This article is reproduced from the autocarweekly official account.
Author: Linghuchong.
Two days ago, the China Association of Automobile Manufacturers (CAAM) announced the sales data of new energy vehicles in April, which was 206,000 units, down 8.7% compared to the previous month. Among them, the sales of Tesla, the internet-famous brand, dropped from 35,478 units in March to 25,845 units, a decrease of 27.15%.
Regarding the current focus on Tesla, various interpretations have been made by insiders and outsiders. Some people say that the braking issue is the main cause of the sales decline, some say that the internet-famous CEO Musk’s halo has faded, and the CEO’s lack of focus has caused the overall business to lag behind. Some people attribute it to Tesla’s lack of attention to PR leading to a chain reaction…
After analyzing, these claims boil down to a few possibilities, mainly “order cancellation theory”, “Musk’s image collapse theory”, “brand image collapse theory”, “product strength theory” and “PR boondoggle theory”. According to my market experience as an amateur, the sales fluctuations this time, or even future sales fluctuations, are not closely related to these possibilities.
Tesla Owners “Enjoy” Public Opinion Crisis
First of all, it must be acknowledged that public opinion and reputation have indeed collapsed, but has this spread to sales? At least in terms of speed, it has not yet reached there.
The “roof rights protection incident” occurred on April 19th. By the calculation deadline of April 30th, Tesla is not a fast-moving consumer goods brand, but a big item that requires a longer cycle to make decisions and wait for delivery. During these ten days, those who want to buy will still buy. Even if those potential buyers hesitate, it is at most an order that has no impact on April sales.
So, would consumers cancel orders and cause Tesla’s sales to drop 27%?
It doesn’t seem like it.
Throughout April, the most annoying thing for prospective Tesla car owners was not roof rights protection, but the slow speed of matching. Due to too many orders, all Tesla Model 3 and Model Y were in “explosive order” status. Consumers receive the order first, and then go through a mysterious “matching” process, which used to take about 2-4 weeks, but now it has been six weeks and many prospective car owners have not yet received a successful match, causing them to flood BBS and forums.
In other words, April sales data basically met the needs of consumers who placed orders in February, March or even earlier, and had almost nothing to do with the increase or decrease of new orders in April.
Some even joked that they hoped the storm would come more fiercely, scaring away some of the car owners in front of them, so they could be matched successfully as soon as possible…Every time a successful match of potential buyers shares a post of their success, it attracts more comments to “absorb some good fortune”. A tragic Model Y owner claims to have placed an order on January 20th in Shanghai, and after a long wait, the system is finally showing that their car will be ready for pick up on May 17th. Rumors in Hangzhou suggest that a large number of deliveries for orders placed in early April will arrive in May, while a group from Chengdu claims they haven’t heard anything since their order on April 6th…
The claim that orders are being cancelled is non-existent.
If the public opinion storm can help them get their cars earlier, the waiting Tesla owners are not afraid of a more intense competition and a little less for their competitors.
Capacity and orders are the main conflict
The fact is that Tesla’s sales have indeed dropped by a lot, but compared with the same period in 2020? In April of last year, even the Tesla Model 3, the highest-selling model, only sold 3,635 units at most. Even if the sales drop sharply in April 2021, it will still be much better than last year.
Moreover, they exported 14,174 various vehicles to overseas markets.
According to Cui Dongshu, the secretary-general of the China Federation of Passengers Cars, “April is the first month of the second quarter, and it is usually the period when manufacturers adjust orders and production. From the perspective of market rules, delivery volume will also decrease. Besides, Tesla has to continue to export to Europe, so a decline in China data is not surprising.”
In summary, the decline in sales is not related to public opinion.
Apart from seasonal factors, Tesla shut down the Model Y production line for two weeks in April to upgrade the production line, and the output was definitely not as good as in the past. Based on previous analyses, the sales data of Tesla in April basically rely on delivering previous orders, and it is certain that they will be affected.
There is also a very special factor, which is the chip problem.
Ford says that a global shortage of semiconductor chips will reduce its second-quarter production by 50%, while three Honda factories in Japan have also stopped production because of chip shortages, one of which could last six days at most. Daimler adjusted production capacity by reducing the working hours of German factory employees…
The semiconductor crisis is spreading in the supply chain system.# Elon Musk admits “Tesla is facing the most difficult supply chain challenge,” insiders reveal that Tesla will use limited chips in the production of orders for Model 3 and Model Y. Even so, the current delivery cycle of Tesla Model 3 in China has been extended from 2-4 weeks to over 3-6 weeks, and the expected delivery time for booking a Model Y in the US market has even reached 7-11 weeks.
The main contradiction facing Tesla is how to meet the ever-increasing orders with limited chips. As for public opinion, they cannot bother to maintain it.
Musk even spoke on April 17 about the Texas accident, “most of the reports are wrong, and the reporters should feel ashamed.”
It’s sure to beg for the truth.
But according to consumers’ attitude towards technology companies, even if it is proven to be true, as long as it corrects it, it can still gain trust. Apple is still the most typical example.
Musk’s Internet Celebrity Business Strategy
In fact, Musk has always been very clear that Tesla is not just a technology product, but also an Internet celebrity product. Tesla is a brand with inherent traffic, and he, the universe’s number one internet celebrity, is the natural entrance to Tesla’s traffic.
Traffic is orders, and in this turbulent era, orders are the hardest currency.
Internet celebrity economy is the first productivity to promote the development of various industries. Even the funds that require professional technology, meticulous thinking, and accumulation can benefit from the internet celebrity economy.
Young people save money from their milk tea expenses, buy a 99 yuan course that teaches how to achieve financial freedom, and join the army of speculation. In the meantime, they also drive the “debut” of star fund managers such as Zhang Kun from E Fund Management Co., Ltd., Liu Yanchun from China Securities Co., Ltd., Ge Lan from China Europe Fund Management Co., Ltd., Zhou Yingbo from China Europe Times Pioneer Stock Fund, and Xiao Nan from E Fund Consumer Industry Stock Fund. They are idols, they are male gods! Your male god asks you to buy milk, but our male god can help us make money!
It’s obvious.
However, once they lose money at the beginning, the new generation of retail investors, no, the new generation of “leeks,” will unfollow them at light speed and push the once male gods back to hot search with curses.
This time, it’s by cursing.
# Markdown Text in English
The internet-famous product, as long as the image and product are not exposed as frauds, and reputation remains strong, can basically exist comfortably.
Musk, the supreme internet celebrity in the automobile industry, is the face of Tesla, the Silicon Valley iron man prototype, and the future Martian founder. He dreams of crossing the galaxy while studying the survival of the human race. After Tesla’s production capacity returned to normal, the genius has been working on two things: cryptocurrency trading and developing a fully recyclable stainless-steel shell for his rockets.
His global fans, whether they own a Tesla or not, are all eagerly watching his rockets explode. Has Musk backed down or become sad? No, he may not even shed a tear. He cleaned up the wreckage of his rockets and continued to pursue his vows to explore the galaxy.
Although he has suffered numerous defeats, his fans regard it as an emblem of never-give-up spirit. He is like the invincible cockroach that keeps rising after persistent failures, the epitome of perseverance in the face of adversity. As long as there is a breath left, Tesla’s biggest patron will never fall.
Every explosion brings more publicity and turns into orders for Tesla’s Model 3 and Model Y. Tesla is not just building cars to sell, but funding the mission to solve humanity’s future problems.
Not buying a Tesla? That means you are not from this planet!
This may be Tesla’s image in geeks’ mind. It may not be perfect, but it has never given up. Bugs, if any, can be fixed; we are all programmers and have encountered a few tricky bugs, haven’t we?
Thus, Musk’s image still stands tall, and Tesla’s brand image remains intact. The current sales have not been affected, and even if future sales fluctuate drastically, the genius’ reputation and Tesla’s high-end image will not suffer.
Unproven Problems with the Product
Has Tesla’s product reputation collapsed? It seems not.
A good reputation boosts sales, and NIO’s excellent community operation is a prime example. However, don’t forget that community management is just icing on the cake. Providing outstanding products is the foundation of a good reputation.
Investors who follow technology stocks regard Tesla and Apple as the two most powerful companies in the mobile internet era.The former has revolutionized transportation, while the latter’s brand is more popular and recognizable.
Steve Jobs, known as one of the greatest product managers in the world, always believed that consumers don’t know what they need until we present them with our own products, then they realize that’s what they want.
The success of a product is all about the brand’s influence, and consumers can only answer multiple-choice questions instead of simple ones.
The biggest problem of the first generation Apple phone was that it was too fragile, but that didn’t overwhelm its identity as the coolest phone at the time. Even after iPhone 8, Apple still went “mad” and used glass back covers, making the phone even more fragile, but consumers didn’t care. They still buy iPhone 12 Pro Max without hesitation, even more happily letting their phones go naked.
AirPods have a strange shape and are easily lost. So what? Buy another pair when you lose them.
Starting with iPhone 4, which pioneered the new era of mobile phone design, every generation of iPhone was the most disappointing one in the eyes of Apple fans. Weird bangs on the screen, chips whose running scores were defeated by Android phones, and strange three-eyed cameras; after the release of each new iPhone series, positive reviews were almost nonexistent.
But what then? Every generation of iPhone still sold very well. In the Q1 2021 financial report, Apple’s single-quarter revenue exceeded 100 billion US dollars, a year-on-year growth of 21%, reaching 111.4 billion US dollars, making it one of the most profitable companies.
And this was still the case when the reputation was being “hammered”.
What about Tesla, also a technology company? As far as the current situation is concerned, its brake problem has been researched extensively since the data was released, but it has not been hammered down.
The Tesla female car owner who sued the company was not the driver on the day of the accident, and her “Tesla brake failure claim” did not hold up well under scrutiny, but of course, further verification and authentication are needed. At most, it only puts a “weak brake” hat on the Tesla Model 3.# Translation
She trying to escape paying after her father’s Tesla rear-ended another vehicle and was held fully responsible for the accident. The easiest way to do this would be to muddy up the waters and blame the car without any proof, as Tesla’s evidence was not accepted. The public loves to see these kinds of incidents, and platforms like Douyin and Kwai are quick to jump on the bandwagon. Any jokes or comments related to Tesla lead to traffic and force other Tesla owners to sue this female activist.
As Tesla car owners, we also care about our reputation. Cadillac owners, for example, are frequently ridiculed for going to bathhouses, but they’re not labeled as traitors.
We can’t stand it; we just bought a car, why did we provoke anyone?
Musk needs no explanation, Tesla needs no PR
During the phone conference call earnings meeting, Musk made no comment on the Chinese public opinions. Tesla’s Vice President Tao Lin, who replied with “No compromise” and “No reason to satisfy,” stated in an interview on May 10 that “We need to cooperate with driving schools and transportation departments to continuously use technology methods on the car to help people understand how to use new cars and avoid erroneous operations or other related problems caused by not fully understanding the functions of the vehicle.”
This statement may not be as comfortable to hear but I still agree with some of her views. The driving experience of the Tesla in the single pedal model is completely different from that of a gasoline-powered car. After some car owners have “innovated” the use of the left foot for brakes and the right foot for gas, it is easy to cause accidents due to misoperations. The intelligence of the Tesla makes it easier to cultivate such irregular operation modes, which can easily cause people to relax their vigilance. When nothing is happening, it’s fine, but when there’s an emergency, people tend to step on the accelerator instead of the brake.
However, we still need to pay attention to the progress of the brake issue, as consumers need an answer.
As for those who repeatedly analyze Tesla’s need for a professional PR team and question Ms. Tao’s business level, they are often showing off their skills to compete for PR partnerships.
For professional PR, Tesla is like an untapped virgin land. If they can get their hands on it, they can earn a lot of commissions.
Tesla owners should watch fewer short videos
Some people say that the Tesla market in China has encountered both ice and fire, which is not accurate. The conflicting parties are the coldness of consumers who have not bought Teslas and the enthusiasm of prospective owners who have already made decisions or are preparing to do so. On both sides, there are constant cries.
Therefore, whether the popcorn viewers are malicious or not, Tesla car owners and potential owners have tragically entered the stage of psychological stress. We just bought a car; why do we need to indulge in high-level arguments?Buying a Tesla is not stressful, but after buying a Tesla, being labeled as a “traitor” or a “disloyal child” can add some psychological pressure. While driving the car is still feasible, Tesla owners can no longer easily show off their cars on Douyin (TikTok) and Kuaishou.
This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email bd@42how.com.