperature, and in serious cases, thermal runaway events.
Therefore, battery management systems play a crucial role in battery capacity, cycle life, and safety.
Since the Model S, Tesla has been using NCA as the cathode material for the battery cells.
Compared to the more mainstream high-Nickel NCM material, NCA has a higher energy density, but a shorter cycle life and less stability, thus placing higher demands on the BMS.
Tesla's BMS mainly consists of a master control module and a slave control module.
The master module is equivalent to the "brain" of the BMS system, responsible for voltage and current control, contactor control, external communication, and other functions.
The slave module is connected to various sensors and is responsible for real-time monitoring of voltage, current, temperature, and other parameters in the battery pack, and reporting to the master module.
Tesla's BMS has two features.
First, high precision.
According to the teardown of the Model 3 by Sandy Munro and Jack Rickard and others, the Model 3's BMS can control the voltage difference between 23-25 individual battery packs to 2-3mV, far below the level of other ordinary electric cars.
Second, a high level of integration.
The Tesla BMS module integrates a high-voltage controller, DC converter, and multiple sensors, thus reducing the number of high-voltage wiring harnesses required for internal communication, ultimately reducing total weight and cost.
The thermal management system has a reasonable temperature difference design, rich and smooth cooling routes, even temperature and energy control ability.
The thermal management system of new energy vehicles mainly includes the vehicle, the cabin, and the battery, which is used for temperature control of the vehicle, air conditioning heating and cooling of the cabin, and overheating and cooling of the battery.
Currently, the mainstream of thermal management includes natural cooling, liquid cooling, and direct cooling solutions.
Tesla adopts a liquid cooling solution with 50% water and 50% glycol as the coolant, and the motor and battery cooling cycles are connected in series and parallel by four-way valves.
When the battery temperature exceeds the set target value, the battery cycle and motorcycle are independent of each other and are connected in parallel.
When the battery temperature is lower than the set target value, the battery cycle and motorcycle are connected in series, using the residual heat of the motor to heat the battery and the cabin, and the excess heat will be discharged by the heat exchanger at the air inlet.
This solution makes full use of the heat of all the components in the car and circulates the heat effectively, which greatly improves the heat dissipation of the battery unit and the temperature uniformity between battery units.
As a result, Tesla's vehicles are able to maintain a temperature differential of less than 2°C, regardless of the extreme weather conditions in winter or summer, demonstrating strong temperature management capabilities.
In addition, due to the upgrade of battery cell materials and the increase in size, the capacity, and density of the cells have increased significantly, resulting in an increase in the chemical heat sensitivity of the battery, with the flammable point dropping from about 175℃ for 18650 cells to about 65-82℃ for 2170 cells, placing higher demands on the battery cooling system.
Comparing the old Model S 85, the new Model S P100 and Model 3, we can see that the battery cooling system has been upgraded in stages, from a single cooling strip in the early stage to independent cooling strips in each layer, which provides better temperature control for the new 2170 batteries and greatly improves the battery cooling efficiency.
2.1.2 Electric Motor Control
Currently, the electric vehicle industry mainly uses three types of motors: AC induction motors, permanent magnet synchronous motors, and switched reluctance motors, while passenger cars mainly use the first two.
The stator is immobile and generates a magnetic field, while the rotor rotates by force in the magnetic field.
The stator and rotor are not synchronized; the stator of a permanent magnet motor generates electromagnetic torque to drive the rotor's magnetic field to rotate around the axis line, and the magnetic fields of the stator and rotor are synchronized.
In terms of raw materials, the main difference between the two is that the rotor of an induction motor is made of aluminum or copper, which is less expensive, while the rotor of a permanent magnet motor is made of permanent magnets, which involve rare earth materials such as NdFeB, which is more expensive.
In terms of performance, induction motors have a wide range of temperature tolerance, no demagnetization risk, and good efficiency in the high-speed range; permanent magnet motors have a wide range of output torque adjustment, high output power, and small size under the same conditions.
In general, permanent magnet motors are more efficient and induction motors have better performance.
I. Induction motors were Tesla's "best" choice when it was founded.
In the 1990s, GM's EV1 series was the first to use induction motors in an electric car with an inverter, a system that converts the DC output of the battery pack into the AC power needed by the motor.
Since then, the T-zero sports car has also used a modified version of the induction motor.
The technology was adopted by Tesla founders Eberhard and Tabernin.
When designing the Roadster, Tesla chose the induction motor as the drive motor due to a combination of cost (global rare earth capital is largely concentrated in East Asia, particularly in China and Japan), the risk of demagnetization, and the maturity of the technology (AC Propulsion, the manufacturing partner at the time, was the technology leader in the field of induction motors).
To improve the power and efficiency of conventional induction motors, Tesla took a number of measures, including designing corresponding laminations, increasing torque, and cooling systems, the most innovative of which was a patented copper-core rotor for induction motors (patent number US2013000069476).
Copper provides higher electrical conductivity than aluminum. In terms of the conductivity of each metal at different temperatures, copper has a much higher conductivity than aluminum at the same temperature.
If the motor rotor structure is made of copper, the efficiency of the motor will be greatly improved.
The high melting point and the difficulty of manufacturing large-size motors are constraints on the development of copper-core motors.
The high melting point of copper (melting point 1083.4℃) makes it more difficult to manufacture, compared to aluminum (melting point 660.3℃), and an experiment conducted by AC Propulsion and MIT shows that once the motor is too large, the finished product made of copper is likely to have too many air bubbles and be difficult to mount.
Silver-plated copper inserts, unlike traditional rotor structures, provide a low-cost, high-performance solution with low soldering requirements.
Traditional induction motors use copper metal, which consists of two steps: inserting the copper bar into the rotor slot and sealing the rings at both ends.
Tesla uses silver-plated copper inserts to fill the gap between the copper bars and the rotor slots, and then strengthens the ends and seals the retaining rings, which reduces the difficulty of casting and increases the efficiency of the motor, completing Tesla's special power modifications.
Algorithms to solve control problems, Model 3 uses Permanent Magnet Switched Reluctance Motor.
Under the multiple constraints of cost, performance, and efficiency, Tesla ventured into the permanent magnet switched reluctance motor (PMSRM).
The conventional switched reluctance motor has the advantages of low cost, simple structure, high reliability, and low heat loss of the rotor by adding an electromagnet to the stator and a steel rotor, which only generates a magnetic attraction that moves the motor rotor.
However, traditional switched reluctance motors have the problem of torque fluctuation at power output, which requires very fine current control strategies and algorithms, and this has delayed their application on a large scale.
The Model 3 is an improvement on the conventional switched reluctance motor.
A small amount of rare earth is added to the stator and control algorithms are designed to smooth out the torque fluctuations, ultimately increasing the motor output power.
The Model 3's permanent magnet switched reluctance motor is small in size, low in cost (very little rare earth is used, and no copper cores are required, reducing casting costs), and high in power.
Compared to the 83% energy conversion efficiency of the Model S/X induction motor, the Model 3's energy conversion efficiency increases to 89%, which means that 89% of the electrical energy can be converted into driving power, thus further reducing power consumption and improving mileage.
2.2 Software and architecture: the car will become a mobile computer
2.2.1 System software
The Tesla Model 3 was not recommended in 2018 by a leading US magazine, Consumer Reports, which noted the problem of long braking distances.
Placed in the hands of a traditional car company, the solution to a similar problem would most likely be a massive recall or replacement of the parts through a 4S shop.
Either one would require a lengthy wait for owners.
However, Tesla's engineers upgraded the system via OTA (Over-the-Air) and solved the problem within a few days.
This is the fundamental difference between Tesla and traditional car companies - Tesla can be upgraded just like a smartphone (OTA).
Traditional OTAs are limited to features like maps in the infotainment system, but they can't remotely control or upgrade functions like Tesla that involve vehicle components like temperature, brakes, charging, etc. The deeper reason behind this is that Tesla's OTAs can be used to control and update the vehicle.
The deeper reason behind this is that the underlying Electrical/Electronic Architecture of the two are completely different.
As the vehicle's electrical and electronic functions become more and more complex, the number of Electronic Control Units (ECUs) on the vehicle also increases.
Currently, an average car ECU as many as 70-80, about 100 million lines of code, its complexity has far exceeded the Linux system kernel and Android.
In the traditional automotive supply chain, OEMs rely heavily on ECUs from tier-one suppliers such as Bosch and Delphi (now Amphenol).
But different ECUs come from different Tier 1 suppliers, with different embedded software and underlying code.
This distributed architecture creates considerable redundancy at the vehicle level, and the OEMs do not have the authority to maintain and update the ECUs.
Under this relationship, the tier 1 supplier's development cycle matches the 2-3 year model development cycle, and software updates for traditional vehicles are almost synchronized with the vehicle lifecycle, greatly impacting the user experience.
Unlike traditional car building, Tesla has adopted a centralized electrical and electronic architecture, where the underlying operating system is developed in-house and the different domain processors and ECUs are unified using a central processor.
This architecture is very similar to that of smartphones and PCs.
The electrical and electronic architecture of the Tesla Model 3 is divided into three parts - the CCM (Central Computing Module), the BCM LH (Left Body Control Module), and the BCM RH (Right Body Control Module).
The CCM consists of the IVI (infotainment system), ADAS/Autopilot (driver assistance system), and interior and exterior communication, with the CCM running an x86 Linux system.
BCM LH and BCM RH are responsible for body and convenience systems, chassis and safety systems, and powertrain functions.
The biggest benefits of this are.
First, software and hardware decoupling and centralization of computing power.
It can truly realize hardware standardization and software development reuse, not only realize supplier substitution but also can greatly shorten the software iteration cycle while clearing the way for future third-party software development.
The vehicle will become a mobile intelligent terminal, at the same time, a large number of computing work can be concentrated on the vehicle central processing unit or even the cloud, reducing the internal redundancy at the same time car networking collaboration is possible.
Second, internal structure simplification, manufacturing automation.
In-vehicle Ethernet is beginning to replace the CAN bus structure, and semiconductor integration enables Tesla to streamline the internal wiring harness structure.
Tesla's future plan for the Model Y is to limit the harness length to 100 meters.
Tesla's plans for the Model Y are to keep the wiring harness to 100 meters. The automated harness assembly of the Model 3 caused Tesla to go into "capacity hell" for a while, and eventually, it had to switch to manual assembly.
The streamlining of the wiring harness structure will enable Tesla's production efficiency to be further improved.
Third, improve the added value of services.
After the realization of the vehicle OTA function, Tesla can continue to improve the vehicle functions through system upgrades, software to a certain extent to achieve the functions of traditional 4S shops can continue to provide vehicle delivery for the operation and service.
The delivery of traditional car products means the start of wear and tear and depreciation, but software OTA gives the car more life and better user experience.
Since the launch of the Model S in 2012, the Tesla software system has undergone a total of nine major updates, with an average of one minor update every few months, and has accumulated more than 50 new and improved features, including automatic driving assistance, battery preheating, automatic parking, and other functions.
If we say that Tesla is still competing with traditional car companies in the same dimension of the three-electric system field, then OTA is a downgrade of Tesla to traditional car companies and even traditional first-tier car suppliers.
Although the traditional car companies have started the intelligent transformation, they may not be able to catch up with Tesla's pace.
According to Bosch's definition of EEA, Volkswagen and other traditional car companies are still in the transition stage from "Modular" to "Integration", while Tesla is already a major player in the market. "Vehicle Computer" (on-board central computer) now.
At the 2018 annual report media conference, Volkswagen CEO Dees explicitly proposed to build the VW.OS operating system and gradually integrate the vehicle's 70+ ECUs into 3-5 high-performance processors.
Volkswagen became the first company among the traditional car companies to explicitly propose intelligent transformation, but compared with Tesla, the software is not Volkswagen's strong point.
For the transformation to be successful, Volkswagen not only needed to develop a large pool of relevant software development talent and build up an endogenous software development capability, but it also needed to adjust its organizational structure accordingly.
Shareholders' support, management's vision, and strong execution were indispensable.
In addition, the existing Tier 1 suppliers are bound to play a fierce game with car companies on the dominance of ECU software and hardware development in the future, and the difficulty of the transformation of car companies is imaginable.
2.2.2 Application Software
Autopilot is Tesla's most important application today.
The biggest difference between traditional cars and smart cars lies in the driving system. At present, mainstream intelligent cars are basically equipped with L2 level driving assistance systems, while no enterprise has yet realized a fully automated driving system.
Automotive assisted driving systems are composed of software and hardware combinations. From the structural framework, they are mainly divided into a perception module, a map module, and a driving behavior decision module.
From the process, the perception module collects data from objects detected by the surrounding environment through hardware such as radar, sensors, cameras, etc. The map module provides positioning and global path planning, and the data is transmitted to the driving behavior module to provide information to support the driving scheme.
From the technical path, it is mainly divided into two schools, one is represented by Tesla, with the camera as the leading solution; the other is represented by Google and Baidu, with LIDAR as the leading solution.
The camera is the closest to the human eye to acquire the environmental habits of the sensor, has more stable image processing capabilities, but in harsh environments such as rain, fog, and other degradation of the resolution.
LIDAR emits laser beams to detect objects, which has the advantages of strong anti-interference ability and accurate detection.
However, the cost and technical threshold of LIDAR with multiple beams of high accuracy is much higher than that of cameras.
Tesla Autopilot's main achievement is to be the first to achieve large-scale commercialization.
First, the commercialization of Autopilot assisted driving has outstanding performance.
The accident rate can determine to some extent the safety of the vehicle and the Autopilot system.
According to the US insurance claims regulations, it can be divided into six categories, namely Collision (vehicle collision, caused by the at-fault party against the at-fault party's vehicle claims), Property Damage (vehicle collision, caused by the at-fault party against the other party's vehicle claims), Comprehensive (other non-collision accidents) three car insurance and Personal Injury (each party pays), Medical Payment (vehicle collision, bodily payment to the at-fault party), and Bodily Injury (vehicle collision, bodily payment to the other party caused by the at-fault party) are three types of personal coverage.
Comparing the rates of similarly sized limousines, the Tesla performs similarly poorly to other limousines in terms of the three-body protection coverages, and the figures are much higher than other limousines in the same category.
This suggests that the average Tesla single-car collision rate is above the industry average, which also implies that it is prone to more collisions due to system miscalculation or driver neglect.
However, in terms of the three personal protection coverages, the Tesla Model S is below average and largely excellent, suggesting that the Model S has good personal protection for both its own and the other vehicle's owners.
In terms of lane-keeping, according to the Insurance Institute for Highway Safety's IIHS, a total of 18 test conditions were set up for six tests of each of the three scenarios, comparing five cars in the same category - BMW 5 Series, Mercedes-Benz E, Model 3/S and Volvo S90 - under different open road test conditions ranging from 1300-2000 feet (396-617 meters) in diameter. Autopilot 8.1 Assist is the most outstanding in terms of vehicle retention on curves and ramps, performing only once on a pressure line.
Second, Autopilot has a data advantage.
As the first electric vehicle brand to be equipped with Autopilot, and with the world's largest assisted driving fleet, Tesla Autopilot has covered more than 1.73 billion kilometers as of January 2019, far more than any other competitor, and its fleet size is conservatively estimated to be growing at around 400,000 vehicles per year (Model S/X 100,000 vehicles per year + Model). (3.3 million vehicles/year).
For comparison, according to the California Department of Motor Vehicles' 2018 Automated Driving Disengagement Report, LIDAR route leader Waymo had a road test fleet size of 110 vehicles and approximately 2 million road miles between December 2017 and November 2018.
The huge volume of data allows Tesla to accumulate significantly more data than its competitors in areas such as high-precision mapping and obstacle recognition.
In addition, unlike most self-driving startups that use simulated data for algorithm learning, Tesla's fleet collects all real data, which is of higher quality and more conducive to iterative algorithm updates.
Third, Tesla's self-developed autopilot chip to meet completely unmanned computing power needs.
According to the information disclosed by Tesla on April 23rd Autopilot Day, after 3 years of secret research and development, Tesla has completed the design and production of the in-car AI chip (by Samsung OEM), and the SOC computing power exceeds that of NVIDIA Drive PX2 applied in AP2.0, and has been installed in the car.
In principle, the ability to process and learn from massive amounts of data is critical, regardless of the automated driving technology path.
Therefore, the implementation of automotive AI requires a full range of changes from the underlying software to hardware.
Previously, the automatic driving chip was basically monopolized by the two giants NVIDIA and Mobileye (which has been acquired by Intel).
The self-developed in-vehicle chip is the most important hardware innovation of Tesla in recent years, which will make Tesla become the only car manufacturer with the capability of developing and designing self-driving chips, and further expand its leading position in the field of intelligent and driverless.
It's worth noting, however, that Tesla and Musk have been guilty of over-promising and exaggerating the Autopilot driving system.
Most consumers have been deceived by words like "auto-steering and self-parking" without a deep understanding of the context, which has resulted in several safety incidents.
In addition, Autopilot is not able to transmit 100% of all real-life objects into the database, due to the high volume of object detection data required by camera-driven vision solutions, which in turn leads to a number of traffic incidents caused by system miscalculations.
2.3 Manufacturing: High degree of vertical integration
Tesla manufactures and assembles many of its core components, including battery packs, BMS systems, charging interfaces and equipment, motors, etc. The most important feature of this model is that the industry chain is highly vertically integrated, so it is not easy to be "stuck" by suppliers in terms of core technologies and components.
The biggest feature of this model is that the industry chain is highly vertically integrated, so it is not easy to be "trapped" by suppliers in terms of core technologies and components.
However, the mastery of a large number of core technologies will inevitably bring a large amount of initial investment in research and development, so it is necessary to build high-quality goods and models, through the scale effect of diluting the R & D, open mode, and other initial investment.
Powertrain integration optimizes the internal structure, facilitating downsizing models to reduce costs and create price competitiveness.
Tesla has maintained a high degree of powertrain integration, including battery pack, BMS, cooling system, and motor.
For example, whether it is an induction motor or a permanent magnet switch reluctance motor, the basic structure is a three-in-one transmission, inverter, and motor.
In contrast, with each new model, Tesla tries to integrate and upgrade as much as possible.
Model 3 is about 20 percent smaller and 50 percent cheaper than the Model S/X. In order to maintain the performance of the car, Tesla has added more system chips to control the coordinated operation of the components and has integrated components such as the Model 3's water cooler, electric valves, and liquid cooling tank into a coolant reservoir, the Super Bottle, which uses an algorithm to regulate the internal flow of coolant. Series-parallel wiring structure, reducing components such as PTC heaters.
2.4 Sales, Brand and Service: Direct and Full Life Cycle Interaction
In terms of sales, it differs from the multi-layered distribution model of traditional car companies.
Following Apple's example, Tesla chose to build its own showrooms and experience stores, expanding its sales network from major US cities such as California, New York, and Washington, D.C., to 378 cities worldwide in 2012.
Although the direct model helps to improve the brand image and solve the problems of inconsistent prices and poor experience due to the distribution process, the operating costs of direct stores are actually not low, and the direct model is not unique to Tesla, there is no real threshold.
Most of the electric car startups, such as NIO Xpeng, have also adopted this model.
Tesla has a very high brand value, which is largely due to CEO Musk's charisma and unique aura.
In the early days, Musk created a real-life Iron Man image, and his personal influence was soaring, and the "netroots effect" allowed Tesla to generate its own traffic and media exposure.
For example, after the launch of the Model 3, Tesla used various social media and self-media to discuss the topic, which resulted in more than 300,000 bookings in the first week, spreading the word far beyond traditional advertising channels.
According to BrandZ, a global brand evaluation platform, Tesla has been ranked among the top 10 global car brands since 2016, and its brand value has risen from $4.4 billion in 2016 to $9.4 billion in 2018, even surpassing older luxury car brands such as Porsche.
In terms of service, as Tesla conducts software updates through OTA, it can greatly enhance the added value of the product, and as many problems can be diagnosed online through remote "online diagnosis", it can save users' repair time, thus reducing costs.
In addition, as a "Twitter V", Musk often interacts with users on the social network and listens to their opinions on product and software updates, and this close communication has won the goodwill of many users, making most of them understand and support some of the product's flaws.
3 Tesla's Next Decade: Challenges and Prospects
First-principles are angels and demons.
Tesla is accustomed to solving problems as it moves quickly, but over time certain problems grow deeper and deeper into future pitfalls.
First, capacity issues.
Tesla's production capacity has been criticized for its mismatch between production capacity and product bookings and severe delivery delays due to a lack of capacity.
Tesla's capacity problems exposed since the end of 2017 have been exacerbated by the highest deviation between Model 3 orders and actual production.
Actual Model 3 production in the third quarter of 2017 was only 260 units, much lower than the 1,500 units expected, mainly because the early battery Gigafactory 1 has not yet been officially mass-produced and manual assembly of battery packs is slow.
After the battery mass production issue was resolved, the Model 3 capacity issue remained unresolved.
The main reason is that the production line is too highly automated. The GA3 production line for production assembly is more than 90% automated, and the production of one car is matched with hundreds of machines and equipment, the production line is too dense, too many machines and equipment leads to conflicts in operating time, efficiency, and flexibility decline, the surge in maintenance costs to offset the cost advantage of automation.
As a result, Tesla had shut down the GA3 production line in February and April 2018 to reduce automation and add more manpower, in addition to opening a tent production line GA4 to increase production speed.
The Model 3 reached its target weekly production capacity of 5,000 units in June 2018 and is currently producing around 7,000 units per week.
Even so, Tesla is still struggling to complete deliveries on time, based on about 455,000 Model 3 orders at the end of 2017 and 147,000 actual deliveries in 2018, and excluding new orders, it will take about a year to complete the remaining orders.
Second, quality and workmanship issues.
On the one hand, the Model 3 body quality reliability is flawed.
In terms of raw materials, aluminum and steel have the highest usage rate.
Comparing the physical properties of the two, in most cases, under the same mass, aluminum alloy strength is greater than high-strength steel; under the same volume, the strength of high-strength steel is greater than aluminum alloy.
Therefore, most of the new energy vehicle enterprises have turned to an aluminum body, is to reduce the weight of the vehicle.
From the chemical performance point of view, because of the low melting point of aluminum alloy, higher sensitivity to temperature, so the traditional welding and other means of warming are not applicable, often using riveting, gluing, and other technologies, increasing manufacturing costs.
In addition, due to the uniqueness of aluminum, it is difficult to repair the car body by traditional means after an accident, and partial or whole piece replacement according to the severity of the accident will increase the repair cost and reduce the user's sense of use.
The Model S/X is an example of a high-ratio aluminum body.
To keep costs down, the Model 3 body is a mix of steel and aluminum.
According to Munro & Associates' teardown report and structural drawings of the body model, the Model 3 is made of four materials: aluminum, mild steel, high-strength steel, and ultra-high-strength steel.
Since the single-motor Model 3 is rear-mounted, the rear body is mostly made of lighter-weight aluminum to balance the weight.
Most of the longitudinal beams, floor plates, etc. are made of ultra-high-strength steel to increase the strength of the body and improve safety.
The Model 3's body is made up of five different types of connections, which doesn't simplify unnecessary parts, but rather increases the cost of the entire car.
On the other hand, Tesla has been criticized for its workmanship since the launch of the Model S. This can be seen in the blurred key fobs, excessive plastic upholstery, and poorly made doors.
As a luxury sedan brand, Tesla's interior and workmanship is not on par with that of similar German and Japanese cars.
This is mainly due to Tesla's lack of experience in mass production, lack of accumulation of car manufacturing process and supply chain management, on the other hand, Tesla's excessive pursuit of automated production, and eventually had to adopt the "tent factory" method of reworking, which affects the quality.
In addition, due to the lack of international experience of traditional car companies, the Model series does not adjust the cabin for different markets, often resulting in the interior seats suitable for European and American body types, but too empty and uncomfortable for Asian consumers.
Even after numerous product upgrades and various safety measures, the frequency of Tesla car accidents is still on the rise, with Tesla's share price falling by up to 20% in 2013 due to frequent car fires.
According to disclosed reports, from 2013 to March 2019 Tesla had 36 car safety incidents, 47.2 percent of which were caused by vehicle collisions, including collisions due to drunk driving, improper operation, and roadblocks.
However, unlike fuel vehicles, 58.8% of vehicle collisions triggered battery combustion and caused varying degrees of injury to the driver due to the high burn time of the power battery.
In addition, accident casualties were deep, with 9 out of 36 accidents resulting in fatalities.
Fourth, cash flow issues.
As a start-up high-end manufacturing company, due to its asset-heavy, R&D-heavy attributes, Tesla's cash flow was essentially negative over a period of 10-20 years.
Despite dominating the mid-to-high-end new energy vehicle market through explosive models such as the Model S and Model 3, however, Tesla's corporate free cash flow was positive for only 2 quarters between Q2 2010 and Q4 2018.
To enter the European and Chinese markets, Tesla's corporate free cash flow has worsened even more since Q2 2017, reaching a negative $1.38 billion in Q4 2018.
As a result, in 2019 Tesla will significantly close stores and showrooms and shift its sales model to online in order to cut costs and expenses.
The popularity of Model 3 in 2019 once led to an improvement in Tesla's cash flow.
Cash flow decreased to negative $170 million in Q3 2019, but future cash flow remains an important consideration as the Model Y ramps up in the US and Chinese factories and the Model 3/Y ramps up in European factories.
V. Frequent senior-level shakeups.
Tesla's senior management turnover rate is on the rise, with over 40 executives leaving the Company in 2018 alone.
In addition to normal staff transfers and executive departures on the administrative side, Tesla's core team of technical, financial, R&D, and legal executives have all experienced departures.
For example, Greg Reichow and Josh Ensign, Vice President of Manufacturing, who left in May 2016, Jason Wheeler, Chief Financial Officer, who left in April 2017, Kurt Kelty, Director of Battery Technology, who left in July 2017, and Gabrielle, Chief People Officer, who left in September 2018 Toledano, etc.
Even though executive departures and job-hopping are common in Silicon Valley startups, frequent management changes are not conducive to Tesla's steady growth.
In retrospect, the ten-year plan and the four tasks set out in Musk's "Master Plan" in 2006 have almost been completed.
In 2016, Musk has proposed a new "Master Plan Part Deux", which includes four tasks.
i. Manufacture of solar rooftops and integration of energy storage batteries.
Expand the Tesla new energy vehicle product line to all major market segments.
iii. aggressively develop driverless technology to enable rapid iteration through large-scale fleets.
Four, the launch of a car-sharing timeshare.
If the keyword that belonged to Tesla from 2006 to 2016 was "electrification", then from 2016 onwards Tesla will focus more on smart grid connection, sharing, clean energy production, and storage.
Tesla is pushing the boundaries of its business as it becomes more vertically integrated, but it also faces issues and controversies regarding capacity, product safety and quality, and cash flow.
Tesla's future competitors are not only traditional OEMs such as Volkswagen and Toyota, but also high-tech companies such as Google, NVIDIA, Uber, oil giants, and Chinese traditional and electric vehicle startups.
The global new energy vehicle market landscape is still uncertain.
For one thing, Tesla will become a global car company.
The Model 3 has become a phenomenal product in the US market, and it is imperative that it replicates its success in China with its own factory and low price policy to quickly capture the market, as well as promoting the Model Y to meet the needs of SUV users.
Later, Tesla will launch the Tesla Semi, an electric truck, and the Cybertruck, an electric pickup truck.
We forecast that global electric vehicle sales will reach 35 million units in 2030, and Tesla's annual sales will reach 3 million units, with overseas market revenue accounting for more than 50% of the total.
In the future, Tesla's lead in the electrification field may be gradually reduced, and its core competencies lie in intelligence, driverless technology, data, and brand.
From the history of smartphone development, the appearance and supply chain is extremely easy to imitate reference, but Apple's profits are more than the sum of all competitors, the core is self-developed A series of chips, iOS system, and to create application ecology and high-end brand.
Tesla will have a more efficient iterative algorithm than other competitors through self-developed self-driving chips and artificial intelligence algorithms, and with the largest number of fleets constantly provide real road data for deep learning.
In the future, once Tesla's camera route is proven feasible, it will reflect a great cost advantage over the LIDAR route.
Third, in the long run, automotive services and energy services will be the new growth areas for Tesla.
Tesla has already established global direct stores and charging network, through OTA constantly pushing new software and functions to users, Tesla is continuing to build online + offline, car + energy service closed loop.
When fully automated driving is ready, Tesla will also build its own fleet of vehicles to provide taxi services.