Musk praised Tesla's China team for its outstanding achievements

Today, Musk is riding high, with Tesla's stock price and market value hitting new highs. Tesla's achievements in China in particular have made the founder praise the Chinese team.

Musk tweeted in response to Tesla's sales in China in June. He said: Tesla's Chinese team is amazing! It is reported that data from the China Passenger Car Association shows that Tesla sold 11,095 Model 3 electric vehicles produced in the Shanghai factory in China in May this year. In June, Tesla Model 3 sales in China rose to 14,954 units, accounting for 23% of China's pure electric market.

How could Musk not be ecstatic about such an achievement? Praise is just one of the reasons. According to foreign media reports, as Tesla's stock price has soared by more than 40% in the past seven trading days, reaching a market value of $259 billion and continuing to rise, Musk is expected to receive a second batch of equity rewards worth $1.8 billion.

According to his 2018 compensation plan, if Tesla's average market value reaches $150 billion over six months, Musk will receive the second of 12 stock awards. Currently, Tesla's average market value over six months has reached a record high of $138 billion, which is only one step away from the goal.

Tesla is so popular in the capital market, to a certain extent, because the sales of Model 3 in the Chinese market are so good. It accounts for almost half of Tesla's sales in the global market. How can Musk not praise Tesla's Chinese team with such market performance?

Tesla's impressive performance in the Chinese market is due to many factors. One is the huge purchasing power of the Chinese market. Although the auto industry suffered a great blow during the epidemic, when the epidemic eased, the pace of recovery began to ignite from new energy vehicles, especially the continued support of various subsidy policies, and Tesla's "clever" compliance with the requirements of the subsidy policy, which soon further increased its sales.

The second is that the development of new energy vehicles is the trend of the future. For the Chinese market, the development of new energy vehicles is already the trend of the future. Both the government and car companies have begun to work in this direction, and Tesla still has its own advantages in this field. After the factory was built and put into production in Shanghai, China, the improvement of manufacturing capabilities and the resulting expansion of production capacity will undoubtedly be of great help in meeting the needs of the Chinese market.

Third, expectations for the future have been improved, which has directly led to the capital market's pursuit. Some investment analysts have raised Tesla's target share price from $1,000 to $1,250. Analysts also said, "At a time when the global macro economy is relatively sluggish, the strong demand for Model 3 in the Chinese market is a ray of hope for Tesla."

Tesla said in its first quarter financial report that due to the progress exceeding expectations, Model 3 will achieve a weekly production capacity of 4,000 units in mid-2020, and is expected to achieve an annual production rate of 200,000 units. Moreover, with the production of the domestically produced Model 3 long-range rear-wheel drive version and the domestically produced high-performance all-wheel drive version at the Shanghai Super Factory, Model 3 has achieved localization of all models on sale. The market believes that because Tesla can radiate most of the mid-to-high-end market segments and is at the bottom of the price of luxury fuel vehicle benchmark models, it can quickly seize the market.

At the same time, Tesla has built a dense charging network across the east and west and across the north and south in China, becoming the first new energy vehicle company in China to build charging piles, with the largest number of self-owned charging piles and the widest coverage. It has built more than 2,500 super charging piles and more than 2,400 destination charging piles in mainland China. In 2020, Tesla plans to deploy more than 4,000 super charging piles in China.

Due to the continuous increase in production capacity, Tesla has increased its battery purchase orders to battery supplier LG Chem, and has also asked other suppliers to increase supply. Currently, Tesla's battery suppliers include CATL, Panasonic, and LG Chem.

In early July, Tesla announced that it delivered 90,650 new cars in the second quarter, far exceeding the expected 72,000. In an email submitted to the U.S. Securities and Exchange Commission, Tesla disclosed that the production capacity of the Fremont factory has been successfully restored to the level before the suspension of production. Together with the Tesla (Shanghai) factory, Tesla's electric vehicle production is expected to exceed 150,000 vehicles in the third quarter of this year.

Musk is now full of confidence because of his continued optimism about the Chinese market. At the opening ceremony of the 2020 World Artificial Intelligence Conference, Musk said that Tesla's autonomous driving is doing very well in China and Tesla is building a related engineering team in China. He also said, "We will do a lot of original design and engineering work, so you can consider working at Tesla China." Regarding autonomous driving technology, Musk said he is very confident about achieving L5 level autonomous driving in the future.

It is worth noting that Tesla is now building factories around the world, which is an important part of its plan to significantly increase productivity and change the way energy is used. It is reported that Tesla plans to build four more super factories around the world. The superposition of production capacity and technology has, to a certain extent, catalyzed the increase in Tesla's market share. When other new energy vehicle companies' products are difficult to compete with its benchmark, Tesla's good days are undoubtedly still to come.